The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian airline is “imploring” the Government and its US counterparts to resolve their overflight fee dispute without impacting its ability to fly to America and “unreasonably disadvantage” its business model.

Western Air, via its US attorneys, said it “vigorously” opposes calls by industry groups for itself and other Bahamian carriers to be totally barred from the US, or have their access curtailed, describing such sanctions as “inappropriate” even if the battle over this nation’s overflight fees regime is not resolved.

The privately-owned airline, which has invested heavily in providing airlift between The Bahamas and US, said: “Western Air simply and respectfully implores all parties, entities and stakeholders to come together in an effort to arrive at a resolution that properly accounts for each party’s obligations under the ATA but that does not infringe upon the rights of all air carriers involved to travel freely between The Bahamas and the United States as provided for in the ATA.”

The ATA is the Air Transport Agreement between The Bahamas and US that was negotiated, and signed, by government officials from both countries. The Airlines4America group, which represents the likes of American Airlines, Jet Blue and Delta, is pushing the US Department of Transportation to impose sanctions on Bahamian airlines’ ability to access the US in retaliation if there is no change to an overflight fee structure they deem “unjust, discriminatory and anti-competitive”.

“Western Air vigorously denies that the remedies sought by the members with respect to Western Air are appropriate,” the Bahamian carrier blasted of the US airlines. “The members do not make any allegations showing that Western Air is responsible for any such violations or that curtailing, suspending or otherwise imposing conditions on Western Air’s ability to provide international transportation to the US would be justified.

“It bears noting that Western Air relies upon, and takes great effort to comply, with the provisions set forth in the ATA in carrying out its daily operations. Further, providing international air transportation to the US based on this good faith reliance on the ATA and international law constitutes a significant portion of Western Air’s international flight business.

“To that end, Western Air has expended significant resources in establishing this element of its business model. Accordingly, any outcome that includes the suspension of Western Air’s ability to provide international air transportation to the US would significantly and unreasonably disadvantage Western Air’s international flight operations.” The Bahamian airline called for the complaint to be dismissed, and no sanctions be imposed on its operations.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business that the overflight fee dispute was unlikely to impact the country’s stopover tourism business which is dependent on airlift provided from the US by American and Bahamian carriers.

“I don’t see that as a matter that impacts us,” he said. “We are satisfied that the Ministry of Tourism and the Government are dealing with this issue head on. It’s a right they have to charge it, and it is urgently being addressed at the highest government levels, bilateral levels and legal level.

“This is a matter that is being addressed exclusively by the Government of The Bahamas, who will ensure a positive outcome and the interests of Bahamian airlines endure. We have been assured that they are addressing this head on. We don’t see this as part of any headwinds we are being faced with.

“I am sure the Government is working in the best interests of the industry and airlines involved. This [the overflight fee structure] is really something that has been in place for a relatively short period of time and maybe there’s some minor issues that have to be worked out, but I am satisfied the Government is dealing with this head on.”

Anthony Hamilton, Southern Air’s director of administration, and president of the Bahamas Association of Air Transport Operators, told Tribune Business he did “not see it escalating to” the point where sanctions will be imposed on local airlines seeking to access the US market. He added, though, that the situation again highlighted the need for a comprehensive plan for the Bahamian aviation industry so that its economic potential can be maximised.

“I’m not surprised,” he said of the US airlines’ stance. “It’s hard negotiations. Speaking strictly business, that’s not a good thing for the commercial operators. This also speaks to the bigger picture of what happens with Bahamian aviation at large. There’s a review of Bahamian aviation that’s necessary. Period. That goes to the core of it because this doesn’t happen in a vacuum.”

Noting that aviation industry margins are thin, Mr Hamilton added: “What’s happening here is a concern with respect to fees because margins are slipping. We know the margins are slim and that people are going to fight to maintain whatever they have because that could translate into being out of business. If they’re not happy and bringing the pressure to bear, the Bahamian operators could feel the pinch.

“We know that any fee increase right now spells some trouble. We know the US carriers are impacted on their bottom lines. It behooves us to sit down and truly maximise the negotiation process so that when the dust settles we are better off than where we started. It has to be addressed. It cannot be ignored. That’s why it’s absolutely necessary to address the aviation industry.”