Bahamasair still needs high govt subsidies

Tue, Jan 31st 2012, 08:55 AM

Despite the introduction of several cost saving measures that have 'substantially' reduced Bahamasair's operating costs, the national flag carrier will likely require the same amount of subsidies in the upcoming budget as it has in previous years, the airline's managing director Henry Woods revealed yesterday.
After criticism from the government last year, Bahamasair executives implemented measures including energy conservation measures to reduce electricity consumption; performing Dash 8 seat checks locally; limiting the use of aircraft auxillary power and using single-engine taxis, among other things.
While he did not quantify the amount that was saved as a result of those efforts, Minister of Public Works and Transport Neko Grant, who has responsibility for Bahamasair, said during his contribution to the budget debate in the House of Assembly last year the airline had cut costs substantially.
Similarly, Woods told The Nassau Guardian in June 2011 that he was 'very optimistic' that by 2012 the airline would be in a better financial position as a result of the measures.
However, the airline is still as dependent on the government now as it was then.
In the 2011/2012 budget, the government increased Bahamasair's subsidy by $2.6 million to $18.6 million.
Asked yesterday if the airline still requires that amount, Woods said, "I think so. Unfortunately, due to the increase in fuel, airport charges and other matters, it will be [needed]."
Additionally, Bahamasair has continued to face problems with its aircraft.
On Sunday, one of the engines of a Bahamasair Dash 8 plane flamed up, Woods said.
The plane, which was scheduled to fly from Freeport to New Providence had to be grounded for repairs, he said.
"We had a little flame out on the engine due to the excessive fuel. The fuel control unit malfunctioned and as a precaution we left the airplane behind in Freeport. They are going to replace the unit."
Despite the airline's problems, Woods said it is still faring well in the face of competition.
He said because of the airline's safety record, competitive price scale and improved service, Bahamasair has its loyal customers and is still able to attract new business.
In the 2009/2010 fiscal year, Bahamasair lost $23.6 million. Bahamasair has been a burden on the public treasury for years.
Up to last year, the airline had incurred an accumulated debt of $473 million since it was incorporated in 1973, according to Bahamasair's annual report for the 2009/2010 fiscal year. The 2010/2011 report has not yet been released.

 

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