The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamasair's chairman last night said he was investigating the airline's failure to equip three of its jets in time to continue flying to the US, and said: "The chips will fall where they may."

Tommy Turnquest, pictured, the former Cabinet minister and MP, told Tribune Business that himself and the Board had not been given sufficient warning that the initial supplier hired to outfit Bahamasair's three 737-500 jets with the tracking and navigation equipment demanded by US regulators had failed to meet its contractual deadlines.

"I'm having an investigation done to find out more," Mr Turnquest said. "The chair and the board wasn't advised that the initial supplier was having difficulty in sufficient time. We're still going through the process of getting more information, and the chips will fall where they may.

"I accept responsibility. I'm the chairman. The lot is under me to make sure there's a full review of the whole process, and we'll deal with it." Bahamasair's latest controversy stems from the inability of its three older 737-500 jets to fly to the US from January 1, 2020, because they have not been fitted with the necessary flight tracking technology required by the Federal Aviation Administration (FAA).

The FAA's requirements have been known by the global aviation industry since 2010. All planes flying to the US need to be fitted with ADS-B (Automatic dependent surveillance - broadcast) equipment, which will cost Bahamasair $195,000 per plane for each of its three 737-500 jets.

The three installations were supposed to have been completed through one aircraft being outfitted every month between September and November last year. However, Bahamasair is alleging that the initial supplier, Fokker, to which it paid a $200,000 deposit, was unable to deliver and only informed it of this after the third aircraft deadline was missed.

This prompted a scramble to locate another supplier, which has promised to source the necessary equipment and complete the installations by end-January, Mr Turnquest confirmed yesterday. He pledged that "every effort will be made to recoup" the $200,000 deposit paid to Fokker, and "instructions" had already been given to obtain its return.

Bahamasair's position, he added, is that Fokker has failed to meet its contractual obligations, and it now wants to switch the funds to paying the new supplier, Janzair. Mr Turnquest said he had been informed Bahamasair "didn't know" Janzair was in a position to supply and install the tracking/navigation equipment until it was told about the company by Swift Air, from whom it has leased planes before.

Bahamasair's three 737-500 jets have swapped roles with the national flag carrier's ATR turbo prop fleet until the installations are complete, meaning they are servicing domestic and non-US international routes to the likes of Cuba, Haiti and Turks & Caicos, while the latter are taking the burden of the Miami, Fort Lauderdale and Orlando routes.

Mr Turnquest denied that the switch would further increase Bahamasair's losses, or negatively impact its fuel costs and maintenance. "There's no difference between that and going into Florida," he said of the routes now being flown by the 737-500s.

"These are old aircraft. It's roughly the same distance and same amount of usage. That's a non-issue in my view." Asked whether the carrier's financial situation would also take a hit, Mr Turnquest said: "We'll do a full analysis but, in my view, no."

Bahamasair's 50 and 70-seat ATR turbo prop fleet are unable to match the passenger-carrying capacity of the 120-seat 737-500s, but Mr Turnquest said they were a better fit for current demand as "US travel drops off significantly at the beginning of the year. The load factors are very low".

The national flag carrier added that it would "wet lease" jet aircraft to handle flights into Miami, Fort Lauderdale and Orlando should the smaller ATR turbo props be unable to meet passenger demand at certain times, as occurred over the weekend.

Some observers fear "wet leasing" - where Bahamasair rents a plane complete with its crew, maintenance and insurance - was "horrendously" expensive for an airline that is due to receive a $22.4m annual taxpayer subsidy this year.

Mr Turnquest, though, denied this, adding that the weekend's "wet lease" had likely produced a small profit for Bahamasair. He added that in using the jets on the Florida routes "you're not making the maximum use of your resources".

"Bahamians like the jets because they can carry the bags and so on," he told Tribune Business, "but Bahamasair has to be financially prudent in the use of its resources. We wet leased yesterday [Saturday]. One round-trio into Fort Lauderdale and back yesterday morning, and it came back and did Nassau to Orlando and back.

"The good thing about that is while we have 120 seats, with the wet lease we were able to use a 157-seat plane. Not only did we cover the cost of the wet lease but we put some money to the bottom line through the greater load factor. We made some money on the lease."

Dionisio D'Aguilar, minister of tourism and aviation, yesterday told Tribune Business he was only informed of the situation "three business days" prior to the January 1, 2020, deadline to comply with the FAA's demands.

He said Bahamasair had been justified in waiting to outfit the 737-500s, which are 25 year-old aircraft, until it knew it was keeping them in its fleet, but suggested the airline may have made a mistake in allowing Fokker to miss all three installation deadlines before it went to "Plan B".

"I don't anticipate any big hiccup," Mr D'Aguilar told Tribune Business. "At the end of the day we've swooped in with a mitigation plan. There probably will be some hiccups; there always are with Bahamasair, but we're entering into January which is traditionally extremely slow.

"Certainly, Bahamasair has got you covered. That's what most Bahamians will be asking, and yes, they have. Management has assured me that they have got this covered. It's not like they haven't had a wet lease before. It may cost a bit more to operate these jets, but we're not perfect in business. Business people make mistakes every day.

"We can all Monday morning quarterback on this. With hindsight one might say when they [Fokker] missed the first and second deadline, they should have ratcheted it up at that stage rather than wait for them to miss the third deadline and only then give a warning. They were probably not minded to do that as they'd paid a $200,000 deposit."

Mr D'Aguilar said the funding and authorisation for the equipment installations had already been approved, adding that it was an execution issue for Bahamasair's Board and management rather than himself or the Cabinet.

"The PLP are creating political mischief out of this, and there's really none to be had," he added.