The Tribune

By NEIL HARTNELL

and YOURI KEMP

Tribune Business Reporters

nhartnell@tribunemedia.net

A prominent Freeport hotelier is warning the Government that it must tackle Grand Bahama International Airport's (GBIA) high costs if its prospective purchase is to "grow the destination".

Magnus Alnebeck, Pelican Bay's general manager, hailed announcements by multiple ministers that an acquisition is close as "fantastic news" even though others in Freeport's private sector have adopted the "believe it when we see it" attitude given how long negotiations have dragged on.

The resort executive said it was vital that such a key infrastructure asset, which acts as the tourism and commercial gateway to Grand Bahama, be owned by a proprietor that wanted to expand the island's economy rather than an entity seeking to extract as much profit as possible from a diminishing customer base.

Arguing that the present ownership duo, Hutchison Whampoa and the Grand Bahama Port Authority's (GBPA) Port Group Ltd, fell into the latter category, Mr Alnebeck said the airport "has to be better" than its post-Hurricane Dorian appearance of "a tin and some rusty chairs".

Suggesting that Grand Bahama International Airport does not have to be redeveloped into "the world's most fantastic airport", and that something slightly less will do, the Pelican Bay chief added that airline connectivity at competitive costs and fuel prices was more important for the island's revival as a tourism economy.

He said the present airlift situation, with the island being served by minimal carriers and flights, was unsustainable especially since ticket prices were more expensive between Miami and Freeport than those for the Nassau route.

Mr Alnebeck, adding that resolving the airport situation was also vital to unlocking fresh tourism and other investment in Grand Bahama, and potentially supporting ITM/Royal Caribbean's Grand Lucaya purchase, told this newspaper: "If it [the Government's purchase] happens it is fantastic news.

"From day one, and I have been in The Bahamas for 15 years, I have been saying the airport needs to be owned by an entity that wants to grow the destination instead of making money out of fewer and fewer passengers."

He added that this strategy with Grand Bahama International Airport "has always been the problem, and that's the problem with the hotel deal", and compared the situation thus: "Very few people would buy into a swimming pool if you cannot control that filters the water into the pool."

"There has been the challenge with the operating costs at the airport that are generally passed on to airlines and passengers, and make it too expensive that no one wants to fly there," Mr Alnebeck added.

"If this purchase happens it will be fantastic news, and then I hope they [government] find a solution as to who operates the airport as opposed to messing with the airport themselves. It's a wonderful idea that the people of The Bahamas own the airport as opposed to a private company that wants to make money out of it."

Mr Alnebeck spoke out after Dionisio D'Aguilar, minister of tourism and aviation, and Carl Bethel QC, the attorney general, last week both said the airport's purchase via the Airport Authority was close and that the major negotiating points and legal issues had been resolved.

Many observers believe that Hutchison and the GBPA, which own the airport 50/50 via the Freeport Harbour Company with the Hong Kong conglomerate holding management control, walked away from their obligations to rebuild the Dorian-ravaged facility in the storm's aftermath.

The initial terms were for the Government to acquire the airport for $1 and take over the responsibility for rebuilding, with Hutchison and the GBPA retaining the Dorian insurance claim proceeds.

Reconstruction costs have been estimated at $60m to reconfigure the airport and harden it against future storms. With the Public Treasury increasingly cash-strapped due to COVID-19, the Government is looking to a private-public partnership (PPP) to raise the necessary financing and construction/management expertise similar to the Nassau Airport Development Company (NAD) model.

"A lot of people think it has to be the most fantastic airport in the world. It doesn't," Mr Alnebeck added. "Very few people decide to go to a destination based on what the airport looks like. The important thing is it works, has lots of connectivity and has cheap air fares.

"It has to be better than a tin and some rusty chairs, which is what we have at the moment. The airport needs to accommodate airlines and accommodate planes and work; it doesn't need to have the most fantastic art work in the world. It's more important we get people coming.

"I hope we can quickly get a functioning airport where the airlines have someone to talk to and fuel costs that match Nassau's. One of the issues has always been that fuel is more expensive in Freeport than Nassau. Very few people will choose to go to a destination with an airport that is owned by a company that seems very difficult to work with."

With increased airlift by international and local airlines vital once the pandemic has eased, Mr Alnebeck said: "Trying to survive with American Airlines and Silver Airways, and American Airlines having more expensive tickets between Miami to Freeport than Miami to Nassau, doesn't work."

Some Grand Bahama businesses, though, say they will "believe it when they see it" after multiple Cabinet ministers last week said the Government was close to purchasing Grand Bahama International Airport (GBIA).

Brent Collins, chief executive of Freeport-based Power Equipment Ltd, said: “I saw something where the promised reopening of the Grand Lucayan has been put back again and may not happen at the end of the month how they had planned, so until I see it happen I’m not listening or believing anything that I read or see.

"So many people depend on that airport, from the taxi guys, the people who are ready to serve food, to the people who sell t-shirts. All of the people who make Bahamian food and cause people to want to come to Grand Bahama, they are being affected by not having that airport fully operational. That’s a lot going on. It’s too much to talk about.”

Barry Smith, general manager of Paradise Cove Beach resort, told Tribune Business: “I think it would be a good idea for someone to open that airport up because right now the tourism industry is suffering due to the fact that we have no flights coming in.

“I don’t think they should buy it, but if they have to they need to own it so it can become more prominent and not just give it up to a private owner so we can be assured that if something happened, it wouldn’t take years and years to have it fixed.”

Vesna Laing, general manager of Zorba’s Greek Restaurant, said: “The airport is the gateway for business. Freeport is dead right now.”