The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The US has “indicated they want a piece of the pie” if The Bahamas starts charging airlines for flying through its national airspace, a Cabinet minister revealed yesterday.

Dionisio D’Aguilar, minister of tourism and aviation, confirmed that the US government will likely seek a share of the overflight fees that the government is seeking to charge from early 2021 as The Bahamas finally moves to “monetise” its airspace.

He was responding to questions raised by Glenys Hanna-Martin, who had ministerial responsibility for aviation under the former Christie administration, after she pointed out that American airlines are currently charged no overflight fees by their government for transiting Bahamian airspace.

“If we start charging they have indicated they want a piece of that pie,” Mr D’Aguilar said. “We will negotiate with them as best as possible, and use the six-month period to consult with all of the airlines and industry partners and let them know what we’re thinking” to develop a solution satisfactory to all parties.

Mr D’Aguilar, who recently revealed that he hopes to start levying overflight fees by January 2021, said the charge will generate a new revenue stream for the government that can be used to finance the civil aviation sector. In particular, he suggested the income earned could help finance the Bahamas Civil Aviation Authority and end its reliance on government subsidies that have reached as high as $19m.

“Most civil aviation authorities, and most air traffic control providers, generate fees from the provision of their services, and so the Bahamas Civil Aviation Authority has begun, in earnest, the journey to do just that,” the minister said, adding that it was due to receive a $15m subsidy from the government in the 2020-2021 budget year.

“Monetising the sovereign airspace of The Bahamas would involve the implementation of the necessary technology to measure and track each and every aircraft that flies through our airspace. Over 1,000 planes fly through our airspace every day. Almost 90 percent of them never stop. In addition to tracking these aircraft, the technology would need to generate a bill for the distance travelled through the sovereign airspace of The Bahamas, send that bill electronically to the owner/operator of the aircraft, and then pursue that owner/operator for payment.”

Mr D’Aguilar said the Bahamas Civil Aviation Authority had hired outside consultants, ALG Global, an airport and aviation specialist, to help determine the number of flights passing through Bahamian sovereign airspace (overflights); the number of flights into and out of the country’s airspace from international destinations; and the number of domestic flights within the sovereign airspace.

ALG Global will help the government determine who to charge, how much and under what circumstances, Mr D’Aguilar said, based on the distance travelled by planes.

“While the consultation period with industry is ongoing, we will begin the process of selecting a company, hopefully a Bahamian company, that has the technology to track every flight through and within our airspace,” he added. “That company will generate the bill for the airspace user, and either we will use that same company to collect the fees or we will contract with IATA (International Ar Transport Association) to do so on our behalf.”

Discussions surrounding the management of Bahamian sovereign airspace have been ongoing 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 (LPIA), and up to an altitude of 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.

As a result, Bahamian-owned aircraft and commercial flights have been confronted with the ridiculous situation of having to pay the US to fly in their own country’s air space - an anomaly that cost them hundreds of thousands of dollars per year. The Christie administration rectified this during its final months in office through an agreement with the FAA.

The US Office of Inspector General stated in its December 2017 audit that the FAA has billed an astonishing $800m in over-flight fees between 2006-2016. It billed an estimated $106m in 2017, with an estimated $126m to be billed in 2019. A significant portion of this revenue will involve flights that have used Bahamian airspace, giving an insight into the potential earnings for this nation.