The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Despite suffering a $13.941 million bottom line reversal that dropped it to a net $6.172 million loss for its 2012 financial year, the Nassau Airport Development Company’s (NAD) chief executive said it was still creating “an ideal gateway for the Bahamas”.

Speaking as NAD unveiled its annual report for the year to end-June 2012, Stewart Steeves, who is also the company’s president, said NAD’s operating financial indicators were all moving in the right direction.

Addressing a town meeting at the British Colonial Hilton last night, Mr Steeves, who is due to be replaced as chief executive by Vernice Walkine in March 2013, said total passenger numbers going through Lynden Pindling International Airport (LPIA) had risen by 5.3 per cent to over 3.2 million in the 12 months to end-June.

The increase, he said, had been driven by a broad-based increase from the Bahamas’ major source markets. US passenger numbers were up 3.8 per cent, while international and domestic passengers transiting LPIA were ahead 8.1 per cent and 8.9 per cent, respectively.

“This is largely the result of new routes,” Mr Steeves said, pointing to the Copa Airlines flights from Panama, plus the opening of new direct flights from La Guardia and Westchester County airports in the US.

NAD’s total operating revenues, meanwhile, had risen by 19.7 per cent to $55.923 million, compared to $46.667 million in 2011.

Mr Steeves attributed this to a combination of rate increases and passenger volumes rises at LPIA.

Operating expenses had increased, too, rising by 10.4 per cent year-over-year to hit $21.182 million, compared to $19.194 million for NAD’s 2011 financial year.

Mr Steeves attributed this to higher utility costs and insurance increases, required to cover the more modern - and more expensive - LPIA terminals and facilities.

Still, NAD’s total operating income was $34.74 million, compared to $27.473 million in 2011, an increase of 26.2 per cent.

However, NAD’s bottom line was dragged into the red, down from a $7.77 million profit in 2011, due to a combination of interest and depreciation/amortisation costs.

Interest costs increased year-over-year by 122 per cent to $26.84 million, compared to $12.086 million in 2011, while amortisation and depreciation rose by 198 per cent - growing to $13.188 million from $6.659 million. As a result, NAD’s total non-operating expenses more than doubled, hitting $40.913 million for 2012 compared to $19.704 million the year before.

Mr Steeves did not address the net income situation in his presentation, but the increased interest bill is likely to be at least partially due to the $135 million raised earlier this year in the latest round of financing for LPIA’s redevelopment.

The NAD chief executive added that the airport’s $409.5 million redevelopment was “over 85 per cent complete”, with the last phase - the domestic and international arrivals, and domestic departures, terminal, - “well underway” and set for completion in November 2013.

Once completed, Mr Steeves said the project would increase LPIA’s total terminal space by 21 per cent, from 483,000 square feet to 585,000 square feet, with its passenger capacity grown 56 per cent to over five million per annum.

Mr Steeves added that while LPIA was designed for five million passengers, it “can probably do a lot more”if volumes are spread out and design tweaks made.

“It was expected to hit that $5 million shortly after 2020,” he said. “We’ve fallen back a bit on that, given the economic crisis we’ve just gone through.”

Mr Steeves added that NAD was waiting on building permits for a food concession area in the arrivals area, so incoming passenger experienced was improved.

He said that LPIA was being transformed into “a world class facility with a Bahamian sense of place, an ideal gateway for Nassau and the Bahamas. We are very optimistic about the future”.