The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Long Island yesterday became the second Bahamian island to declare private aviation visits were at “an all-time low”, with Stella Maris’s fixed-based operation (FBO) owner revealing fuel sales had slumped to their worst level since he acquired the business 15 years ago.

Al Wehrenberg, principal of Hawkline Aviation, told Tribune Business that the company’s aviation fuel sales were down 30 per cent for September, and off 20-25 per cent for 2013 to-date.

Blaming the Government’s new and increased aviation taxes for a significant amount of the business fall-off, Mr Wehrenberg said no private pilot had visited the Stella Maris Airport for the past two weeks.

And, disclosing just how the new taxes were producing a net loss for the Government, he described how a regular 15-plane strong fly-in group - regular visitors to Stella Maris and the resort - had warned “they will most likely cancel future visits” because of the increased costs.

“Our financial analysis revealed the resort, taxi operators and the FBO’s lost sales revenue for this 15 aircraft fly-in cancellation approximates $41,500,” Mr Wehrenberg told Tribune Business.

“Lost government revenues, including hotel tax, Out Islands Promotion Board levy, aviation fuel Excise Tax and Royalty, and Departure Fees, approximates $3,250. All because Government wants to charge each arriving aircraft $50.00 with their new July 1 fee.

“Can’t they see they just lost $3,250 simply to possibly make $750 (15 aircraft x $50). We sent this analysis to various government ministers and representatives, and we were not even acknowledged with a reply.

“This is only one group on one island. What about the impact throughout all islands? Unemployment is at an all-time high.... think about those people who now may lose their jobs with the further decline in tourism. Does anyone in Government care any more?”

In an interview with Tribune Business, Mr Wehrenberg said Hawkline’s aviation fuel sales were down 20-25 per cent for the year-to-date.

“I don’t see a major change,” he added. “This is probably our worst year since 1998 in terms of gallonage.

“We haven’t had one private pilot land at the airport for a week or two. It’s just dried up.”

As for the loss of the 15-strong private aviation group, Mr Wehrenberg added: “They’re [the Government] going to lose the whole amount and not get the $750.

“Does anybody in government do a financial analysis when it comes to things like this? The answer is: ‘Probably no’.”

In an earlier e-mail, Mr Wehrenberg confirmed to Tribune Business: “Private aircraft activity has hit an all-time low and has been negatively impacted by ongoing Government fees. So much for building tourism.

“Our volume this month alone is down 30 per cent, and projections for the next several months do not look promising.

“When we acquired the FBO business in 1998 and moved to Long Island (originally resided in New Jersey), we were told the Bahamas was pro-business and had relatively minimum taxes.”

Suggesting that this no longer applied, Mr Wehrenberg took Tribune Business through the tax burden imposed on a gallon of aviation gasoline.

Prior to July 1, this had consisted of 7 per cent Excise Tax on the fuel supplied from Florida, adding roughly 35 cents to the selling price.

Royalties on aviation fuel imports added another seven cents, with annual Business Licence taxes imposing a further four cents. And, with the new 1 per cent Customs administrative processing fee, another five cents per gallon in government taxes have been added.

“These four ‘taxes’ combined add 51 cents to the gallon selling price,” Mr Wehrenberg told Tribune Business, adding that he was now selling his product at $7.50 per gallon.

And, on top of this, the Government had added in the 2012-2013 Budget the new $50 fee for Customs to process private pilot declarations, and a departure fee of $25 per person.

Mr Wehrenberg’s situation mirrors that facing FBO operators in Abaco and other Family Islands.

Randy Key, principal at Zig Zig Airways, told Tribune Business earlier this week that its aviation fuel sales had slumped 30-40 per cent year-over-year.

Pointing out that the Government earned $0.07 in royalties for every gallon of aviation gas sold, Mr Key said its drive to generate $4-$5 million in revenues from the new fees was likely to result in a “net negative” - for both itself and the wider Bahamian economy.

“The Marsh Harbour International Airport right now is like a ghost town,” Mr Key told Tribune Business. “I’m here at the main terminal at 4pm in the afternoon, and there’s not a single private aircraft on the tarmac. There’s not a single one here.

“It’s the small single and twin engine guys that have just decided they’re not going to put up with these fees, and as a matter of principle have decided to go Florida and elsewhere. People have told us they’re just not coming this year, and are flying to other destinations.”

Calling on the Government to listen to the cries of the private sector, especially those most impacted, Mr Key said in a letter to this newspaper: “When those of us in the aviation industry can tell you general aviation flights into the Abacos are at an all-time low, it would be reasonable for someone to take note.”