The Tribune

A Tribune special investigation reveals the Bahamas has forfeited millions in potential earnings because of government delays in concluding a revenue-sharing agreement for overflight fees . . .

The Ministry of Aviation and Transport’s failure to conclude a revenue share agreement with the Federal Aviation Administration (FAA) has allowed the US Department of Transportation to pocket an astonishing $591 million in ‘overflight fees’ since 2011.

Despite claims from Glenys Hanna Martin in January that this newspaper’s investigation into the uncollected revenues was “false news”, according to documents obtained exclusively by The Tribune the Bahamas cash-strapped Public Treasury - unlike 180 other nations around the globe - has yet to receive a cent while the US Federal Register records that the US FAA collected an estimated $355 million plus in ‘overflight’ fees between the financial years 2012 to 2015.

With the ever increasing fee structure, the Congressional Budget Office estimates the FAA would collect $117 million in 2016 and the FAA’s Eastern Regional Task Group Report states that that figure was expected to surge with the “reopening of commercial air services between Cuba and the US as carriers add between 40,000 and 70,000 new flights to the already crowded high altitude Sectors 40 and 60 of the Miami Oceanic East (ZMA) airspace” which lie within the geographical borders of the Bahamas archipelagic state.

The FAA gained authority from Congress in 2000 to charge carriers whose “overflight” fees for flights that traverse US controlled airspace, but neither land nor take off in the United States, according to reports from the Government Accountability Office, US Inspector General’s Office, Audits of the FAA, the Congressional Budget Office, FAA Office of Financial Controls and International Airline Aircraft Owners and Pilots Association.

Since 2006, ATC Reform News states: “The FAA applied this authority, without protest from the Bahamas government”, to foreign and Bahamian carriers whose 511,000 flights use the sovereign airspace of the Bahamas (re-designated by FAA as ‘Miami Oceanic (ZMA) and is now considered part of the Continental US En Route Airspace) which straddles the key air routes between South Florida and Cuba, Latin America, Central America, Puerto Rico, Haiti, Dominican Republic, Jamaica, Caribbean, Mexico and Europe.

Robert Poole Jr, Director of Transportation Studies at the Reason Foundation, states in his report, “Solving Air Traffic Control Funding Crisis,” that “the Bahamas is one of only 20 small and relatively poor countries in the world - Benin, Brunei, Comoros, Gambia, Guinea-Bissau, Guyana, Kiribati, Kuwait, Lesotho, Monaco, Namibia, Samoa, Sao Tome and Principe, Somalia, Swaziland, Togo, Tonga, Tuvalu - that don’t charge for ATC services.”

Sky Bahamas CEO, Captain Randy Butler, said: “I’ve been saying for years it’s worth millions, but I never dreamed it was worth hundreds of millions a year. I can’t believe the PLP are celebrating as if they’ve won the PowerBall lottery when all they have done is stopped a foreign entity (FAA) from charging Bahamian airlines for the privilege of flying our own nation’s airspace, which they haven’t had the authority to do so, and used this money to fund their Essential Air Services Act.”

On January 11, Prime Minister Perry Christie announced that the Government had reached a “landmark and historic” agreement with the FAA which will result in the exemption of Bahamian aircraft operators from payment of overflight fees to the FAA on flights which take off and land in the Bahamas.

Two months later, the Government’s ‘declaration of intent’ with the FAA formalised the January accord, which was billed as a first step towards the Bahamas taking back control of its air space and establishing a Flight Information Region (FIR), something that will allow the country to levy and collect fees from airlines flying over the Bahamas rather than the FAA.

Under the agreement, the FAA will continue to manage Bahamian airspace, as it has done since 1952, for another 10 years to allow the Bahamas to build the necessary technical, human and infrastructure capacity to develop its own FIR.

Mrs Hanna Martin said the March declaration had a number of components “and one is that the levying of overflight fees for domestic aircraft ceased on January 1, 2017. The declaration of intent indicates that there will be an absolute legal initiative to stop it completely. It also indicates that we will enter into a 10-year agreement that will deal with the FAA manning the airspace. The Bahamas government will collect the overflight fees and will agree a management fee for the US, which has the technology and the human resources for that purpose.”

A 2004 International Civil Aviation Organisation paper on the proposed Bahamian FIR had said that apart from the country taking “full control over its sovereign airspace”, the initiative would create 100 direct jobs and annual government revenues of $30 million. Given the increase in aviation traffic to the Bahamas over the past decade, it is likely the earnings would be more. But little had been done in the 13 years since.

The late Prime Minister Sir Lynden Pindling and former Deputy Prime Minister Arthur Hanna had agreed to the continuation of the FAA’s air traffic control authority - initially delegated to the US at the International Civil Aviation Organisation (ICAO) special meeting in Cuba in 1952 - in 1975. For many years the PLP reaffirmed this authority, while failing to re-institute any overflight fees, which is standard practice around the world. This was contrary to Mr Christie’s claim that the Bahamas had actually been charging overflight fees since December 14, 1951.

“While the FAA has continued to manage and control this airspace, since 2006 Bahamasair and other carriers in the Bahamas have had to pay the FAA for the right to fly within the Bahamas,” said the Prime Minister, admitting that “the revenues earned to this point for all aircraft overflying the Bahamas airspace have been retained by the FAA”.

“Does the Prime Minister not appreciate what a mockery the USA is making of the PLP’s campaign promise to ‘Put Bahamian’s First’ while US airlines fly over our nation for free and we have yet to receive a dime on any of this revenue?” Capt Butler told The Tribune. “Can the Prime Minister please tell me when SkyBahamas, Bahamasair and other carriers are going to get a refund from the FAA?”

We March co-founder John Bostwick said he did “not fault any government for delegating the FAA with responsibility to provide high altitude air traffic control services to our nation as it’s such a capital intensive, complex and risky undertaking. While one can delegate responsibility of the provision of air traffic control services over its territory it does not derogate one’s sovereignty but said state retains competency to exercise its legislative, administrative and judicial powers exclusively within our national borders.

“What concerns me is that the PLP appears to have sold the sovereign ownership of our nation’s air space and internal waters to the Americans. When one stops to consider the FAA’s Eastern Regional Task Group estimates over 511,000 flights traverse our sovereign airspace each year while Aviation Minister Hanna Martin has allowed a foreign entity to tax the citizens of our sovereign nation without our consent ... yet those flights, which take off and land in the US, or US-registered planes, have used our airspace for free since 2011.”

“Even the blind can see we are talking millions of dollars,” one aviation expert commented, “especially when you’ve had the proposal lying on your desk for over five years.”

Mrs Hanna Martin refuted assertions in a Tribune article in January that accused the Progressive Liberal Party of being responsible for the country’s loss of millions of dollars in overflight fees, charging that the newspaper was engaging in “fake news” and a “perverse misrepresentation of the facts”. She said the PLP is the only government that has “assiduously pursued the realisation of the sovereign air space of the Commonwealth of The Bahamas”, as well as the “payment of overflight fees for the Bahamian people”. She suggested that the previous Free National Movement administration was to blame for the amount of time it has taken to achieve this, as she said during that administration’s 2007-2012 term, “little effort, if any was made to pursue the 2006 Federal Aviation Administration (FAA) proposal,” which she said was on the table prior to the 2007 election.

Tribune Media Group President Robert Dupuch Carron responded: “It’s just so typical that a PLP Minister would embark upon such a personal and vitriolic attack upon the credibility of our crusading publication instead of explaining how the PLP allowed a foreign entity (FAA) to charge ‘overflight’ fees to Bahamian and foreign carriers using our sovereign airspace since 2006 - despite never being delegated with Parliamentary authority to do so - yet allows flights that take off and land in the United States or private US jets to use our nations air space for free.

“I wholeheartedly support our government stopping the FAA charging Bahamian airlines, but it’s almost unforgivable that the Minister of Aviation allowed thousands of planes and ships belonging to ‘foreign carriers’ to transit our air space and the internal seas of our sovereign archipelagic each day for free.”

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