The Tribune

BY NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

A VETERAN airline chief yesterday voiced fears that key Family Islands may suffer an aviation and tourism “bloodbath” over new and increased airport fees that threaten to undermine competitiveness and “value for money”.

Stuart Hanley, founder and chief executive of Aztec Airways, which has supplied airlift to The Bahamas for 25 years, told Tribune Business that the North Eleuthera, Governor’s Harbour and Georgetown Exuma airport levies proposed by Island Airport Development Partners (IADP), their new private sector operator, will further “whittle away” at the country’s tourism “lifeblood”.

Noting that The Bahamas is already a high-cost destination, he said he had calculated that the new fees mean Bahamian residents - as well as tourists - will have to pay an increased $116.60 per head to leave Eleuthera and Exuma when travelling to international destinations.

The “danger”, Mr Hanley warned, is that price-sensitive visitors drop The Bahamas and its Family Islands by switching to rival Caribbean and Latin American destinations that are cheaper to access as he pointed to the possibility that Cuba’s tourism market - long closed and restricted for Americans - may soon open up due to the Trump administration’s pressure campaign.

The Aztec Airways chief said the same fee structure, already implemented by Island Airport Development Partners in Bimini, has “virtually destroyed” air traffic into that island, which he asserted is down by 35 percent year-over-year. Voicing concern that Eleuthera and Exuma will suffer the same fate if these charges are imposed from New Year’s Day 2027, as planned, he added that it appears to be “a steam roller and there’s no stopping it”.

Island Airport Development Partners, in a statement issued to Tribune Business yesterday, promised that the collective $132m upgrades to the three airports will help grow “airlift and connectivity” across The Bahamas by providing modern, efficient ports of entry that are due for completion next year. Documents seen by this newspaper state it has a 50-year design, build, finance, operate, maintain concessions contract for the three airports.

Mike Schutt, co-head of the project structuring and investment group at Plenary Americas, the lead developer for Island Airport Development Partners and also a director of the latter, said: “IADP is proud of its strong partnership with the Airport Authority as we work together to advance the development of new, world class airport facilities at Exuma, North Eleuthera and Governor’s Harbour.

“These modern facilities will provide safe, efficient and enjoyable travel experiences for Bahamians and visitors. We are excited to see the rapid, visible progress taking place at all three airports and look forward to welcoming passengers and airlines to the new terminals in 2027, while continuing to grow airlift and connectivity across The Bahamas.”

However, Plenary and Island Airport Development Partners did not respond to Tribune Business questions on how the proposed fees were calculated and determined, and whether there had been any consultation with aviation, tourism and other stakeholders prior to their release to the industry. They also did not answer whether any benchmarking and other studies were done to ensure the airport fees are competitive against rival destinations and will not make travel cost prohibitive.

This newspaper previously calculated that the new passenger facility and processing fees of $51 and $15 - totalling a combined $66 - when added to the existing $29 per head departure tax, $9 security fee and $1 passenger levy that are paid separately paid to the Government mean that persons leaving Exuma and Eleuthera for international destinations will directly pay $115 for the privilege to do do.

The passenger facility and processing fees paid by domestic travellers are pegged at $25.50 and $7.50 for a total $33 and, when added to what they already pay to the Government (including a $7, rather than $9, security fee, the total works out to $70.

Island Airport Development Partners is introducing these fees, as well as revised landing, terminal and aircraft parking fees for all types of aviation, as the means to recover its outlay on the three airports’ new terminals, fire crash rescue facilities and enhanced runways plus earn a return on its investment. It is following a tried and tested global model, also used for Lynden Pindling International Airport’s $409.5m transformation, where the user/traveller pays for the improved facility and services.

However, Mr Hanley and others are challenging whether the improvements need to be as extensive as Island Airport Development Partners’ $80m Bimini upgrades. They are arguing that less grand, and costly, projects will deliver the required terminal and runway upgrades without such high fees needing to be imposed in airlines and passengers to pay for it - particularly since tourists travel for the destination and its experiences - not the airport.

Blaming Island Airport Development Partners’ fees for Bimini’s aviation market “drying up so badly” that Aztec is mulling whether to cease service to the island, Mr Hanley said he had been unaware of the proposed Eleuthera and Exuma airport charges until he received the charges schedule from a fellow operator. He added that airport passenger facility charges are normally set at around $3-$8 per head, not $51.

“The fees they are talking about are even higher - $116.60 to leave The Bahamas with these proposed fees. It’s $90 to leave Bimini,” he told Tribune Business. “You’ve come here for your vacation, paid $800 for a room and spent too much money for an island where the power is off half the time. Then you get on your flight to leave, and get hit up for $117 at the end. What makes you think they will come back? I wouldn’t come back.

“The Bahamas has to compete in a world market. The Dominican Republic is a nice place to go to, Jamaica is a nice place to go to, Mexico is a nice place to go to, Turks & Caicos is a nice place to go to, and the water is just as blue. It’s just as blue. Moves like this are going to take my $400 ticket and push it over $500.”

Noting that Aztec Airways has “made a big commitment to The Bahamas” with the investment in its Fort Lauderdale private terminal, from where it serves 11 Family Island airport destinations with scheduled flights including all three airports being targeted for the new and increased fees, Mr Hanley added: “We are twice a day to Eleuthera.

“People complain about the ticket prices now, but if you add $116 on to them who’s going to go? It’s not going to happen, and if you add VAT on top of these fees and taxes it’s a lot to ask visitors who come to your country. Tourism is the lifeblood of your country, but all they have to do is travel there once and not come back. This is the danger.”

Dr Kenneth Romer, the Bahamas’ director of aviation, previously told Tribune Business that the Government was conscious of Bahamian aviation industry concerns over the proposed fees and seeking to strike the correct balance between travel “affordability” and making the three airports commercially viable for the long-term. He added that talks were ongoing with Island Airport Development Partners, and the proposed fees are under “review”.

However, Mr Hanley argued that The Bahamas appeared not to have “learned the lesson” from being forced to “back pedal” over last year’s new and increased boating/yachting fees following visitor and industry push back.

Asked what will happen if the planned airport fees are implemented unchanged, he replied: “I think there will be a bloodbath. I do. They are not learning the lesson. They raised the fees to extraordinary levels for yachts and boats. These boats then boycotted The Bahamas, said they are not getting value for money and they are not coming back. They made a big back pedal on those fees.

“You cannot charge someone almost $117 after their vacation. You just cannot do it. A minister said we’d [airlines and aviation operators] absorb it. We don’t. We’re in a business like any other. They can stay right on top of the ticket. They lost Silver Airways because it charged too low a ticket price to sustain itself. Other airlines have dropped out because the fees are too much….

“I don’t get to keep any of that money. With the old fees and taxes, they were 30 percent of the ticket price. Now it’s going to be a lot more than that. It just boggles the mind. The proposed fees are so out of line. They are not even real. It’s ridiculous.”

Describing The Bahamas as Aztec Airways’ “bread and butter,” Mr Hanley told Tribune Business the carrier may now have to seek out and explore alternative destinations and routes outside this nation to remain commercially viable.

“It’s one thing to add a travel tax, but then there’s landing fees, terminal fees and parking fees,” he added of the planned Eleuthera and Exuma charges. “For me to land there just to use the terminal it’s $130. If I have a flight of just two to three passengers, I’m way upside down. Way upside down and I cannot cancel those flights.”

Mr Hanley conceded that “traditional landing fees in The Bahamas” have been around $8 in the Family Islands with no parking fees. Aviation industry sources, speaking on condition of anonymity, said there was justification for Island Airport Development Partners to raise the landing and other aircraft-specific fees to levels more in line with Nassau’s, as these have lagged below the cost of services provided. The biggest impact, they added, is on the passenger-specific fees.

The Aztec chief, though, branded the $220 overnight parking fee proposed by the private sector consortium as “a tall order” should one of his nine-seater aircraft break down and be unable to return to Fort Lauderdale. Branding airports as “necessary infrastructure”, he argued that they should not be profit centres but cost-recovery vehicles that support local communities and destinations rather than private developers.

Revealing that he has previously “got into it” with Island Airport Development Partners over Bimini’s fees and charges, Mr Hanley argued that island stands as an example of what could happen to Eleuthera and Exuma. “They virtually destroyed the air traffic into Bimini, and the tourism trade, single-handedly,” he blasted.

“The numbers don’t lie. The air landings in Bimini have reduced by 35 percent compared to the previous year. It’s ridiculous. They went through the season just dead in Bimini. No one wants to pay $800 a ticket. Private aircraft are not going to Bimini. People used to fly to Bimini for lunch, get a conch salad and pay a parking fee. Now, it’s easy to run into $800 in fees and they are not coming for conch salad. That was the end of that activity.

“I’ve all but stopped my flights into Bimini and am not going back,” Mr Hanley added. “We serve 11 destinations in The Bahamas and, really, Bimini has dried up so badly we are really considering stopping service into Bimini. I got into it with them over Bimini. You are charging me these fees: What do I get for these fees?”

The Aztec founder compared Bimini’s fees to the $20 per landing that the carrier is charged in Fort Lauderdale, where it is provided with fire crash rescue facilities, 24-hour instrument approach capabilities and other services not offered on the Bahamian island.

Mr Hanley said carriers have to pay for the Bimini airport’s night lights to be turned on, and asserted: “There’s no value return for the fees they are charging. If you are charging me a fee, give me something... Bimini I serve two times’ a week and flights are barely full. Those flights do not have anyone on them. The cost of the facility and terminal in Bimini is way off the top.”

Reiterating his concerns for Eleuthera and Exuma, Mr Hanley told this newspaper: “This could be a bloodbath down there. I hope not. I hope cooler heads prevail but I doubt it. I don’t think there will be any stopping this. I can get on cruise ships for a week for $300 and everything is included. They have to understand this is a competitive market out there for the tourist dollar, and they are kind of whittling away its value to where there’s no value for money.

“This whole relationship has to be revisited, but I think it’s like a steam roller and there’s no stopping it. It’s unfortunate. I have to look at other considerations to generate revenue, other routes to fly that do not involve the Family Islands.

“Something is about to happen in Cuba. Nobody knows what that is, but if that happens everyone will want to go to Cuba. You can go to Cuba for half of what you spend in The Bahamas, and when you leave The Bahamas and get an extra kick for $117, where would you travel?”

The Island Airport Development Partners (IADP) consortium also features Phoenix Infrastructure, a US infrastructure advisory and investment firm with offices in Washington D.C and New York, and Avports, an airport and fixed-base FBO operator.