• Private aviation levy switch to plane weight from passengers
• Bahamas warned that ‘setting bar too high’ can be deterrent
• Industry ‘rocking and rolling’ in 2022 with numbers ‘way up’
By NEIL HARTNELL
Tribune Business Editor
The private aviation industry yesterday hailed the Nassau Development Company’s (NAD) alterations to the new fees imposed on it as “a lot less onerous” compared to what was originally proposed.
Rick Gardner, director of CST Flight Services, which provides flight co-ordination and trip support services to the private aviation industry throughout the Caribbean and Latin America, told Tribune Business he “doesn’t see a major issue” with the Lynden Pindling International Airport (LPIA) operator levying weight-based fees on every international private aircraft landing.
The new levy, which took effect on Sunday, May 1, marks a major departure from NAD’s original plan of imposing a $28 per head charge on all international general aviation passengers arriving at LPIA. The latter fee, which was designed to raise $30m to finance airside infrastructure improvements, including paving surfaces and lighting, generated fears from Mr Gardner and others that it would drive away a market that has long been “laying golden eggs” for The Bahamas.
However, Jan Knowles, NAD’s vice-president of marketing and communications, confirmed to this newspaper that LPIA’s operator has changed the basis for calculating the fee from a per passenger charge to a weight-based aircraft landing levy in response to industry concerns.
“NAD’s initial proposal was to have a passenger-based fee but, after extensive and constructive collaboration with aviation stakeholders, we determined to put forward a weight-based fee. We were very appreciative of the feedback from aviation stakeholders who made the effort to fully participate in the process, and worked with NAD to inform the new fee which became effective Sunday, May 1, 2022,” she said in response to Tribune Business inquiries.
“The variation of aviation fees at LPIA is a prescribed process and it is very collaborative between the airport and aviation stakeholders...... The Airport Infrastructure Improvement Fee will assist NAD’s efforts to make the necessary infrastructural improvements that will primarily benefit the general aviation sector over time.”
The fee schedule unveiled by NAD splits the private aviation market in two between aircraft with piston engines and those with jet engines. There are nine different weight bands for the two categories, with the lightest planes - those weighing up to 3,000 pounds - paying $10 and $15 per landing, respectively, for piston and jet aircraft. Those planes weighing over 100,001 pounds will pay $140 if they have piston engines, and $360 if they are a jet, at the top-end.
This levy, which applies to international private aviation traffic only, is in addition to the existing landing charge incurred at LPIA. Mr Gardner, a Bahamian who is a member of The Bahamas Civil Aviation Council as well as a Bahamas Flying Ambassador, praised NAD’s changes as something that the private aviation market will likely accept and adjust to.
“I just know the impact of these fees, which are obviously a lot less onerous than what was to be put in place originally,” he told Tribune Business. “The Bahamas is a sovereign country, and the airport has a legitimate right to do what they need. Everyone is fine with it. I don’t find it as onerous as what they were originally proposing. I don’t see it as a major, huge issue.”
Mr Gardner likened the original fee proposal’s impact to raising the bar in the high jump event in track and field, pointing out that every time the bar was raised it deterred more persons from competing and trying to reach that height. In similar fashion, NAD’s per passenger-based fee could have deterred private aviation traffic from coming to New Providence and the wider Bahamas.
He explained that the private aviation industry has “two sides” and cannot be viewed “through the same lense”. The first he described as the corporate and private jets, which were used as “a means to an end” by their high net worth and company owners who could justify the high costs because of the urgency with which they needed to travel and attend meetings.
The second, Mr Gardner said, was those pilots and aircraft owners who use their planes “as the end”. He explained: “That same pilot is going to The Bahamas because of the adventure. They’re typically adventurers. The aircraft is an end; it’s not a means to an end. The challenge becomes that when you go out, you want to go where you feel wanted.
“I’ve heard this so many times when a particular airport or country puts in fees. They’re not stupid. They’ll say: ‘We’ll just fly to the Dominican Republic’. You’ll say: ‘Wait a minute. You’ll burn more in fuel to fly to the Dominican Republic.’ They will reply: ‘I know, but it’s the principle. If I go to your country, spend $350 per night on a room, spend money on a car rental and diving. Look at all the money I’ve put into your country, and you want another $50 out of me?’”
Mr Gardner said this was an illustration of just how fickle the private aviation market can be. With 70 percent of private aircraft piston engines, he added that most pilots also owned their own planes. And, with aircraft being an expensive asset to own, the sector is the total opposite of the volume-based cruise business as its participants are typically wealthy, higher spending and yielding, guests that can spread their impact across all islands.
“These guys, when their feet start touching the ground, pump money into the economy,” Mr Gardner said. “They don’t want to go to the RIU, they don’t want to go to Baha Mar. They want to go to Stella Maris in Long Island. Not only do they bring their own means of transportation, they have good disposable income....
“What you were going to lose was not the $28 fee, but the thousands of dollars they’re going to pump into the Bahamian economy because of the lodging, the food, the rental cars. Because they have the flexibility they can distribute it throughout the country instead of being concentrated in New Providence.
“My example is the high jump bar. The higher goes the bar, the fewer people are willing to jump. What The Bahamas has done wisely for many years is set the bar low. You need to look at the bigger picture.” Mr Gardner added that airports and their fees/financing strategies cannot be viewed in isolation, but as part of a wider plan when it comes to keeping this country “head and shoulders” above all others in private aviation.
He pointed to the private aircraft fees being charged on Norman’s Cay in the Exumas, where the inter-island and international landing fees were set at $162 and $1,261 respectively. To park a plane there currently costs $99 per night, Mr Gardner added.
The Bahamas’ private aviation traffic and business volumes have been “rocking and rolling” for 2022 to-date, he added, exceeding 2019 levels. “It’s been way up everywhere. It’s big over last year. It’s already over 2019,” Mr Gardner said.
However, he warned that the industry is becoming increasingly competitive with other Caribbean nations eager to grow their market share. The Dominican Republic, Turks & Caicos and Aruba all had a significant presence at the recent Florida-based private aviation conference and exhibition, Sun N’ Fun.
“The Bahamas has such a great position and done so much that those of us passionate about flying and The Bahamas, we’re going to do everything we can to attract and market and speak up if we feel something is not a good idea, and say: ‘This is why’,” Mr Gardner said.