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Airlines: We'd Be Better Grounded

• COVID restrictions make inter-island travel 'loss leader'

• Bahamasair to seek extra subsidy with loads 'under 10'

• 'Not even a handful' of private operators return to skies

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian airlines yesterday suggested they may be better off remaining grounded with COVID-19 restrictions transforming the return of inter-island travel into "a loss leader".

Tommy Turnquest, Bahamasair's chairman, conceded "that's a question you have to ask" when Tribune Business queried whether it was financially worthwhile for the loss-making national flag carrier to return to the skies when the typical flight was carrying "under ten" passengers.

Such volumes represent less than 14 percent and 24 percent, respectively, of the load factors available on Bahamasair's 72-seat and 42-seat ATR turbo prop aircraft, but Mr Turnquest said it was nevertheless vital that the airline fulfill its mandate to provide vital transportation links between Nassau and all the Family Islands.

"I didn't expect any traffic really from Nassau to the island destinations because of the negative COVID-19 PCR test requirement, the cost of it and the 14-day quarantine," he told this newspaper.

"I figured that in itself would dampen demand. I thought there would be some pent-up demand to come to Nassau, but there isn't even that. In the south-east Bahamas, Acklins, Crooked Island, we had a flight back with 30. There were people down there that wanted to come back, but that was just one flight. We're taking a dozen to Marsh Harbour but the numbers are really, really low.

"But I think it's important for the Government to begin to provide some transportation links, which is the purpose for why Bahamasair was formed, but it's definitely a loss leader," Mr Turnquest added. "Somebody's got to do it. The Government has to show we're beginning to assist in terms of opening up the islands of The Bahamas. That's one of the reasons Bahamasair gets its subvention."

Acknowledging the further financial losses, and additional burden this will likely impose on Bahamian taxpayers, Mr Turnquest said the Government had provided the national flag carrier with some $6m during August when the airline was totally shutdown amid the travel suspension designed to contain the COVID-19 outbreak.

And he lamented that Bahamasair had also lost one of its revenue rich (by comparison) periods that is typically the July-August period of vacations and back-so-school. "We're normally awash with cash in July and August; that is normally the boom time," he added.

"That's summer travel. People want to give their family a little vacation before they go back to school. We missed all that business. Nobody wants to travel until we get the COVID-19 situation under control, the world and The Bahamas included."

Bahamasair was due to receive a $19m subsidy during the 2020-2021 fiscal year, but Mr Turnquest confirmed that this will significantly increase due to the loss of revenue and business from the COVID-19 restrictions.

With the national flag carrier's operating costs estimated at $7m per month, he said of the greater subsidy ask: "I do have an idea, but it's not for me to tell you at this time. I have to provide it up the line. In wouldn't want that in the paper."

Anthony K Hamilton, president of the Bahamas Association of Air Transport Operators, told Tribune Business that the liability for Bahamasair's further losses following the resumption of inter-island travel last Wednesday, September 9, will again fall on long-suffering taxpayers.

"When you think about it, Bahamasair taking on just four passengers going out, just imagine how much is lost to introduce that flight. Who's paying for it? The taxpayers," he said, revealing that "not even a handful" of privately-owned domestic airlines and operators have resumed flying because the low load factors meant it was just not financially viable.

"There's minimal traffic because of the COVID-19 restrictions. You have the quarantine period and fee associated with securing the negative COVID-19 PCR test result," Mr Hamilton added. "That's the sentiment that's emanating right now. Nothing has changed.

"As a matter of fact, some operators have not even moved. It's a miniscule amount that are seeking to execute; not even a handful. We will see how things go by later this week, but I suppose everybody is going to scale back a bit."

Mr Hamilton disclosed that the decisions by Baha Mar and Sandals Royal Bahamian to delay their re-openings beyond the October 15 date recommended by the Ministry of Tourism for the hotel industry's return would negatively impact domestic aviation operators by causing the major international airlines to reduce airlift/seats into Nassau.

"The major hotels not opening any time soon is going to impact in terms of bulk traffic," he explained. "The domestic operators operate as a feeder system for the bulk traffic. That's a big component we rely upon for traffic to move. Once the large resorts are closed we have to rely on domestic traffic, and domestic traffic is thin because they don't have cash flow."

Mr Hamilton echoed Mr Turnquest in acknowledging that airlift was "absolutely necessary" for the economic and social viability of the Family Islands, but said this will "take some time to rebuild" due to the fall-out from COVID-19.

"We need to take a good hard look at the industry," he continued. "When we think of inter-island relationships, we need a very strong programme of interconnectivity for the Family Islands. A very strong infrastructure needs to be in place."

One airline that resumed commercial operations on September 9 was Western Air, albeit with the same lowered expectations for load factors and business volumes due to COVID-19.

Sherrexcia "Rexy" Rolle, the company's vice-president of operations and general counsel, told Tribune Business in a statement: "We are flying daily between our domestic locations - Marsh Harbour, Freeport, San Andros, Congo Town, Bimini, Cat Island, Georgetown and Nassau.

"The travel requirements, mainly the negative COVID-19 PCR test to depart Nassau and the 14-day quarantine upon arrival for all locations, has deterred or made it difficult for many to travel. The usual business traveller whose normal travel pattern is same-day excursions or two to three-day trips is reluctant to fly because they would not be permitted to conduct business upon their arrival even with a negative COVID-19 test.

"We have received a number of calls pertaining to that. Nevertheless, there are passengers on board. It's not the usual volume, and we don't expect it to be with the current requirements. We trust that as things progress and there is more accessibility to the PCR test, more travel will proceed, or the requirements are adjusted to better suit domestic travel while balancing both health and economics."

Ms Rolle said Western Air was following all COVID-19 cleaning and health and safety protocols. She added: "Prior to the late July (COVID) resurgence, domestic travel was able to operate while cases were indeed contained without the need of PCR tests to depart Nassau.

"Airlines are one of the safest forms of travel due to the high efficiency air filtration and ventilation systems that allows fresh air to circulate within the cabin. Western Air jet aircrafts, similar to those operated by other international carriers, are equipped with the high efficiency filtration and ventilation systems that significantly increases the quality of air in the cabin, which makes it less likely to transfer communicable diseases.

"Aircrafts, like the ones Western Air operates, were equipped with these air systems prior to the pandemic because aircraft manufacturers would have planned this to combat the threats of tuberculosis, SARS and other communicable diseases in the past. And while everyone must still travel and interact with an abundance of caution, it is important for the flying public to know this."

Faron Sawyer, Cherokee Air's chief executive, told Tribune Business the company had resumed commercial flights "on a smaller scale" since the COVID-19 inter-island travel restrictions were lifted.

"The only thing that is making business a little slow is that people have to quarantine wherever it is they have to go and they are not wanting to travel because of it," he added.

Comments

Economist 1 month ago

It should be grounded permanently.

The Bahamian public would be $50+ million better off each year.

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tetelestai 1 month ago

That's your gross figure - assuming you are right. Now, net that off against everyone at Bahamasair who would lose thier jobs. Most would go to social services and the government would still have to subsidize the private firms to fly non-competitive routes anyway. The savings arent as great as you seem to think.

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Lknowles 1 month ago

There are alot of people on the family island that needs to travel into Nassau but of the restrictions with the 14 day isolation alot cannot stay away that long and with the cost of paying for your own covid test I think it should be free the government is trying all means to make money from poor bahamians after they fucked up millions of dollars

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joeblow 1 month ago

... before we have a conversation about grounding them can we stop paying them first?

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tetelestai 1 month ago

Yes, we can have a conversation - no paying them is the height of abject stupidity. Conversation completed.

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Economist 1 month ago

The cost to Government is around $100,000 per employee per year.

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alexferguson 1 month ago

Not everything that is in the media financially is true bahamasair is an essential service

No other airline flies between between: Crooked Island and acklins Mayguana & Inagua San Salvador

imagine your family or grandmother/father or extended family down on these islands and need to get to the doctor bahamasair is the only option consider this :

Or the fact that the flights are combined because those twin islands are sharing the doctor

Or the fact that we love to travel to the us no one wonders how the currency gets into the country this is done by bahamasair. i'm not defending because i was an employee but, rather i too was outside looking in when i got in my eyes open on how the government really treats the airline many of the staff were cut from Jan 2020 im telling from family who showed pay slips.

who will get the person stranded in hurricanes ? who will repatriated the illegal immigrants ? who will fly to the remote islands?

But Bahamasair can be improved with less government influence we cant be like jamaica get rid of the national airline like air jamaica hundreds lost jobs and the government of jamaica paying way more now to do the same routes via Caribbean Airlines think on that!!!!!!!!

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Economist 1 month ago

Many of the charter air line provided services after the hurricanes and there are other airlines like Pinapple Air, Cat Island Air and Western Air who can fill the gap. They will, no doubt, employ some of the Bahamasair staff as their businesses expand. Unlike Bahamasair they pay taxes and have not run up over $700-750 million of debt which we the taxpayer are paying interest so it probably costs more than $100,000 per employee now.

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alexferguson 1 month ago

Understood, consider the fact that the government lie to us bout these figures

Firstly, Bahamasair closes this now who will central bank will rely on who to transport our money. That’s a subsidy

Airlines work like this when miami is making money that fills the gap for when Eleuthera isn’t , Cat island air closed down 2012 same for Sky Bahamas 2019 trying to operated into islands that won’t turning a profit.

Airline flying into destination that are losses yet again subsidies

Secondly, airlines and crew go through a lot being a pilot myself I can tell you it’s a challenge getting into these remote islands no navigation at all, an the runways demolish the tires in a matter of weeks when tires are suppose to last for months tires price range from $300 to high as $14,000.

The government isn’t truthful did you know that JetBlue Southwest & Delta gets a subsidy from the government? They are paid millions year over year for those empty seats im not asking I’m telling you I work in aviation government. Why not limit the time they can come an increase the time Bahamasair can go. No airline is allowed to go no destination that carriage airline fly in there country that is why they are successful. Time for the maths Aircraft fuel is measured in (6Ibs) Bahamasair will use 4200 Ibsvflight to miami The jet hold 120passengers

10,000 Ibs is taken total in case of emergency 4200 ibs used /6=700 gallons Fuel at 700 gal at $4.17 a gallon $2919 10000/6=1667gal at $4.17 is $6950 bearing in mind only 4200 out of the 10,000 is used. An average ticket is 260 plus in the summer an flights are full normally all 93 days of summer.

300(average ticket) *120(number of passenger the plane holds ) $36,000 with 4 flights daily to miami and 4 flight from total of 8 $36,000 x8=$288,000 daily an multiplying the 93 days of summer $26,784,000 this is miami route alone not factoring in Fort Lauderdale, Orlando, West palm or the islands reggattas which uses a smaller ATR/Dash8 aircraft’s that burn less and don’t have to pay that heavy airport fees. Let’s not forget the overweight fees &change of tickets fee ect.

Bahamasair looses 7.5million monthly since COVID ok so that would mean in 12 months Bahamasair makes $84million an staff is said to be the second highest bill. So 7 million divide the 631 staff would mean each employee makes $11,000 monthly does that sound logical ?..

If Bahamasair is such a bother why did the government move Bahamasair office from the owned building on coral harbor road to Blake road in the building own/ shares by the pm paying some $40,000 monthly

If is such a issue why Bahamasair never branch out to Atlanta and Canada example Westjet, air Canada , Sunwing, Canadian north all come here to the bahamas from the same places every day some twice a day there is a market there but yet they won’t fly because it a way to show revenue that would mean less money subsidies an more explanations

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alexferguson 1 month ago

If it’s such a loss why they spend millions on 2 of the jets that could have been replace year ago..?

Why buy Bahamasair planes at all when leasing is an option buy leasing allows financial transparency.?

Leasing also mean the airline will be equip with the latest planes at lower rates

Why sell the dash8 which an airline just put 3 of them into service why we didn’t lease them out to keep the money coming into the country..?

When the ATR aircraft’s (5) were purchased maintenance parts were free for 5 years so why still need 24 million in subsidies that should have gone down for at least 5 years.

Why they can’t bring in someone from the U.S / Canada to give an advisory with transparency an less governmental influence.

Bahamasair is a sweet easy way to make money an blame it on daily operations it’s hard to do an audit on flight day after day, but I can tell you when I was there an the auditors are coming from the U.S all kind of new things that were needed would appear weeks prior to there arrival.

So all I show you think on that Bahamasair is an was never an issue the slackness is Bahamasair makes money why you think they never sold it. just how government cars be on the road on the weekends thing tuff but they get free car an gas that’s my 5cents

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