The Tribune

BY NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

TOURISM executives say they have yet to receive complaints over retroactive triple-digit fee hikes facing private aviation but urged regulators to consider the “bigger picture” and not “ruin The Bahamas’ image”.

Emanuel Alexiou, the Bahama Out Island Promotion Board's president, told Tribune Business he and others are still seeking details on the Bahamas Air Navigation Services Authority (BANSA) invoices issued to private pilots and aircraft owners/operators with the tourism and hotel industry now in monitoring mode to catch any negative fall-out.

This newspaper reported earlier this week that the billings impose fee increases of between 294 percent to 679 percent on private aviation, which represents a lucrative, high-spending segment for Bahamian stopover tourism, while making these retroactive to May 1, 2021.

Mr Alexiou, who also owns the Abaco Beach Resort, told this newspaper he has no issue with The Bahamas and its regulators seeking to recover legitimately-incurred costs from providing air navigation services to users of this country’s sovereign air space. Rather, his difficulty lies with billings that are “excessive and back charging” as they could deter a tourism segment that is vital in spreading the sector’s benefits through the Family Islands from wanting to travel to The Bahamas.

“I haven’t heard any complaints from the hotel sector or tourism sector,” the Promotion Board chief told Tribune Business. “We’ve been trying to get to the bottom of it, but there hasn’t been a lot of noise; not from the tourism sector yet.

“What surprises me is that many of the same people have already supposedly paid the original fee, and now they are being back charged with the threat that their planes could be subjected to a lien or taken away.”

The retroactive billings stem from BANSA’s move to last year reform the fledgling air navigation services regime. The fees are split into two types - origin/destination charges, which are levied on planes that take-off and land in The Bahamas, and then overflight fees. The latter are levies paid almost entirely by international carriers that fly through, or transit, Bahamian air space without stopping in this nation.

BANSA is restructuring its air navigation services fee regime in a way that shifts the financial burden of these fees on to take-off/landing fees, and away from overflight fees. However, in doing this, BANSA is not reimbursing anyone who parted with the older, higher overflight fees and has now overpaid based on the reduced retroactive billing.

Instead, it will apply the over-payment as a credit against future billings. And anyone who previously paid the lower landing/take-off fees is, under the retroactive billings, now being charged a much greater amount for something they already paid.

Mr Alexiou, while asserting that he does “not bad mouth” BANSA for seeking to recover legitimately-incurred costs in providing services to the aviation industry, questioned why The Bahamas is levying fees that appear “kind of excessive and back charging”.

“They don’t think of the whole sector,” he told this newspaper. “They need to think of The Bahamas. We make our money from tourism. We don’t want to lose money. If they are recovering expenses, fine, but it’s unfair to go back and charge people back taxes.

“This is where the Ministry of Tourism should step in and say: ‘Look, you’re ruining the image of The Bahamas’. We should be thinking of the big picture. I don’t think anyone would object to paying a reasonable fee to cover our expenses for air traffic control, the tower or whatever it is. But we shouldn’t fleece them. Even if they have planes and home’s at Baker’s Bay, they shouldn’t be fleeced.”

The Out Island Promotion Board chief said visitors who own homes in The Bahamas are often the country’s “best tourist” because they are frequently flying in via private aviation or their own planes.

Mr Alexiou’s position echoes that of Michael Strachan, the Bahamas’ ambassador to the International Civil Aviation Organisation (ICAO), who told one of its meetings this week that the BANSA concerns mainly relate to retroactive charging and ensuring these are in line with the services provided.

“The issue surrounding BANSA is mainly due to retroactive charging and it being in line with services provided, which is a key function of [ICAO] Article 13 and 15. I think what’s needed is uniformity and more robust information being made available to airspace users to mitigate any issues,” he said.

Mr Strachan had previously told Tribune Business that - while this nation and all other countries have a sovereign right to charge users of their air space for the services they provide - these levies are supposed to be a cost recovery, not a for-profit, mechanism.

He added that himself and others have long argued that the retroactive billing of fees “shouldn’t be done” to avoid industry “pushback” and non-compliance, and renewed calls for greater “clarity and transparency” over how the charges are calculated and handled.

“Ultimately, in accordance with the ICAO annexes pertaining to cost recovery for services provided, the state via its appointed service providers and regulators review and submit the charges for notification to the global aviation community. These charges are not-a-for-profit mechanism to recover costs associated with operations, infrastructure and other expenses related to providing these services,” Mr Strachan told this newspaper.

“Ultimately, if there is a claim of overcharging, that can be resolved through an audit process which could identify any overages and also any undercharging if it has taken place, and there are recourses to rectify those.

“I know the retroactive fees also have been an issue but that’s something myself and others have been vocal about in that it shouldn’t be done, and that the benefits of the charges should match, and that will go a long way globally in the industry where there is less pushback and more support and compliance. There has to be more clarity and transparency on the way the charges are being billed and handled.”

However, Jim Parker, of Caribbean Flying Adventures, told Tribune Business that the BANSA fees represent “another nail in the coffin” with many private pilots now reluctant to join the 30-40 plane trip he is organising to Cape Santa Maria because they perceive The Bahamas as too expensive given this and other fee increases.

Recalling the week he spent recently at Oshkosh, a major private aviation trade show, Mr Parker said: “I talked to a lot of pilots. The Bahamas had a booth and was promoting private aviation to The Bahamas. This is just another nail in the coffin. This is just not going to work very well for anybody, including at all levels in The Bahamas.

“It’s going to discourage pilots from flying to The Bahamas. Everyone in the general aviation community knows about The Bahamas’ fee increases. I’m arranging a November trip of 30-40 planes, and most of the folks I talked to at Oshkosh said they don’t think they want to go because of the fee increases.

“It’s self-defeating. It’s unfortunate, once again, not understanding the importance of private aviation tourism to The Bahamas. They need to talk to Tourism and Customs. They need to get their understanding sorted out, and continue to encourage private aviation tourism.”

BANSA first sought to impose the same retroactive fee hikes on commercial aviation - both Bahamian and foreign airlines - last year, but seemingly backed-off following pushback and protest. Sherrexcia ‘Rexy’ Rolle, Western Air’s president, chief executive and general counsel, told Tribune Business at the time that the Authority was demanding the carrier now pay an extra $2.4m over and above what it has already paid in air navigation services fees.

Now, the same process appears to have caught up with - and been extended to - private aviation. The Bahamas has buffeted the general aviation industry with a series of fee and cost hikes since the first Davis administration took office in September 2021, including the raised Customs processing fees that were imposed in the 2024-2025 Budget.

Besides BANSA’s air navigation services charges, private aviation also has to pay Customs fees, Airport Authority charges and FBO landing and service fees. While single-engine piston aircraft are exempt from the latest BANSA fees and air navigation services charges, those pilots and owners of twin piston, turboprop and jet planes are not and are being asked to pay.

Also exempt are aircraft owned or chartered by the Bahamas government; those involved in search and rescue operations; planes belonging to the armed forces or governments of ICAO member states; and aircraft performing an emergency landing in The Bahamas.

Many in the aviation industry viewed BANSA’s fee shift as a move to appease US commercial airlines and cargo carriers, and the US Department of Transportation, both of which have complained that the level of fees that The Bahamas is charging is excessive compared to the actual services this country is providing to air space users.

This is because The Bahamas, in 2021, agreed a 10-year deal where the US Federal Aviation Administration (FAA) continue managing Bahamian air space above 6,000 feet. The FAA also agreed to waive the cost of air navigation services it was providing and accept a mere $80,000 fee per annum. As a result, the US and its airline industry is arguing that The Bahamas is providing little while also having few costs to cover.

However, the FAA deal was part of a wider strategy to give The Bahamas time to build up its resources, technical skills and capacity to the point where it could regain and take over management of its sovereign air space from both the US and Cuba. The Bahamas set its fees at the level necessary to generate the required financing, plus produce enough income to enable the Civil Aviation Authority of The Bahamas and other regulators to become self-sufficient and no longer need taxpayer support.