The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamians are “now paying rent in their own home” as a result of the revised air services navigation fees being proposed by the Government-owned regulator, an aviation industry veteran is arguing.

Captain Randy Butler, principal of the former Sky Bahamas, told Tribune Business that the rebalanced fee structure proposed by the Bahamas Air Navigation Services Authority (BANSA) effectively “penalises Bahamians for using their own air space” as well as foreign-owned carriers that provide the airlift to support this nation’s vital tourism industry and other sectors;

Speaking out following publication of BANSA’s proposal to drastically shift the fee burden on to carriers that land and take-off in The Bahamas, and away from those that fly other this nation, he argued that the regime has moved far away from its original goal which was for Bahamians to benefit first from developing the necessary technical and resource capacity to take over management of this country’s air space.

“At least when the US was collecting it they weren’t charging these ridiculous fees,” Captain Butler told this newspaper. “It went from this thing being an asset for us to build capacity and develop the country. Now we’re paying rent in our own home. What are they doing? Where is this money going; $3m-plus a month?

“We’re being penalised for using our air space. Bahamians are paying instead of benefiting from these things, and the goal was for us to benefit from this natural sovereign wealth God gave us in our air space. Bahamians and Bahamian airlines were not to pay to fly in their own air space. It’s been reversed. Bahamians are now charging Bahamians for flying and we don’t know where the money is going.”

Meanwhile, Rick Gardner, a Bahamas Flying Ambassador and director of CST Flight Services, which provides flight co-ordination and trip support services to the general aviation industry, told Tribune Business he had sent multiple questions to BANSA over how the new fee regime and its application will impact private pilots.

Besides seeking answers on whether single-engine planes will still be exempt from the charges over the next few years, as occurred between 2021 and 2024, he added that he has also posed questions on how BANSA’s proposed penalties - including liens that may be attached to aircraft belonging to different pilots - will work. 

“I asked a lot of questions about how this is going to play out,” Mr Gardner said. “The part that took people aback is this retroactive provision. How can it be legal? To my mind, that’s the part that’s really over the top to the demise of the Bahamian operators. Nobody has said what a great idea this is.”

Under the proposed BANSA fee adjustments, all take-off and landing fees - known as origin/destination charges - will endure between four-fold and six-fold plus increases over the next four years to 2028-2029.

BANSA’s “cost base review and charges adjustment” proposal, dated February 2025 and which has been seen by this newspaper, is shifting the fee burden away from overflight fees - levies paid almost entirely by international carriers that fly through Bahamian air space without stopping in this nation - to so-called origin/destination charges.

The latter are fees levied on planes that take-off and land in The Bahamas, and BANSA’s own consultation paper revealed that 77 percent of such flights between May 2021 and December 2023 were operated by locally-owned carriers or charters. All origin/destination charges are proposed to suffer between four-fold and more than six-fold increases, ranging from a minimum of 294 percent to a high of 679 percent.

In contrast, all overflight fee categories will enjoy reductions in both absolute dollar and percentage terms, with the latter involving cuts ranging from 36 percent to a maximum of 69 percent. The BANSA paper, citing the example of an ATR72-600, said the overflight fee rate will be reduced from $29.60 per 100 nautical miles to just $9.16, representing a 69 percent drop or a rate equivalent to 12 cents per passenger seat.

And, for a Boeing 777, the Authority is proposing to reduce the rate for transiting Bahamian air space from $51.60 per 100 nautical miles to $33.01, which marks a 36 percent reduction. And, given that the rate will be spread over a greater number of seats due to that aircraft’s capacity, economies of scale kick-in with the charge per seat or passenger dropping to just eight cents.

However, when it comes to the origin/destination charges (take-off and landing in The Bahamas), the fees for small planes with a maximum take-off weight (MTOW) of less than 10,000 kilograms - the likes of Piper Aztecs, Cessna 402s and Piper Navajos - are increasing from $10 to $65.09 - a 551 percent or more than six-fold jump. The per seat charge for a Cessna 525, a small jet, is shown as $10.85.

While private planes with a single piston have been exempt from both overflight and origin/destination charges, the two categories that make up The Bahamas’ air navigation services regime, all those planes mentioned are twin engine and will likely be captured by it.

As for commercial planes, the origin/destination fee for an ATR 72-600 is proposed to increase by 294 percent from the present $35 to $137.92 - equivalent to $1.84 per seat. And charges for a Boeing 777 will jump more than seven-fold - from $61 to a new capped maximum of $477.05 - which represents a 679 percent hike.

However, BANSA is also seeking to make the fee rebalancing retroactive for the period May 2021 to end-July 2024. BANSA’s February 2025 consultation paper on the air navigation services fee proposals, using heavily-guarded and technical language, did give a hint of what was coming.

It referred to the over and under-recovery of fees during the May 2021-July 2024 period, and said these would be adjusted for “the difference between the actual costs for the provision of services as allocated to overflights and origin/destination respectively”.

And, with fee income set to be reallocated according the cost incurred in providing these two separate services, the BANSA paper said airline operators and carriers would either receive a “credit” if they had paid more than their fair share or a “debit” demanding they pay extra to cover their under-billing. Those carriers receiving a “credit” would have this applied against their fees moving forward.

With the burden being re-directed towards take-off and landing fees, their retroactive imposition will largely fall on Bahamian-owned carriers and others that service this nation. Sherrexcia ‘Rexy’ Rolle, Western Air’s president, chief executive and general counsel, clarified to Tribune Business that BANSA is demanding the carrier now pay an extra $2.4m over and above what it has already paid in air navigation services fees.

“BANSA is requesting $2.4m separate from what we have already paid to them, and separate from what was previously invoiced,” she said. “Thus it is not ‘$1.3m-plus’ increase. It is $2.4m they are requesting despite never invoicing or notifying of such charges.”

Based on the fact Western Air has already paid $1.1m in fees for the relevant period, May 2021 to end-July 2024, the additional $2.4m will take the total demand to around $3.5m - more than tripling its bill via a 218 percent increase. Similarly, fellow Bahamian carrier, Trans-Island Airways, has seen its bill more than triple and grow by almost 260 percent compared to the original for the same period.

And, given that the overflight fees component is being substantially reduced in the air navigation services regime restructuring, those carriers likely to be the recipients of The Bahamas’ “credits” are the US and foreign-owned commercial passenger and cargo traffic that flies over this nation without stopping here. In effect, the restructuring represents a wealth transfer from Bahamian to US and foreign-owned airlines.