The Tribune

• Tickets up 5-5.5% on average to offset fuel hikes

• Rise ‘inevitable’ as industry ‘rides out’ the storm

• Slim margins, but ‘genuine’ over staff retention

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian airlines have had to increase ticket prices by between 5-5.5 percent to offset soaring fuel costs as they battle to survive continuing COVID-19 and inflation-related challenges.

Anthony Hamilton, Southern Air’s director of administration, and president of the Bahamas Association of Air Transport Operators, told Tribune Business that domestic aviation operators were simply trying to “ride out” multiple pressures as the local and world economy emerged from the pandemic only to be confronted with new pressures.

He explained that the industry has little room for error in balancing competing forces, knowing it has to increase air fares to maintain viability but - at the same time - not passing too much of the aviation fuel spike on to hard-pressed consumers now grappling with the cost of living crisis in addition to COVID-19’s ongoing fall-out.

And, while carriers were conscious of minimising costs as much as possible due to “very slim margins”, Mr Hamilton said they were also seeking to avoid staff terminations given the potentially devastating effect this would have on families both in New Providence and the Family Islands.

Confirming that ticket prices have risen on average by between 5-5.5 percent to offset some of, but not all, the impact from rising fuel prices, he told this newspaper: “Everybody is trying to cope with it. It’s [the cost increase] inevitable, it’s here and persons are simply working through it. It’s an amazing thing.

“Right now we have a myriad of challenges and the operators are trying to survive in the midst of it. We have staff members depending on us to maintain their employment. There’s a genuine commitment on the part of operators to work through it. We have to eat some costs but, in a lot of cases, we have to work with staff members even if they have to be flexible with their work hours.

“There are other challenges with it. The families are being impacted very severely and, if you extend that to the Family Islands, a lot of folks have members there who are depending on them. We’ve had that issue. It’s a matter of doing the best we can to keep them engaged even if it’s flexi-time,” Mr Hamilton continued.

“There’s a great deal of uncertainty with it, but we’re looking at the bright end of it, and hope to ride it out. Fortunately, in this situation, with the staff a lot of them are very conscious of how vulnerable this industry is so they’re prepared to work with you.”

Confirming that air fare rises were inevitable amid an environment of escalating costs, the Southern Air chief added: “In some instance some operators had to resort to increasing ticket prices. Aviation the world over right now is experiencing its extra share of challenges.

“I would say it’s a minimal increase where we’re simply trying to offset costs because we have to pass that on to some degree, otherwise the operator won’t be there. It’s extremely difficult. By no stretch of the imagination is it a small thing. Prior to COVID-19 industry challenges existed, and then you couple that with fuel increases, because fuel is a major part of the cost to run an operation.

“It’s a day-to-day thing. We’re making adjustments to ensure we can remain in the system because the service we provide is vital to society at large to help the economy to get back. It’s better to stay in the game and fight than fail to stay in it. We’ve given consideration to what the market is able to carry at this point. We’re hoping that we can ride out of this some time soon. All eyes are watching. It’s very competitive and our margins are very slim.”

However, Bahamian aviation operators received some comfort at the weekend after the US eliminated the mandatory COVID test requirement for returning citizens and travellers to enter its borders, thereby ending one obstacle to travel and the free movement of people.

“Anything that would decrease challenges with regard to travel is a positive thing,” Mr Hamilton added. “There’s no question about that. If they are ensuring movement there are quite naturally benefits to be derived from that. Volume movement is a good thing for the industry.

“We hope we have a quick response to it, but that’s predicated on the financial ability of the customer base to afford travel. We’ve spoken a lot about pent-up demand, and the ability to engage and capitalise on this is important. What we have now is access, but affordability is another aspect in terms of them being able to capitalise on it. It’s all in the mix to stimulate things a bit, and we look forward to getting some positive results from it.”