The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Odyssey Aviation, the fixed base operator (FBO) with a presence in Nassau, yesterday confirmed it was among the rejected bidders who sought to operate The Bahamas’ overflight fee regime.

Steven Kelly, its chief executive, told Tribune Business: “We were told by the Ministry that the bids have been thrown out. The tenders committee looked at them and neither of the RFPs (requests for proposals) was accepted. That’s all the knowledge I have with them. I have had no further communication since then. They were both evaluated and they decided they needed to do other things first.”

Dionisio D’Aguilar, minister of tourism and aviation, yesterday said the development of an overflight regime - which would effectively monetise The Bahamas’ sir space by levying a fee on all aircraft that fly through it - remains a “work in progress”.

Speaking at the signing of an air transport agreement between the US and The Bahamas, he said: “We are negotiating, and when that process is completed we will return to the Bahamian people with an update, but it is moving quite smartly along.”

Mr D’Aguilar earlier this year said the process had stalled, and been set back by six months, after the evaluation committee rejected all bids submitted to manage/administer the overflight fee regime on the government’s behalf.

Pressed on both the Odyssey proposal and the project’s status, the minister said yesterday: “The government hasn’t come up with a structure on how it wants to collect the overflight fees. We haven’t gotten to the stage yet where we know what is going to be the structure under which we charge, how we charge, the rate at which we charge. So we wanted to get some advice on how we do that before we engaged in any proposal from any company; from anybody.

“So we sort of stepped back from it and said how are we going to do this, and let’s get some advice rather than go into the market and let someone tell us what they’re going to do, which may not be in the best interests of the jurisdiction. It may be in the best interests of that particular entity.

“So we wanted to get independent advice on how best to structure it, how to collect it, how to bill it, and what’s the best way forward before we re-enter the marketplace for possible providers of this service.”

Discussions surrounding the management of Bahamian sovereign airspace have been in play for the last 25 years. Since 1952, some 75 percent of the air traffic through Bahamian airspace has been managed by the US Federal Aviation Administration (FAA), with Cuba handling the other 25 percent.

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, but the FAA has been the one collecting the overflight fees involving Bahamian air space.

The potential revenues involved if The Bahamas was to take back the collection of such fees are uncertain, but would likely be in the millions of dollars and represent a significant financial windfall for the cash-strapped Public Treasury - a sum that could at least finance this nation’s civil aviation regulatory regime.

In January 2017, the Christie administration hailed as a “landmark accomplishment” its agreement with the FAA to exempt Bahamian aircraft operators from the payment of over flight fees for domestic flights in their own airspace.

At the time, then-Prime Minister Perry Christie said the deal, which was seen as a possible first step in the Bahamas regaining control of its own air space above 6,000 feet, would save the national flag carrier, Bahamasair, around $1m over a three-year period.

The FAA’s administration of Bahamian air space has meant Bahamasair and other Bahamian-owned carriers have had to pay the US for the privilege of flying over their own country.