Minister of Tourism Dionisio D’Aguilar.
By NATARIO McKENZIE
Tribune Business Reporter
THE government has finally given the go-ahead for aviation chiefs to charge airlines fees for using Bahamian airspace.
The move – long championed by The Tribune – could earn millions of dollars in revenue every year.
In a long running campaign The Tribune has repeatedly warned we should be like the vast majority of countries around the world who generate significant sums for their treasuries by charging overflight fees.
Now, finally, the Minnis government has announced it is going to do just that.
The US Office of Inspector General stated in its December 2017 audit that the FAA has billed an astonishing $800 million in over-flight fees between 2006-2016. The FAA billed an estimated $106 million in over-flight fees in 2017, with an estimated $126 million to be billed this fiscal year. A significant portion of this revenue will involve flights which have used Bahamian airspace.
Tourism Minister Dionisio D’Aguilar yesterday stressed the over-flight fees we collect will only be used for the management and upgrade of the country’s air navigation system, telling this newspaper: “We’re not going to pay off the national debt with this”.
His comments come after Government in a statement said this nation and the United States had resumed negotiations in Nassau this week regarding the management of the sovereign airspace of The Bahamas.
In an interview with Tribune Business yesterday, Mr D’Aguilar noted that this nation currently does not have the capacity to manage its entire airspace by itself. Since 1952, a portion of the air traffic through the sovereign airspace of The Bahamas has been managed by the Federal Aviation Administration (FAA) of the United States. Air traffic within 60 nautical miles of the Lynden Pindling International Airport and up to 12,000 feet has been managed by Bahamian air traffic controllers.
Mr D’Aguilar told Tribune Business yesterday: “We have resumed the negotiations as it relates to the management of our airspace. There was no agreement made per se but a path to an agreement was laid out. Obviously when you are negotiating with a foreign government there is a need to always seek consultation with the many arms of government that are involved in these types of agreements. These things take time. The discussion over the management of the sovereign airspace of the Bahamas has been ongoing for the last 25 years. The Bahamas has decided to pursue a different approach and to formalise what currently exists. The sovereign airspace over the Bahamas is currently managed by the FAA and a portion is managed by the government of Cuba. What we are establishing is first of all the recognition that it is our airspace and we get to decide who gets to manage our space on our behalf. We don’t have the capacity to manage it entirely by ourselves.”
The Government indicated as much in its statement saying: “The purpose of the bilateral talks is to formalise the current arrangement with an agreement that would detail the conditions under which the FAA would continue to manage that portion of the sovereign airspace of The Bahamas presently under its control. The agreement would detail the services that the FAA would continue to provide to ensure the safe and efficient management of aircraft that move through Bahamian airspace.
”In order to invest in technological improvements in the management of air traffic within Bahamian airspace, the Government of The Bahamas has also decided to collect charges from airlines flying within the airspace, as is common practice throughout the world.”
Mr D’Aguilar told Tribune Business: “The question is, if we were to come up with an agreement what would that look like, if we were to basically contract the FAA to manage our airspace? We would then seek to begin charging overflight fees to assist us in absorbing some of the cost associated with managing this airspace. Managing the sovereign airspace of the Bahamas is expensive. In the past we have not been collecting any fees to cover our costs.”
Mr D’Aguilar added: “This is an attempt to put in place a mechanism that would recognise that this is our airspace and we get to decide what the fees are and to raise funds to assist in the cost associated with managing a safe aviation sector. You cannot use overflight fees to build roads, hospitals and items not associated with providing air navigation service. Let’s just put the public to bed on that. You’re not going to pay off the national debt with this. You could only raise and charge fees to cover the cost associated with managing your air navigation services. This is a very expensive undertaking for the government which we had been providing but we hadn’t been exercising our right as a sovereign nation to assist in mitigating these costs.”
Mr D’Aguilar described negotiations with the FAA as having gone ‘extremely well’.
“The FAA was extremely supportive, understood perfectly what we were attempting to do and were very helpful. The negotiations went extremely well. Once we established the format for the arrangement. We have to negotiate an agreement that can get Cabinet approval and begin to collect some fees to help us to first of all ensure that our aviation sector has the necessary infrastructure to ensure the continued safe passage of aircraft through our airspace. I want to emphasise that that is the purpose these fees will be used for.”
Last January, the Christie administration hailed as a “landmark accomplishment” the agreement with the FAA to exempt Bahamian aircraft operators from the payment of over flight fees for domestic flights. Then Prime Minister Perry Christie said at the time the deal would save the national flag carrier, Bahamasair, around $1 million over a three-year period.
“The previous administration was able to get Bahamian aircraft exempt from paying the fees and that was substantial because it was almost objectionable that we were paying air navigation fees to a foreign government to travel through our sovereign airspace. We want to assume the function of collecting the fees and determine what the charges will be. That’s what we are attempting to do. I remain ever hopeful that we get the outcome we deserve,” said Mr D’Aguilar.
In its campaign to persuade the government to charge overflight fees the Tribune has pointed out other than winning the exemption for using our own airspace, the previous government made no progress whatsoever on charging foreign aircraft.
SkyBahamas’s chief executive Randy Butler yesterday applauded the move to resume negotiations with the FAA, telling this newspaper: “We have to now follow through”. Mr Butler said: “I think it’s good they will resume those negotiations. It’s good news but there are no definite timelines or targets. It seems a bit ambiguous right now. The question is when is it going to happen? We keep hearing about these negotiations. The announcement is very good, I’m happy but it gives me nothing to sink my teeth in. We have to now follow through”.