The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamasair wants regulators to extend its existing approval to operate in the US, which is due to expire today, until this authority is fully renewed amid opposition from major American airlines.

The national flag carrier, in an October 1, 2024, regulatory filing requested that the US Department of Transportation “continue the existing authorisation” for it to provide passenger, cargo and mail services in the US while it awaits renewal of this permission for a further two-year period through to 2026. That “existing authorisation” is due to expire on October 3.

Bahamasair’s latest move comes as both Chester Cooper, deputy prime minister with responsibility for tourism, investments and aviation, and the US embassy in Nassau each reassured that the airline will have no problems servicing its existing US flight schedule, routes and markets until the Department of Transportation’s decision.  

This is despite the Airlines for America consortium, whose members include American Airlines, Jet Blue, FedEx, Delta, Southwest Airlines and United Airlines, urging the US Department of Transportation not to renew Bahamasair’s regulatory approval until their concerns over this nation’s air navigation services fees are resolved.

The airline consortium, as reported by Tribune Business earlier this week, has made it crystal clear that its bid to create roadblocks for Bahamasair and other local carriers is merely a tactic to obtain leverage and force The Bahamas to bow to its will over the revised air navigation services charges that this nation plans to impose on all users of its sovereign air space.

Mr Cooper yesterday accused Airlines for America and its members of taking “a swipe at Bahamasair”, and attempting to interfere with its ability to provide services in the US, in a bid to find a new angle of attack on the Government and Bahamas Air Navigation Services Authority (BANSA) over the fees.

Asserting that The Bahamas has “a sovereign right” to levy fees on all users of its air space, including the US carriers, the deputy prime minister voiced confidence that “the principles of our position will hold” up against any challenge or attack from Airlines for America.

“This will have no impact on the ongoing operations of Bahamasair. The Department of Transportation has indicated to us that they have no concerns as it relates to Bahamasair. They understand what the issues are. They understand what the previous complaints have been from this association of airlines,” Mr Cooper told reporters outside the House of Assembly.

“The conversations are continuing as it relates to the overflight fees and there is no interest in conflating the two issues. So Airlines for America are attempting to get attention to the matter that has effectively already been litigated by the Department of Transportation by taking a swipe at Bahamasair.

“That’s, in effect, what is happening. We are confident there will be no disruption. There hasn’t been any disruption, and we have great relationships with the Department of Transportation and the United States of America, and I suspect all will be well.”

The US Department of Transportation dismissed Airlines for America’s initial complaint over The Bahamas’ air navigation services charges, also known as overflight fees, in February 2023, finding they did not represent “unfair practices” or “unjustifiable or unreasonable discrimination”.

However, at the same time, the US Department of Transportation revealed it has “serious concerns” that The Bahamas’ fees are excessive when compared to the actual expenses this nation incurs for providing air navigation services.

It suggested these costs may breach the Air Transport Agreement between the two nations, and The Bahamas and US subsequently engaged in discussions at the government-to-government level in a bid to address Washington D.C’s concerns. No full update has been provided on the status of these talks by either side, and if any progress has been made and/or the matter resolved.

Mr Cooper yesterday defended The Bahamas’ air navigation services fee regime by asserting that this nation, like all countries, has a right to charge users of its sovereign air space for the privilege. He suggested that Airlines for America and its members were simply averse to paying increased taxes.

“I think they’re making an effort to bring attention to their cause,” he added, “and we believe in our sovereign right - the ability and right to charge for the use of air space - and we have been very transparent and accountable, and very open in the dialogue.

“That consultation continues. They’ve asked for extended periods of time for consultation and we complied. I think, you know, nobody wants to pay more taxes. I don’t think any of us want to pay more taxes.

“People fight paying taxes, and in the reality of the matter at the end of the day, once we believe that we’re being accountable, transparent and there is cost-relatedness to the services being provided, we are satisfied that the principles of our position will hold.”

Mr Cooper and Bahamasair were yesterday supported by the US embassy in Nassau, which said in a statement: “While Bahamasair currently has an application pending before the Department of Transportation, the airline may continue its flight operations to and from the US under its existing authority.

“The US and The Bahamas share strong economic ties. Our partnership enables frequent and easy travel between our two countries. As part of this partnership, the US-The Bahamas Air Transport Agreement provides open market access for US and Bahamian airlines to offer services between our two countries.”

The issue has arisen after the major US airlines pounced with a September 12, 2024, filing that urged the US Department of Transportation to “defer action” on Bahamasair’s application until the Government and Bahamas Air Navigation Services Authority (BANSA) backed down over what they termed “excessive” air navigation services charges.

Noting that itself, its individual airline members and the US government held talks with BANSA following rejection of its original complaint, Airlines for America added that they still remain dissatisfied with the fee revisions to both “overflight and origin/destination (O/D) traffic” that have been proposed.

Overflight refers to flights that transit The Bahamas, passing through the country’s air space without landing or taking off, while O/D refers to international flights that either originate from or land in The Bahamas. “Unfortunately, despite many comments submitted by industry, BANSA is planning to implement the new charging scheme despite the strong objections of Airlines for America’s members,” it said.

These objections include The Bahamas’ alleged failure to resolve the “significant overpayments on overflights that occurred” under the first set of fees between 2021-2022 and 2023-2024, and continued demands for “clearly improper amounts due”. The US carriers are also claiming that the new fees will “allow a debt transfer affecting carriers unequally”.

And they added: “Despite recent public consultation and previous consultations with the US government, the proposed new charging scheme appears to be a ‘shell game’ of shifting charges to newly proposed excessively high O/D fees.” BANSA has yet to publicly release full details of the proposed new fee schedule, although Airlines for America alleged that consultation ended on August 27, 2024.

The Bahamas’ initial fee structure was split into three components. They include the air navigation services fees, which were to be charged to all commercial aircraft flying over Bahamian air space, and ranged from $8.50 to $51.60 per 100 nautical miles based on the plane’s maximum take-off weight.

Origin and destination fees were to be charged on flights originating from or landing in The Bahamas, and ranged from $10 to $61 per flight based on the aircraft’s maximum take-off weight.