The Tribune

A senior tourism executive yesterday urged The Bahamas “to convert our proximity into affordability” after multiple airlines serving this destination warned: “We’re being taxed to death.”

Kerry Fountain, the Bahamas Out Island Promotion Board’s executive director, while moderating a panel discussion at the Abaco Business Outlook conference also challenged this nation’s focus on “record-breaking” arrivals numbers as masking cost competitiveness concerns and the ever-escalating reliance on lower spending cruise visitors.

Both Tracey Cooper, Bahamasair’s managing director, and Stuart Handley, Aztec Airways’ chief executive and owner, identified taxes and fees imposed on the airline industry and its passengers as the leading challenge their operations face in providing the necessary airlift access to fuel this nation’s largest industry.

Mr Handley, asked to name the greatest obstacle faced by his company, replied: “It’s one word: Taxes.” To which Mr Fountain replied: “Say that again?” Mr Handley continued: “Fees. We are being taxed to death. It would be nice to bring you as many as we can, and everyone wants affordable lift, but when I have to pay the same landing fees and same Customs fees for my plane as American Airlines for a 100-seater it’s kind of imbalanced.”

The Aztec Airways chief was backed by the national flag carrier’s chief executive, with Mr Cooper also identifying the level of taxation at all stages of the tourism process - from airlines to the airports and the hotels - as the top concern for Bahamasair.

“It’s just what you’ve spoken to already. Obviously, the taxes not just on the air side but also on the land side, the hotels etc,” he said. “I tell everyone that Abaco probably has the best airport outside of Lynden Pindling International Airport (LPIA). The infrastructure is there, the runway is nice, and there’s the ability to land at almost any time which is not something you get at many airports around The Bahamas.

“The real issue is just the affordability. I was talking to my colleague who is in charge of the charter section over there, and she was putting together a quote for a charter which was about to go from Nassau to Aruba. It was $100, $104 to be exact, for each passenger for taxes along with what we have to charge.

“Sometimes it puts a bit of pressure on our pricing structure. We have to be a bit less aggressive in pricing than we would like to be because of the overall price tag to the consumer. They may be going some place else rather than coming our way. I’m being real cautious here. I work for the Government myself. It’s something we have to look at.”

Recent Customs inbound and outbound fee increases, as part of reforms introduced with the 2024-2025 Budget, have already provoked uproar among the private aviation industry. Mr Fountain yesterday warned that these airline and aviation-related fees, especially if there are increases, are almost inevitably passed on to passengers in the air fare which, in turn, raises tourist costs to access this destination.

“Let me explain and to you all and ask the tourism folks,” the Promotion Board chief said. “When we so a SWOT analysis for The Bahamas - strengths, weaknesses, opportunities and threats - the number one strength with The Bahamas is proximity.

“You would think ,like a taxi cab, you’d hop in the cab and the ride is shorter, so you pay less. It actually costs more to fly from Fort Lauderdale to here than it costs to fly from Fort Lauderdale to Puerto Rico. Sometimes to Cayman, sometimes to Cancun. Does that make any sense?”

Mr Fountain attributed the relatively high air fare costs to the taxes built into passenger tickets. While US taxes were included in this, he pointed out that Bahamian-related taxes also account for a significant share of these costs.

“You have to look at the ticket you buy,” he added. “If it’s $250m, do you know how much of it is taxes? A lot of it is US taxes, but there’s also our taxes. And, to compound the problem, do you know how cheap it is to get here now on a cruise? I’m sharing all of this because you all need to know.

“So when we start talking about these record-breaking numbers who do we want? Do we want a cruise visitor who spends $110 or $80, or someone who spends $2,500 and stays four or five nights? You see, that’s the business of tourism. When we talk about fees, that’s how important it is. We have to convert our proximity into affordability. That’s the challenge.”

The Bahamas is increasingly viewed as a high-cost, high-end tourist destination that has priced itself out of several travel segments including mid-market tourism. Hotel owners and operators, though, will argue that they have no choice but to target the market’s top end otherwise they would be unable to achieve a profit due to this country’s relatively high electricity and labour costs.

Meanwhile, other airlines servicing The Bahamas yesterday revealed their greatest challenge is often the lack of co-operation they receive from key government agencies - especially Customs and Immigration. Esmond Johnson, Silver Airways’ regional manager, said the carrier has been “working through challenges” of encouraging officers to remain at their stations for an extra hour when a flight is delayed.

“It comes down to sometimes airport staffing,” he explained. “We do have a challenge from time to time with some of our business partners, some agencies in terms of supporting the operation whenever there are irregular operations. That is something we have been working through.”

Confirming that Silver Airways has sometimes had to “involve” Dr Kenneth Romer, deputy tourism director-general and aviation director, to resolve these woes, Mr Johnson confirmed that the agencies he was referring to were Customs and Immigration. “That’s one of our major challenges from time to time,” he added.

“We all want the airlift. Airlines are being asked to increase their frequency and add more routes. We also need our business partners on the ground to help support those operations. The aviation business is one with many challenges and intricacies.

“There are many things that can cause delays and can cause diversions, like I said, irregular operations. From time to time, whenever you are a little off schedule, you may have a situation where there are certain agencies that may not want to remain in place in support of the operation,” Mr Johnson continued.

“We don’t want to cancel the flight, so we have to try to do our best to work with those partners to say we need to bring this aircraft in, we have ‘x’ passengers on board, we have people waiting to depart, can you stay an extra 30 minutes or extra hour to support the operation? We’ve been working through it and it seems to be getting better, but it’s a challenge.”

Patricia Summerfield, director of sales and partnerships at Tropic Ocean Airways, told the panel discussion that the carrier has been receiving increasing push back from Customs over its requests for landing permission for its seaplanes at various locations in the Abaco cays.

“Separate from scheduled service, and Dr Romer I was going to talk to you about this, it’s been accessibility,” she said of Tropic’s greatest Bahamian challenge. “For those who don’t know, we have a fleet of 14 aircraft and a lot of those are seaplanes, amphibious, so they can land on the runway or in the water.

“Historically we’ve been able to land with no issues, and Customs has come out to meet us on-site, and now it seems other than Baker’s Bay most of the time Customs is pushing back and says we need landing permission. We’ve searched for several locations throughout the Abaco cays but it just takes a bit of time.

“We want to offer that direct route. That’s why they’re taking a seaplane and they don’t want to have to stop for Customs because why are they paying extra money to land right there? That’s the biggest challenge so far.” Ms Summerfield said Tropic’s ambition was to build tourism without building runways via its amphibious fleet.