The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known airline executive yesterday suggested a $625,000 Inter-American Development Bank (IDB) project would “be better spent” on other sector priorities, as he contradicted assertions that Hurricane Joaquin-related damage “seriously threatens to undermine” recent aviation gains.

Captain Randy Butler told Tribune Business that a newly-approved IDB project, which aims to support a ‘National Airlift Diversification Plan for the Bahamas’, should instead focus on the industry’s “real priority” - implementing regulatory reform to bring this nation into compliance with international standards.

The Sky Bahamas chief added that Joaquin had only served to highlight the “pre-existing problems” at Family Islands, which continue in the aftermath of the Category Four hurricane.

All facilities hit by the storm, Captain Butler added, were now operational, with the damage exposing the Government’s “inability” to finance multiple airports spread throughout the Family Islands.

The IDB, according to documents obtained by Tribune Business, has altered the focus of its ‘airlift diversification’ project at the Christie administration’s request, so that it can also include a plan for “the rehabilitation and operation of the Family Island airports”.

Setting aside the Bahamas’ issues when it comes to diversifying airlift - especially direct airlift - beyond the US and its east coast, the IDB papers warned: “A more immediate challenge in the Bahamas’ air transport sector is dealing with the destruction at pivotal airports and related infrastructure in the wake of Hurricane Joaquin, which now seriously threatens to undermine the connectivity and reform gains recently achieved in the sector.

“Accordingly, by letter dated October 22, 2015, The Government of the Bahamas requested that the majority of resources of this technical co-operation (TC) be dedicated to capacity building, as well as to the strategic business plan for the rehabilitation and operation of the Family Island airports.”

That letter was followed by another on November 11, 2015, in which Ministry of Finance official, Carl Oliver, asked that the IDB be the project’s executing agency.

This, he added, would permit use of the IDB’s permitting procedures, “which are more responsive to the state of emergency conditions which currently exist in the wake of Hurricane Joaquin”.

As a result, $485,000 of the $625,000 project spend, or some 77.6 per cent of the total, will be allocated to develop and implement a plan for the rehabilitation and operation of all Family Island airports damaged by Joaquin.

Captain Butler, though, questioned the need for this investment and the strategic plan it is intended to produce.

Joaquin, he added, had only exposed pre-existing financial, management and maintenance issues at many Family Island airports, most of which remain following Joaquin.

“Those airports are back open to flights, and have the same challenges they had before Joaquin,” Captain Butler told Tribune Business. “The only thing Joaquin has highlighted are the problems at those airports - the pre-existing problems.

“Nothing has changed. Some of them are too low and prone to flooding, and at others the lights and emergency lights have been damaged. Those airports on the whole, and the inability of the Government to finance them, is still a challenge.

“Cutting growth away from the lights, and runway inspections, for the most part have not been happening. It didn’t happen before, and doesn’t happen now.”

To alleviate the financial burden on the Treasury from having multiple international airports on the same Family Island, a pattern repeated throughout the archipelago, Captain Butler suggested that the Bahamas adopt a ‘hub and spoke’ model.

He argued that one airport per island serve as the ‘international gateway’, with others served domestically. Locations such as Long Island and Inagua, he added, could also become ‘hubs’ serving other islands.

Captain Butler also called on the Government to lease Family Island airports to major resort investors, such as Resorts World Bimini and Sandals Emerald.

These developers could then operate and manage these airports, collecting all due taxes and fees on the Government’s behalf. The latter would also gain annual rental income.

The IDB documents show the main aim of the project, which was approved this week, is to develop a plan that would diversify airlift into the Bahamas beyond the current US domination. This will involve developing new source tourist markets, and the papers indicate that Brazil and Latin America are a particular focus.

“Connectivity via air transport to the Bahamas plays a vital role in the economic development of this archipelagic country,” the IDB said.

“Air transport provides a critical service to the leisure and travel sector in the Bahamas, and accordingly underpins 60 per cent of the country’s GDP and 50 per cent of employment.

“Given air transportation’s importance to the country, the sector is currently being reformed and modernised to align the Bahamian governance structures and infrastructure improvements with international best practices for safety, security and sustainability.”

Yet the IDB continued: “For the Bahamas to reach its full potential of competitiveness and realise its growth forecast in a secure and sustainable manner, it is still necessary to address long-standing challenges related to policy, integration, air regulation, and the country’s high dependency on airlift from the United States.”

Captain Butler told Tribune Business that improved connectivity was “still a pie in the sky that we need to make for”.

But, while applauding the IDB’s involvement and intent, he said the $625,000 would be better invested in assisting the Bahamas with its National Development Plan (NDP), and/or separating the industry’s regulatory and operational functions through the Civil Aviation Authority’s (CAA) creation.

“The money will be better spent on that,” Captain Butler told Tribune Business. “The Government has in their hands today what is required for them to comply with international standards.

“Findings have been issued, recommendations have been issued, and the Government has responded with a timeline and action plan.

“If the IDB really wants to help us, I think we should take that money and establish the CAA, and implement the new laws and regulations on the books, and the hiring and training of people for that, where the real priority is.”

The IDB project aims to develop a national airlift diversification plan following an assessment of “existing air connectivity within the Bahamas, and between the Bahamas and potential new markets, including South America”.

It also wants to identify “where potential demand exists to develop airlift to the Bahamas from new markets, and also includes activities for the development of a comprehensive national airlift diversification plan for the development of direct air service to the Bahamas from new markets”.

The IDB added: “The diversification of air connectivity away from North America to other regions such as South America will increase commercial and social links between the islands, and between the Bahamas and other parts of the world.”