Bahamasair facing $1m hangar upgrade

By NEIL HARTNELL Tribune Business Editor BAHAMASAIR'S 2012-2013 government subsidy requirement has not yet been determined due to a number of unknowns, including a likely $1 million spend to upgrade its main 50 year-old hangar at Lynden Pindling International Airport (LPIA). Explaining that the national flag carrier needed a "better read" on what its needs were before it supplied the Government with an estimate for the year beginning on July 1, 2012, its chairman, J Barrie Farrington, told Tribune Business there were several areas that might require investment to get them "in the right condition". "We need to see a little further out how we are trending and look at cash flow," Mr Farrington said. "Some of the things are unavoidable. "There's major maintenance that we have to take care of with the hangar. That needs to be done. It's a 50 year-old building, so there's some things we have to take care of that might cost us $1 million. "We're trying to assess our equipment, facilities and see if there are any central areas for spending money to get them in the right condition. A little further out, we'll have a better read on what the requirements might be, and the requirements from government as far as funding." Bahamasair received an $18.6 million subsidy from the Ingraham administration for its 2011-2012 financial year, and has constantly bled the Public Treasury and taxpayers of multi-million dollar sums every year since inception. Meanwhile, Mr Farrington told Tribune Business that the airline's Board of Directors and management continued to "work diligently" on Bahamasair's restructuring, including an upgrade to its jet fleet and replacing the Dash 8's with Saab 340s. He also confirmed that Bahamasair was working with a "special committee" featuring tourism stakeholders "to see how Bahamasair can best partner and play an enhanced role in the tourism sector. "It's going to take a few years to create the right model and put it into effect," Mr Farrington added. "We're looking at any number of things, and it's getting pretty interesting, but airlift is critical to the future and anything we can do to reduce the reliance on legacy carriers and low cost carriers, and have a chance to determine part of our destiny as it relates to tourism, we will do." Tribune Business reported yesterday how Bahamasair was on target for a $21 million net loss in its 2011-2012 financial year, although Mr Farrington said it was trending in the right direction and eventually "may be able to get near break even if we can get all the pieces to fit". He added: "Where we are today we're on track, and think we might end up, on June 30, with operating results a little bit better than expected....... "This year I expect that we're probably going to end up with somewhere around $21 million as a loss." This, he added, would represent a modest improvement on the $21.5 million net loss incurred for the year to end-June 2011, and would be a result achieved in the face of escalating fuel costs. "I'm not happy, because as long as we're showing up these losses we're relying on subventions from the Government, and drawing on the public purse is not ideal. "We get criticised for that by other operators, who say Bahamasair can do what it wants, as it gets money from the Public Treasury whenever it wants. But we have 623 people who are employed, and contribute significantly to the economy." Mr Farrington disclosed that Bahamasair's industrial agreements had all expired, and it was involved in three separate negotiations with the trade unions who represented its staff - the pilots' union, the Airport, Airline and Allied Workers' Union for its line staff, and the Public Managers' Union for its middle management employees. "Our financial condition does not allow us to offer any improvements, certainly sizeable improvements," Mr Farrington warned. "We're trying to hold the line, keep the costs down if we have any hope of remaining in competitive condition. "We're engaged, and hopefully we will be able to get to the finishing line without too much agony." Looking towards Bahamasair's medium and long-term future, the chairman added: "We keep fighting on and doing the best we can. We may be able to get to a point, if we can get all the pieces to fit, near to break even. That will be the first prize for us. Whether we get there or not, I don't know."


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