The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior tourism executive yesterday warned The Bahamas is “eliminating our competitive advantage” every time it raises fees on a private aviation industry that brings in one out of every six stopover visitors.

Kerry Fountain, the Bahama Out Island Promotion Board’s executive director, told Tribune Business that private pilots will “fly beyond us if they feel slighted” as he lamented the failure to consult, and provide advance warning, to the sector on the increased Customs fees that took effect on Monday.

Asserting that better collaboration would “make for a good partnership” with an industry responsible for bringing more stopover visitors to The Bahamas than Canada, Europe and Latin America combined, he added that the manner in which the increases have been implemented is no reward for private aviation’s loyal support for this nation.

Mr Fountain, noting that the Aircraft Owners and Pilots Association’s president had earlier this year encouraged all his members to continue flying to The Bahamas when the media frenzy over the US crime alert was at its height, told this newspaper that it “blew my mind” that this nation continues to repeat past mistakes.

Referring to a July 2, 2013, report headlined ‘Pilots caught off-guard by new Customs fee’, he added that history now seems to be repeating itself given that the new aircraft inbound and outbound fee structure was prompting similar complaints that the private aviation industry has been “blindsided” and caught unawares by the changes.

And, given that Florida provided 95,000 private aviation visitors to The Bahamas in 2023 to cement its status as the leading US source market, Mr Fountain warned that every time fees increase it threatens to undermine this nation’s main competitive advantage of proximity.

To soften the blow, he urged the Bahamas to adopt the same approach to private aviation as it has done with the boating/yachting industry. Mr Fountain suggested that pilots and companies who fly regularly to The Bahamas be able to purchase annual and semi-annual permits at discounted rates, similar to annual and semi-annual boat cruising permits, to soften the financial impact.

The fee increases, unveiled as part of the Customs Management (Amendment) Regulations 2024, represent a three-fold and six-fold increase, respectively, on the previous Customs fee structure for private aviation which was $50 “inbound” and zero “outbound”.

Now, with the changes, commercial jets will have to pay a $50 “inbound” and $50 “outbound” fee for a total of $100. However, a private plane with four seats or less “including all seats in the cabin” is now faced with paying $75 each way for a total of $150.

That is slightly more than the $100 fee for a commercial jet, but private aircraft with more than four seats “including all seats in the cabin” now face having to pay $150 “inbound” and “outbound” fees to Customs for a total $300. So-called “recreational” flights will only pay $150 “inbound”, but it is unclear what this definition means and how it will be applied in the absence of any guidance notes.

Providing an insight into what is at stake, Mr Fountain told Tribune Business: “I don’t think a lot of us understand the importance of private and general aviation. If you were to look at the number of people that are coming into our country by private plane as air arrival stopover visitors it’s actually more than we are getting from Latin America, Europe and Canada combined. That’s how big it is.

“In 2023, we had just over 323,000 air stopovers that arrived by private plane......If we were to break the numbers down by the top five states, there’s approximately 95,000 arriving just from the state of Florida by private plane. The others are Texas, Georgia, New York and North Carolina.”

Mr Fountain said Florida’s proximity means it is this nation’s major private aviation source market because The Bahamas is easier and relatively cheaper to access. However, he echoed the concerns of Rick Gardner, a Bahamas Flying Ambassador, in warning that this proximity advantage is eroded every time this nation raises the cost of accessing the destination.

“What we are doing as we continue to increase these fees is really doing away with our major competitive advantage, which is proximity,” the Out Island Promotion Board chief told this newspaper. “We’re doing that by increasing fees without consulting our partners. 

“It’s not that they cannot afford to pay the difference. It’s just that they need to be consulted, and because they feel slighted they will fly beyond us. Every time we increase fees, whether it is Customs or aviation fees, what we are doing is eliminating our competitive advantage.”

Mr Gardner expressed similar sentiments to Tribune Business earlier this week, describing the private aviation market as “fickle”. He warned that, if pilots and their guests feel The Bahamas is trying to take advantage of or exploit them with fee increases because of their perceived wealth, they have the ability to fly to other Caribbean destinations based on “the principle not the monetary value”.

“It has to do with partnership, consultation and collaboration,” Mr Fountain said yesterday. “Yes, Bahamas Customs do have every right to do what they feel they must do, but consultation before implementation makes for a good partnership. Any time you are talking about aviation, consultation should involve the Ministry of Tourism, the Flying Ambassadors and AOPA.”

Pointing out that AOPA should always be consulted, given that it represents 400,000 private pilots and aircraft owners from 75 countries, the Promotion Board head said the group came to The Bahamas aid earlier this year by telling its members to continue flying to and visit this nation amid the furore sparked by the US and Canadian crime alerts.

“Yes, do what you have to do, but consult with a partner that has helped us in the past and can help us moving forward,” Mr Fountain said. Emphasising that he is not blaming or criticising any government, he added that his research showed similar private aviation fall-out over Customs fee increases occurred more than one decade ago.

“You know what blew my mind away?” he said of those events in 2013. “To me, it tells me some alarming things. It tells me we have not learned from our past mistakes or we have failed from one leadership team to the next to share information and process requests for future guidance.

“Earlier this year we had the deputy prime minister, who is minister of tourism, saying that tourism is everyone’s business. It’s not just my business, it’s not just your business, it’s Bahamas Customs’ business, it’s Bahamas Immigration’s business, it’s Bahamas civil aviation’s business, so communication and collaboration are the key backdrop to fiscal responsibility.

“We cannot be making these decisions like this that impact such a huge sector of our business without consultation.” To soften the financial impact, Mr Fountain suggested The Bahamas “transition” what it is doing with annual/semi-annual cruising permits for visiting boaters to the private aviation industry so that someone regularly flying to their home in Treasure Cay, for example, does not have to pay $300 every time for the privilege.

Besides offering discounted long-term fees, Mr Fountain added: “The benefit of that is that it requires less manpower. People forget that time is money. If you are selling me an annual pass, Customs does not always have to come and check me and can do something else.”

The economic impact generated by private pilots and their guests is especially significant in the Family Islands where they help to spread and diversify the wealth. Their spending boosts the likes of hotels, vacation rentals, tour operators, ground transportation providers and restaurants.

The inbound/outbound fee increases associated with aircraft declarations tie-in with the Government’s Budget position that certain fees were to be increased to cover the costs associated with providing public services. They also align with the Davis administration’s policy, unveiled in the 2023-2024 Budget, of seeking to increase fees on foreign visitors to The Bahamas while minimising those on Bahamians.

The Government likely perceives the private pilot/aviation industry as having deep pockets, viewing private plane ownership and use as a sign of wealth, and able to easily absorb the fee increases laid out in the Customs Management (Amendment) Regulations 2024. They also include a $2,500 fee that will be levied if an aircraft declaration is submitted less than one hour before the plane arrives in The Bahamas.