The Tribune

• Airline to ask for ‘another small’ fare rise

• Won’t put cost ‘outside Bahamian means’

• July bookings already at 50-60% loads

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamasair’s top executive yesterday voiced optimism that a fuel bill which has skyrocketed by up to $200,000 per week “won’t suffocate” travel demand despite the airline readying “another small” fare increase.

Tracy Cooper, the national flag carrier’s managing director, told Tribune Business that Board permission will soon be sought for the latest ticket price rice as the airline seeks to “cope” with soaring fuel costs without pushing air travel “outside the means” of Bahamians.

While the airline has added “some fuel surcharges” on to its fares, mainly on international routes as opposed to domestic ones, he added that prices were “still comparable” with what passengers had paid in prior years as Bahamasair (and likely Bahamian taxpayers) attempted to “absorb” some of the expense hike itself.

Conceding that fuel costs will be “the biggest issue” for the national flag carrier as it heads into summer, a peak travel period that is key to its financial fortunes, Mr Cooper asserted that the adjustment in fares to-date has only been about $10 and said: “Bahamians shouldn’t be afraid to travel on Bahamasair.”

This latest obstacle comes after Chester Cooper, deputy prime minister who has responsibility for Bahamasair, last week said taxpayers had provided some $150m in subsidies over the previous five years to keep the airline operational during the COVID-19 pandemic’s peak.

However, Tracy Cooper yesterday said the national flag carrier is “looking much better” with passenger occupancy (load factors) on its US routes striking 83 percent in April 2022. Describing that month and May “as two of the strongest” since the pandemic struck in March 2020, he added that there were strong signals Bahamians are travelling en masse once again as flights for July are already 50-60 percent booked several weeks out.

Describing the elimination of COVID entry testing and the Health Travel Visa with effect from Sunday as “a blessing”, the Bahamasair chief added that the airline was “in the 70 percent range” in terms of its recovery to pre-COVID business levels with “one or two planes” yet to return to operation.

Pointing out that aviation worldwide, and not just Bahamasair, is grappling with surging fuel costs, Tracy Cooper told this newspaper: “Fuel at the pump right now is over $7, and when you recognise that in 2021 we were all-in at $4 and change, fuel has almost doubled in price. That’s straight across the board, not just for the general public, but aviation as well. Unfortunately, there’s been some significant increase.”

With Bahamasair consuming an average 95,000 gallons of aviation fuel per week, he added of the bill: “It’s easily gone up now to around $150,000 to $200,000 extra per week. What we’ve done is added some fuel surcharges on [to ticket prices] and tried to absorb some of it, understanding just how much of an impact it has.

“It you look at the pricing of tickets, particularly domestic ones, we’ve not done much of an adjustment. If you look at international, we’ve done more of an adjustment, but it’s still comparable to what we paid in prior years. Bahamians shouldn’t be afraid to travel on Bahamasair. It [prices] will be a bit higher but not outside their means.

“So far we’ve had about a $10 adjustment in fares. We’ve sold it across the amount of seats we have. We’ve recognised, unfortunately, that prices have just gone up again so we will be talking to the Board for another small adjustment to cope with the rise the price of fuel.”

Tracy Cooper, though, said advance bookings for July gave him confidence that rising fuel and ticket prices will not stifle air travel at present. “We’re seeing good, healthy load factors again for the coming months,” he told Tribune Business. “We don’t believe it will have a suffocating negative effect for right now.

“We’re hoping the price of fuel stabilises at some point so it does not become so cost prohibitive for the public. There’s no doubt it definitely will be the biggest issue going into the summer. That’s where we’re at.” However, the Bahamasair chief expressed hope that the removal of the COVID entry testing mandate and Health Travel Visa, the latter of which had already been eliminated for returning Bahamians and residents, will at least partially offset the fuel price effect.

The move will eliminate both red tape and costs facing travellers, and Tracy Cooper added: “We recognise with some of the costly restrictions because of the pandemic, the testing regime being peeled back and the whole hassle associated with it, Bahamians are really responding positively to the change.

“For The Bahamas, especially being a tourist destination, it’s an immense load lifted off the back. We’re in a competitive environment, and when you don’t have the Dominican Republic and Mexico doing it, the traveller has a choice. In removing those impediments, you’re providing a much more level playing field. That’s a blessing. I wouldn’t even say it’s a disguise. It’s just a blessing. It makes travel so much more affordable.”

Tracy Cooper said Bahamasair had enjoyed “some very good traction as far as the Bahamian people beginning to travel” during the March-May 2022 period, “and with the restrictions being removed we think that traction will have an even better footing with the regattas and festivals returning. We’re starting to see Bahamians go back to the island.

“Definitely in March and April, particularly April and May, they were two of the strongest months we’ve had since the onset of the pandemic. It was very encouraging what we saw in April and May, not just in the domestic market but internationally. The flights were relatively full. In April, I believe we had an 83 percent load factor on US routes, so things are looking much better.”

Asked how Bahamasair is performing compared to pre-COVID figures, the managing director responded: “We’re still not there at pre-pandemic levels. I would say we’re probably somewhere around the 70 percent range. We’re operating one or two planes less at this time. Even if we were at full loads we would not match what we did in 2019.

“But we’re starting to see the rebound where Bahamians and tourists are flying. We looked at our loads for the month of July, when Bahamians like to book two weeks out, and we’re already seeing 50-60 percent loads in a lot of weeks in July. We know things will be good for July, and we anticipate the same for August.”

Bahamasair’s typical peak months are the summer and Christmas seasons, together with Easter, as the airline traditionally relies on these periods to minimise losses and the burden on taxpayers stemming from the annual subsidy. The national flag carrier consumed $78.213m in support during COVID’s height in 2020-2021, and had used up $21m of its $30m full-year 2021-2022 allocation during the nine months to end-March 2022.

The airline will receive $32m from Bahamian taxpayers in the upcoming 2022-2023 fiscal year, with this sum forecast to be cut to $21m and $19m in 2023-2024 and 2024-2025, respectively. “The thing is we still have some remnants of what was owed and the rest of that from 2021, and we are working our way through that,” Tracy Cooper said.

“We anticipate going forward we’ll definitely have a reduction in subvention because of the return of the market. Going forward in subsequent Budget years we know that there will not be as much needed from the Government. We’re doing pretty good in comparison to what happened in the pandemic years.”