‘Losing home court’: Air taxes exceed ticket cost


Kerry Fountain

• Bahamas ‘failing to convert proximity to affordability’

• The Cove chief says situation ‘very short-sighted’

• Tourism giving Eleuthera fuel rebates to Delta


Tribune Business Editor


A senior tourism official yesterday said the Bahamas has failed to convert its US proximity into affordability with airline ticket taxes now exceeding the actual cost of a flight.

Kerry Fountain, the Bahamas Out Island Promotion Board’s executive director, questioned “what’s on the drawing board” to reduce the high access/airlift costs into this nation as he revealed that ticket taxes for his recent flight to Nassau from Fort Lauderdale were 13.4 percent higher than the actual ticket cost.

Taxes worth a combined $163.35 accounted for 53 percent of the total ticket price, and Mr Fountain told the Eleuthera Business Outlook conference: “I need to address this. I’ve heard it mentioned again yesterday on a sales call by some of the hotel partners, and that is the cost of getting to this island of Eleuthera. Some are paying $1,200 or whatever it is.

“The other day I was flying from Fort Lauderdale to Nassau. My ticket cost $144, but the taxes were $163.35. That’s more than the cost of the ticket. We always talk about, when we are writing a business plan for The Bahamas, about our proximity but what we have failed to do is translate or convert that proximity into affordability....

“The point of the matter is that because of the high cost of getting here the number one market for The Bahamas is Florida; Miami and Fort Lauderdale. You could jump on a Carnival cruise from Miami, Fort Lauderdale for $400. That’s almost equal to the cost of an airline ticket. Florida is our home court. We’ve given up that advantage. What are we doing? What is on the drawing board to reduce the high cost of ticket taxes to The Bahamas.”

Carlton Russell, the former senior Atlantis executive who is now The Cove’s managing director, said it was “very short-sighted” for The Bahamas to be at the mercy of high ticket taxes that raise costs to access the destination and potentially price some visitors out of the market.

“Sixty percent of that airline ticket is taxes,” he said. “What would be the outcome if we reduced that tax by 50 percent? What would that do for our destination?” Contrasting the impact from one dollar spent by a visitor to that taken in taxes, Mr Russell said: “The dollar that comes in circulates 11 times’ in the community before it goes back out.

“So does it make sense to get that dollar in taxes at the front end, which is one dollar, or that same dollar after it has circulated through the community 11 times? We need to look at tourism in a different state” of mind.

Dr Kenneth Romer, the Ministry of Tourism, Investments and Aviation’s deputy director-general, and acting director of aviation, told a panel discussion at the same conference that officials are “constantly advocating” for commercial airlines to reduce ticket prices and travel costs to The Bahamas.

However, he also pointed out that ticket prices are set by market forces of supply and demand, and The Bahamas remains a high-end destination that wealthy travellers are prepared to pay a premium to visit. “Airlines are businesses, and businesses are always driven by profit. Businesses are driven by demand,” Dr Romer replied.

“The Bahamas is, first of all, an expensive destination. You cannot compare The Bahamas to Mexico and others. Those persons who come to The Bahamas generally have the means to pay for the tickets. Airlines view us as a high-end, luxury destination.

“We are constantly advocating for our airlines to reduce the cost of travel. You’re going to have a certain amount of seats that are going to be affordable, but the majority of our seats are going to attract higher rates because we are almost a luxury, high-end destination. Whether or not you buy a ticket somebody’s going to buy it because demand exists for the destination. They’re going to drive demand to drive their profits.”

Mr Romer said that, notwithstanding high ticket prices, airlines were still arriving in Nassau “full” and added: “If they’re coming here (Eleuthera) or Nassau they have to book two weeks in advance.” However, he also disclosed the “rebate” or fuel subsidy that the Ministry of Tourism is providing to Delta Airlines to incentivise it to fly into North Eleuthera from its Atlanta hub.

This rebate is the equivalent of the difference between North Eleuthera’s fuel prices and those in Nassau, with the carrier receiving payment every quarter. “You might not know this, but we pay the difference for the fuel between the price of what is being offered in this island with the price of fuel being offered in Nassau. We incentivise for Delta to come to North Eleuthera,” Dr Romer revealed.

“This thing is too expensive to come. We offset the price of fuel in Nassau with what is being offered coming into Eleuthera. Tourism provides support to give them a rebate, give them back a rebate every quarter. We have to give a rebate to Delta alone just to continue bringing passengers into Eleuthera.”

Mr Fountain, giving a further insight into how The Bahamas subsidises airlift into the Family Islands, explained how the Bahamas Out Island Promotion Board had used levies from member hotels to finance a minimum revenue guarantee deal that enticed Delta to provide service to Exuma.

Revealing that this had cost $6m-$7m over eight years, he added that the Promotion Board was currently unable to offer such inducements for airlift to Eleuthera because there insufficient members on the island to finance it. “If I don’t have any members I cannot pay for any minimum revenue guarantee. That’s the number one benefit: Getting more people here, and getting them here more efficiently and affordably....

“We cannot just solely rely on government. Everybody has got to have skin in the game, and skin in the game comes with ka-ching.”


ThisIsOurs 7 months, 2 weeks ago

"Kenneth Romer, the Ministry of Tourism, Investments and Aviation’s deputy director-general, and acting director of aviation, told a panel discussion at the same conference that officials are “constantly advocating” for commercial airlines to reduce ticket prices and travel costs to The Bahamas."

Really? High taxes make perfect sense to me with the airlines complaining that the overflight fees charged by The Bahamas are exorbitant. The arbitration exercise conducted to examine the fees also found that the fees were exorbitant and asked the question, how yall come up with them? Anyway since yall is a soverign country you have the right to charge whatever you want.

So the Bahamas govt charge the airlines fees that everyone agrees are exorbitant, then according to this article, the govt goes back to airlines and ask them if they could lower ticket prices please? Who doing the thinking?


moncurcool 7 months, 2 weeks ago

This shows the ineptitude of people in leadership. This man has a high level position in Tourism, and he does not even speak to the issue of the high taxes that make ticket prices high.

Go figure.


observer2 7 months, 2 weeks ago

My rule of thumb was to double the cost to import anything into the Bahamas.

This is caused by governments strangle hold on electricity/BPL, imports/Arawak ports, fuel taxes/Focal/Shell, Vat/duties, an archaic customs clearance system and a regressive tax system which taxes physical imports rather than income, dividends and payrolls.

Add to this corruption and bribes you need to pay at every step in the process, zero transparency in government procurement, and monopolies and cartels in all core activity from lousy Canadian banks to foods stores importing inferior quality foods from south east Asia.

Then add to this zero investment in new schools and education versus billions going into hotels and gated communities for foreigners.

Now I add 130% to anything I import and as a Bahamian I try not to live in the country due to crime.


observer2 7 months, 2 weeks ago

Also we don’t grow, produce or manufacture anything in the Bahamas not even chicken or chicken eggs,

Everything is imported including 50,000 work permits to do every single job because we are either to dumb, lazy, ignorant or uneducated to do anything.

Every business I talk to uses imported labor.

Then everyone wonders why taxes on a plane ticket is higher than fare.

Stop complaining we lucky we really close to Miami otherwise this would be Haiti.


ThisIsOurs 7 months, 2 weeks ago

Our proximity is literally everything.


ThisIsOurs 7 months, 2 weeks ago

Im also really puzzled by the new BAMSI egg initiative. At first I thought they said they would use existing farmers, but in the last story with comments disabled from break (weird), they talked about how much eggs theyd produce at BAMSI and giving opportunities to young people etc etc.... sounds like they going down another road with the govt trying to run a business in direct conpetition with citizens who actually know what they doing


ohdrap4 7 months, 2 weeks ago

Remember a few weeks ago when lettuce was selling for 15 dollars. Bamsi was selling lettuce at 50 cents per head. Now that it is cheaper I see no bamsi lettuce anymore.

They only produce once like avocado and green beans a few years ago.

the egg initiave is just to give contract to builders. the farmers will be fleeced and they uy from the farmers and sell to the food store t double the price.


trueBahamian 7 months, 2 weeks ago

I don't get the argument that the Bahamas is a high end destination therefore people coming here are prepared to pay a premium. Sounds quite idiotic to me. I need him to explain what makes this a high end (luxury) destination. We have nice beaches, yes. But, so do a lot of places around the world. To say something like that suggests to me he doesn't travel much or understand the concept of luxury. Tell me, besides beaches, what do we have that outshines most places globally. We don't even respeft.our history to preserve our historical sites. Our culture goes way beyond Junkanoo and conch salad people, but how.much of it does a tourist really see or better yet.how much do we as Bahamians see?

There are lots of deficiencies in the tourism product. It seems that the entire Ministry of Tourism hasn't figured that out yet.


ThisIsOurs 7 months, 2 weeks ago

They havent. Dont know if you recall when Joy Jibrilu was asked what they discovered during COVID in terms of preparing for reopening, her answer, ~we need to clean up the place. It was stunning. A year to think about how to restart, reposition and relaunch this product and all they had after their strategy meetings was "garbage". They could have paid the garbage man 100k to tell them that .


ThisIsOurs 7 months, 2 weeks ago

If they were smart what they would have launched Toby's product immediately then identify 100 other diverse initiatives and ask Bahamians to submit ideas to fill. Then again, the problem with revealing ideas in this country is that our leaders have brainwashed everyone into believing that anyone could come up with an idea, its so that when they steal them noone raises an eyebrow, because, it was just an idea, and you cant do it without our help anyway.


bobby2 7 months, 2 weeks ago

"High End Destination"??? Wow, take a walk through Nassau or visit Grand Bahamas. Most is borderline slum level & in very short order tourists are going to re-route themselves to much nicer & more economical holiday destinations.


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