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A Young Man's View: Questions Flying Around Broke Bahamasair

By ADRIAN GIBSON

ajbahama@hotmail.com

It is clear that something funky has been going down at Bahamasair, given the government’s rogue - almost dictatorial and sneaky - advancing of $30m to the airline to purchase its new fleet from the French company Avions de Transport Régional (ATR) at a price tag of $100m to replace its aging Dash-8 300 fleet.

What’s more, I have now flown in the ATR planes twice in recent weeks and, as a frequent flyer of Bahamasair, I am most disappointed. Let me establish at the outset that Bahamasair is my preferred airline. If I am travelling, I always check to see if they fly to a particular place and, if they do, though I would sometimes be required to pay more for a ticket than another carrier, I pay because of their record of safety, excellent pilots and my overall comfort. I’ve been flying Bahamasair from before I knew myself, often between Long Island and Nassau and elsewhere. Believe it or not, I have developed a trust and comfort with Bahamasair that, perhaps, many other Bahamians can attest to feeling themselves.

That said, the new ATR planes are, in my opinion, inferior to the Dash 8s.

The government has been short on the details of Bahamasair’s purchase of three 50-seat ATR 42-600 and two 70-seat ATR 72-600 planes.

The government recently described Bahamasair’s $30m as an ‘advance’ to enable the carrier to purchase its new fleet. The advance was purportedly repaid.

Last week, Michael Halkitis, Minister of State for Finance, said the Government had advanced funds without a guarantee to enable Bahamasair to start purchasing its ATR planes, as the $120m loan financing for the new fleet had yet to be completed.

The government’s accounts for the nine months to the end of March, 2016, showed a subsidy of more than $44m to the airline, when the House of Assembly had only approved $14.8m for the full 2015-2016 fiscal year.

Mr Halkitis explained that Bahamasair had secured financing from a consortium featuring CIBC FirstCaribbean International Bank and Credit Suisse to purchase its new fleet, but the facility had not been put in place by the time the first aircraft were due for delivery.

But the question remains: under what authority it was able to advance the funds to Bahamasair? How did the executive branch of government take it upon themselves to go around the Parliament? The House did not approve the additional expenditure. Further, that expenditure was not accounted for in the mid-term budget.

Since Bahamasair is insolvent, has the government guaranteed the financing that the airline has secured from the financial consortium?

According to former aviation minister and FNM MP for Central Grand Bahama Neko Grant: “Bahamasair is broke. For the benefit of the people on the street and for the children in school, if Bahamasair were to sell everything that it owns, including the staple machines on the ticket counter, they will still have to find, as of June, 2014, $23m to pay its outstanding debts.”

The 2013/2014 Annual Audited Report of Bahamasair, tabled in the House of Assembly, shows that Bahamasair’s liabilities exceed its current assets by $23,523,763. The report further said that Bahamasair Holdings Ltd showed a deficit of $555,124,254 at year end (2014) and that it doubted the company’s ability “to continue as a going concern without the continued financial support of the shareholder”. The main shareholder is the government, the taxpayers of The Bahamas.

Recently, I flew on one of the new ATR planes and observed how unusual and chaotic the boarding process can be. Passengers have to board three rows at a time, otherwise the plane would tip over. When deplaning, passengers must exit the plane from back to front, with those to the front sitting and waiting their turn until persons in the backrows deplane. The boarding times are now much longer.

What’s more, the cabin - when compared to the Dash 8s - is much smaller and narrower. Space between the seats is limited. Even more, on two occasions I observed as the luggage was first loaded onto the plane before the passengers could board the flight.

When the planes take off and land, because the plane is so low, you could feel every bump of the runway. I am also informed that the ATR models do not handle rough weather well.

So, was there an inducement or incentive to buy these types of planes? Did anyone do due diligence in investigating the challenges with this aircraft?

Surely, Bahamasair has been around long enough to understand the demographic they serve, yet the purchase of these planes tells me that they do not.

The financing of the planes and the transparency that you would expect, given the chequered history of Bahamasair’s previous acquisition of aircraft, should have resulted in officials dotting every I and crossing all Ts.

Who made the decision to purchase these planes? Who were the experts/consultants?

Why didn’t Bahamasair purchase the new Dash 8 400s which are better for the Bahamas and have proven to be workhorses. Why not stay within that group of aircraft?

I understand that Bahamasair pilots - assigned to fly the ATRs - recently travelled to France for training in a flight simulator. Apparently, there was no space to accommodate them and so they had to travel to Singapore to train. How much did that cost?

Whatever happened to the McKinsey Report on Bahamasair? Why wasn’t it released? Taxpayers paid $1m for that report and yet we don’t know its contents. Did that report recommend that Bahamasair use 19-seat aircraft if it desired to continue servicing the Family Islands? Did they suggest that Bahamasair expand upon its international routes?

Bahamasair recently remodelled its hangar to accommodate the new aircraft. How much did that cost? Who was the contractor that got the job and was it put out to tender?

Why isn’t Bahamasair going to New York, Georgia, California and even Europe (they once had larger aircraft that travelled to Europe). To make the airline profitable, would expanding the airline’s routes to tourist markets not be the best approach to ensure that planes are full?

An offer was made to refurbish the current Dash 8 300s at a cost of $2m to $5m per aircraft. Why did the government not agree to such a proposal?

As it stands, is Bahamasair linked to any international carriers? Do they currently code-share with any international carrier?

Code-sharing is a global distribution system so, for example, one could catch American Airlines from Orlando, Bahamasair from Orlando to Nassau and SkyBahamas from Nassau to Cat Island. A person can pay for a single ticket and it would be as though one was travelling on a single carrier, although a flight might have been operated by another carrier.

Today, Bahamasair is operating three types of aircraft, but do they have adequate, qualified technical staff to fly, fix and maintain these planes? Once pilots begin flying the ATR aircraft that is currently here, they won’t be able to fly the Dash-8s or the 737 jet anymore. So, do they have the manpower?

Are the Dash-8s being sold? Has the government entered into negotiations with anyone?

Who received the finder’s fee relative to the deal with the ATRs? How much was it? Will such a fee also be in the works if the Dash-8s are sold?

We, the people, would like for these questions to be answered.

Comments and responses to ajbahama@hotmail.com

Comments

BMW 2 years, 3 months ago

Retrainig pilots, totally new inventory of parts, modify hangar all added expenses that could have been saved if they had stayed with the dash 8 product. Dumb, plain dumb decision making.

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sheeprunner12 2 years, 3 months ago

Brave is running Bahamasair ............ nuff said ............ he is the king of crooked politicians

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Economist 2 years, 2 months ago

Something does not sound right.

Since when do banks loan $100 million to a business that has always lost money, and huge sums of money at that?

Someone, probably the Bahamian people through NIB, must have guaranteed the loan.

Come on, Bahamasair is over $550 million in the red ink. Who loans money to that?

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beeweel15 2 years, 2 months ago

While some good questions are asked most comments are from an arm chair aviation critic who thinks they know more than the folks who are in the trenches.

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ted4bz 2 years, 1 month ago

And another thing, AMERICAN AIRLINES merged with USAIRWAYS and kept the fleet of USAirways DASH 8's and gave up its entire fleet of ATR's instead. I wish these boys would stop thinking these political appointments are provided to them to go shopping and to spend up our monies recklessly on nonsense.

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