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A top Bahamasair official and a government minister yesterday revealed that executives at the national flag carrier were looking to restock the airline's fleet with more cost-effective aircraft.
Recent reports in The Nassau Guardian revealed that Bahamasair is in deep financial trouble, and the government along with the carrier's board of directors is looking to cut costs at the airline.
Bahamasair has been able to save hundreds of thousands of dollars simply by putting its contract for insurance coverage for employees, vehicles and buildings out to competitive bid, part of a cost-cutting drive which saw the airline reduce its operating loss by some 67 percent for the year in the first six months of the fiscal year.
Chairman of Bahamasair, Valentine Grimes, said that the airline had saved some $500,000 on insurance for its fleet of airlines, buildings and other equipment alone in this manner.
Elsewhere "marginal" savings were achieved by doing the same for health insurance coverage for employees.
Asked why the airline had not seen fit to approach its insurance coverage in this way before, Grimes only responded that the current board of the airline is simply "very serious" about "reducing cost wherever possible."
"The more we accomplish the less of a financial burden we will be on the Bahamas government and the better the chances there are of us partnering with any entity," he added.
"We are more importantly beginning to make significant strides to put Bahamasair on a better financial footing."
His comments come after Prime Minister Perry Christie, during a recent speech to the University of the West Indies (UWI) in Trinidad and Tobago on The Bahamas' relations with CARICOM, said that he had "informally" discussed with Trinidad and Tobago's Prime Minister Kamla Persad-Bissessar the possibility of a partnership between Bahamasair and that country's national carrier, Caribbean Airlines, "to see how various synergies might be achieved for the benefit of all."
"For example, Bahamasair is now required to implement flights into the Bahamas from outside the region to serve our tourism sector. It may be possible for Caribbean Airlines and Bahamasair to cooperate in seeking to fulfill that demand. In addition, the two carriers may be able to fulfill the wish of many of the region to be able to traverse the region in a single day without having to pass through Miami," said Christie at the time.
Grimes said any further questions on this particular partnership would need to be directed back to the prime minister as he did not know "how far (Christie and Persad-Bissessar) would have gotten" in the talks.
Turning back to cutting costs, Grimes said that the company is trying to do a "better job of collecting our revenue" and sees more revenue opportunities ahead for Bahamasair coming out of its recent acquisition of a new aircraft.
Grimes said that the airline is seeing positive feedback from customers as a result of the additional redundancy that the new plane will allow to be built into its operations.
"Definitely we'll be able to do more charters, also in terms of our regular service we would then have a bit more equipment to have redundancy, so if we are having issues with particular airplanes we'll have another we can bring in to replace it , rather than canceling. We do anticipate our level of revenue and service will improve," said Grimes.
"By and large from response we are getting at public at large is that there is a feeling we are doing a better job at providing higher level of service, but it all depends at the end of the day on staff; they have to buy in on what you are doing and that it is important to them. It's not easy to change attitudes."
He emphasized that the airline will be focusing on expanding its international routes. Service into Freeport from six US cities - Memphis, Newark , Raleigh, Richmond, Baltimore, Birmingham, Cincinnati and Cleveland - will begin on May 1st with the goal of "jump starting" Grand Bahama tourism. The routes will be covered under an arrangement where Bahamasair will be subject to a seat guarantee by the Ministry of Tourism, by which it will be paid a certain amount per vacant seat to cover costs which will ensure it does not lose money on the venture.
"We are doing it under the auspices of the ministry of tourism. When you are starting routes its obviously more difficult to start them on a profitable basis and so yes you have some arrangements whereby it will not be done to the loss of Bahamasair."
Ultimately the airline has it sights on potentially providing service from not just the east coast, but also the west coast of the US, including cities such as San Francisco, Los Angeles and Seattle, said Grimes, but this would require additional equipment.
"We'd need larger planes and planes with first class seats," he explained.
In its statement regarding the outcome of its Article IV consultations in The Bahamas in late 2013, the International Monetary Fund (IMF) specifically mentioned the need for "envisaged reforms of state-owned enterprises, especially the Water and Sewage Corporation and Bahamasair (to) move forward to rein in subsidies and transfers" as part of a much-needed fiscal consolidation in The Bahamas.
Bahamasair has agreed to relaunch service to Treasure Cay, Abaco, following an outcry from resort properties in the area - choosing to outsource the service in order to save costs associated with the "expensive" route, according to its general manager.
The news was welcomed yesterday by General Manager of the Treasure Cay Resort and Marina Stephen Kappeler, but with caveats.
Henry Woods, general manager for Bahamasair, told Guardian Business that a team from the state-owned airline met with a representative of the local chamber of commerce and the local government administrator, along with representatives from Treasure Cay hotel properties a week and a half ago and reached a resolution on the situation, which had seen Bahamasair discontinue service from Nassau to Treasure Cay in September.
The service pull-out had led to an outcry from resort property representatives such as Kappeler, who yesterday indicated the airlift reduction had resulted in a "deafening" 20 percent drop in occupancy at the Treasure Cay Resort and Marina, whose residents number 900.
"They accepted that Bahamasair doesn't have sufficient equipment to provide the service, but we've secured sub-service with one of the other local carriers (Pineapple Air) on Mondays and Thursdays as requested by the Treasure Cay community, the hotels and the chamber of commerce," Woods told Guardian Business.
Those flights will start this Thursday at 3.30 p.m.
Woods explained that a shortage of equipment in addition to the "taxing" nature of the short flight between Marsh Harbour and Treasure Cay on a plane's engine and structure, which Bahamasair had offered via its Nassau to Abaco service, meant the airline "had to find ways" around continuing the service using its own planes.
Bahamasair also recently determined that servicing more international destinations would become a greater part of its strategic plan going forward, and having shifted out of Treasure Cay, went on to launch a new Nassau/Palm Beach service.
"It wasn't simply a matter of economics but also long-term planning," said Woods of the decision to end the direct service.
"Treasure cay didn't warrant a 50 seat Dash 8 going in there; the loads were very dismal."
Among the other resort properties that will benefit from the newly re-launched airlift, which will see Pineapple Air fly a 19-seater plane into Treasure Cay, are the Bahama Beach Club and the Pineapple Point Resort.
Kappeler said: "Bahamasair did find the answer of Mondays and Thursdays for time being, but the group did ask that they do some due diligence and they agreed to do so, to see if Mondays and Thursdays is when the highest demand was there historically.
"Traditionally vacation rentals are rented Saturday to Saturday so we proposed that they please look at Monday and Thursday, as we are certainly concerned that it is Saturday that is absolutely one of the busiest days for travel. They agreed to do it but they haven't got back to us."
Kappeler said that with a 900-strong resident community, 88 employees and as many as 600 people who work inside Treasure Cay servicing the privately owned villas that are entered into a rental pool, it is important that the government "recognize we need to do more to assist that traffic" flowing in and out of Abaco in a convenient and cost-effective fashion.
Michael Albury, former president of the Abaco Chamber of Commerce, said he supported Bahamasair "farming out" the service.
"(The Nassau/Marsh Harbour/Treasure Cay service) is losing proposition. They should definitely fly with a smaller airline. If there's not enough business for a big plane send a smaller one -that's the only way Bahamasair will stay in business."
The most recently released annual report for Bahamasair indicates that the airline suffered a rise in customer complaints to a "five year high" of 950 in the 2011/2012 fiscal year - a rise which Bahamasair said could be attributed "mostly" to the actions of the United States Customs and Border Patrol facilities at the airport.
Meanwhile, the airlines most recently released annual report also revealed that Bahamasair was on time 66 percent of the time during the year, with domestic services seeing on-time performance of around 75 percent, while international flights remained on schedule just 50 percent of the time.
The report, tabled in the House of Assembly yesterday, said that management is "sensitive" to the timing issue, and it was committed to addressing "controllable" delays.
The report is somewhat dated, and it is not clear where these figures stand today; however, it points to significant concerns regarding the service provided by the airline and its perception among the general traveling public which observers suggest continue to plague the airline today.
Providing a financial overview of the airline's performance for the year, Chief Financial Officer Eloise Rolle noted that Bahamasair's net loss of $26.6 million was $5 million, or 23.4 percent, more than the previous year.
Operating income increased by 1.9 percent to $67.45 million, as did passenger revenue, by $0.749 million, however, operating expenses of $93.96 million also saw an increase of 7.2 percent compared with the previous year.
The company also purchased two Boeing 737-500 jet aircraft for $1.2 million, while paying just under a million dollars in "retroactive salary" payments for three years, which were due under union contracts, noted Rolle.
Thirty-two percent of operating income was spent on covering the cost of fuel, compared with 29 percent in the previous year, with the price rising to an average of $3.56 per gallon, or 16 percent more than a year prior.
Bahamasair remained "highly dependent" on cash injections from the government, noted Rolle, receiving $23.47 million in funding of which $5 million was used to settle "inter-government receivables and payables".
Valentine Grimes, chairman of Bahamasair, has drawn much attention to the portion of costs borne by Bahamasair which relate to staffing. The 2011/2012 report indicates that staff costs rose to 43 percent of operating expenses in 2012, from 41 percent in 2011.
Aircraft fuel made up the second largest operating cost component.
The annual report indicates that Bahamasair transported 787,155 passengers in 2011/2012. Passenger revenue growth was focused on international routes, as performance in the domestic routes remained flat.
This international revenue growth came despite a fall in the international load factor from 71 percent to 64 percent in the year, indicating a 15,800 decline in international passenger numbers to 483,600.
Bahamasair has recently announced plans to focus on expanding its international services as a strategic goal.
Deputy Prime Minister Philip Brave Davis has expressed hope that Bahamasair is on the way to becoming "less of a burden to the Bahamian taxpayers", according to recent expense reports.
Speaking during the 2014/2015 budget debate in the House of Assembly, Davis revealed that the costly airline has made significant progress in addressing its financial shortcomings, including reducing its annual net loss and curbing the size of its government subsidy.
Bahamasair operated at a net loss of $26.6 million during the 2011/2012 fiscal year, while the projected loss for this fiscal year, which ends June 30, is $15.6 million, said Davis.
"Bahamasair's recent performance data clearly indicates that the airline is making progress towards becoming less of a burden to the Bahamian tax payers.
"The fact that the government has reduced Bahamasair's subsidy from $18.6 million this year to $15 million demonstrates confidence in the performance of the administration and operations of the airline," argued Davis.
However, Davis admitted that the airline was "still a long way from profitability", and called for discipline throughout the company, stating: "I must admonish all employees, from the managing director down, not to take this and the continued high level of government subsidies for granted."
According to Davis, Bahamasair's budgeted deficit for the 2014/2015 fiscal year is $16.6 million, which includes a recently-introduced business license fee of $1.2 million.
Davis further commented on the challenges still threatening the airline, specifically the issue of long-expired "industrial agreements between the company and four associated trade unions".
"These agreements have expired since 2009, and it is the government's desire that terms and conditions could be reached that would represent a viable future for the airline and its 641 employees. We are hoping that this would be accomplished before the end of this year," said Davis.
He also declared that customer complaints had also decreased considerably, showing a "6.7 percent decrease year over year", since 2011. The deputy prime minister attributed this decrease to an overhaul of the airline's baggage policies and procedures.
"We implemented new approaches to certain expenses," said Bahamasair Chairman Valentine Grimes, when asked by Guardian Business how the airline was able to reduce its operating costs.
"Rather than contracting out to service our airplanes, we've developed the expertise in-house to service these airplanes," stated Grimes, adding that the airline made efforts to do a better job "collecting revenue due to Bahamasair, such as those for overweight baggage, and a better job of providing competitive pricing of our fares".
"We still have other areas we can improve on," added Grimes.
On the subject of Bahamasair's expired industrial agreements, Grimes commented that a joint meeting with the board and management of Bahamasair, various trade unions and ministers of the government had recently been held. Grimes hoped that the negotiations would be completed by the end of the year.
More than 60,000 additional visitors are expected to touch down in Grand Bahama each year due to rising airlift from Bahamasair.
Bridgette King, director of sales at the Bahamas Tourism Office (BTO) in Florida told Guardian Business that four new mid-Atlantic gateways are on schedule to come online next month, translating into thousands of seats for Grand Bahama.
"Bahamasair is taking over Vision Airlines flights from Raleigh, Baltimore, Louisville and Richmond. On an annual basis, this could bring up to 62,400 seats into Grand Bahama. These flights translate into 1,200 seats per week from the four gateways," according to King.
"That service is going to be discontinued by Vision Airlines, so we at the Ministry of Tourism and Aviation worked along with Bahamasair to take it over so that there would be no disruption in service."
The flights originating out of Baltimore and Louisville arrive and depart on Thursdays and Sundays, while those flights out of Raleigh/Durham and Richmond arrive and depart on Fridays and Mondays.
King said her team is confident that this newest service will be successful as all of the major online travel agents and traditional tour operators are already selling seats.
Last month, BTO employees went on sales missions to each of those four gateways.
She further noted that quite a hefty sum was paid to promote these new flights through various media including online, digital, radio and television. However, she remained tight-lipped as to exactly how much was spent.
One of those promotional avenues undertaken by the BTO was the modification made to Bahamasair's website.
"We've worked with Bahamasair to refresh [the] Bahamasair.com website, as this is the call to action in our TV and online advertising in those markets. Once the customer clicks for details, they are linked to a special landing page to get information on the service, the hotel details and up to a $400 instant air credit," King explained.
She admits that tapping into these mid-Atlantic markets is new for Bahamasair, but feels that the national flag carrier and Grand Bahama will benefit tremendously from this newest service.
"These markets used to be very popular with Laker Airlines back in the 1990s and ever since then, we've noticed a major void and now with Bahamasair now going into these major cities, The Bahamas will once again be able to benefit."
The new routes come into effect on May 17 from Baltimore and May 18 from Richmond/Raleigh and Durham.
Three Bahamian women opened a new chapter in the history of the national flag carrier yesterday, becoming Bahamasair's first female captains in the traditionally male-dominated field.
Captains Frances Smith, Gwendolyn Ritchie and Gail Saunders follow in the footsteps of Patrice Clarke, the first female pilot hired by Bahamasair in 1984, nearly 11 years after it opened. Clarke, who was the only female professional pilot in the country at the time, went on to become the first female African-American airline captain of a major carrier in the United States (United Parcel Service).
Managing Director of Bahamasair Henry Woods told The Nassau Guardian that Smith, Ritchie and Saunders have a combined 56 years of experience in the industry and have each proved themselves over the years in their tenure, and through extensive training in the highly technical field.
"The achievement of these three women speaks volumes to the standards that are prevailing at Bahamasair because they stand out in what you would call a male-dominated field," Woods said during a press conference at Bahamasair's hangar facility at Lynden Pindling International Airport.
Women represent just under 10 percent of the 72 pilots employed by Bahamasair, according to Woods.
Director of Flight Operations Captain Paulo Cartwright said Bahamasair stands out among its regional and international counterparts in presenting three women captains at the same time, in light of the country's small population and the aviation community.
"Our history of women goes way back and we are proud of the achievement," Woods said.
"We are proud of what these young ladies have achieved and we are sure they are going to be role models and an inspiration for a lot of people out there - men and women - as an indication of what you can achieve with dedication, sacrifice and hard work."
When asked how it felt to make history Captain Saunders said: "We never thought of it as making history with our achievements when we marked out our goal to become captains. But it feels great."
Captain Smith said the sacrifice has been great for her and her colleagues as they have balanced an extremely competitive career with motherhood and family life. She said all of this was 'challenging', but made the achievement all the more special.
She added that it took a lot of sacrifice and determination to get where she is today and advised young people to "aim for the skies and you can achieve whatever you set your mind to".
Captain Ritchie added that their achievement is a testament to what others could achieve and hoped young Bahamian women would be more ambitious professionally, especially in male-dominant fields.
Woods said another two women, who are currently pilots, are expected to reach the rank of captain after receiving the necessary training in the next few years.
The national flag carrier will focus its efforts on international routes in 2014 as they have proven to be more "promising" than domestic routes.
This announcement came as Bahamasair revealed its plans to add a third jet to its fleet later this month. With the latest addition to the fleet, the airline's Managing Director Henry Woods told Guardian Business that Bahamasair will be in a position to increase its service into the Florida market and re-enter the charter market.
In addition to that, a focus will be placed on sports tourism initiatives. Woods expressed optimism about the upcoming fiscal year.
"We hope to significantly reduce losses by increasing revenue and reducing expenses. Now as far as profit is concerned, we are far from making a profit. Profit in the airline industry is not the norm, not many airlines make a profit," he said.
"We're looking to re-enter the international charter market. That served us very well in the 2006/2007 era and we have a great demand for charters now. The third jet will serve to increase our services into Florida, which is very promising for us at the moment. This new jet will give us better capability, with a couple more hundred more miles than our existing jets.
"We want to follow the trend that the Ministry of Tourism has created with sports tourism. We want to piggyback off that, not only internationally but also locally. Now, we have a very focused marketing effort on dealing with the sporting organizations to supplement our revenue base."
Just last month, Woodrow Wilson, the airline's senior manager for international sales, confirmed that by tapping into the charter business, Bahamasair could substantially increase the number of tourists traveling on the airline, especially those traveling in groups, therefore driving overall revenue. At the time, he also admitted that in the past the airline has been challenged to provide charter services due to a lack of equipment.
"Once we establish a charter rate, there's a revenue base for the carrier. In addition to that, group movements fill planes. That's revenue and it grows from there," Wilson said.
Bahamasair is expected to receive its newest jet on January 24.
It is no secret that the national flag carrier continues to be a financial strain on the government, to the tune of an estimated $25 million in subsidies on an annual basis. The airline has incurred more than $500 million in losses since its creation in 1973. However, in recent months the airline has begun to see a turnaround, recording its first set of profits in decades last year.
According to Bahamasair Chairman Valentine Grimes, in July the airline was able to transform a loss of some $500,000 in 2012 to an operating profit of $250,000 - a turnaround of some $750,000.
"We're very optimistic and our fiscal year is July 1 to June 30. I am preparing the minister's mid-term report, which ended December 31. I think we had a very good first half. So we are hoping that the second half will be just as good as the first half," Woods further revealed to Guardian Business.
"We are in dialogue about the future vision of Bahamasair, that takes into consideration labor, fleet and routes."
MIAMI, Florida- While they have no objection to Bahamasair being privatized, President of the Airport, Airline and Allied Workers Union (AAAWU) Nelerene Harding said the union will not compromise on the issue of job losses and pay cuts.
She also suggested that Bahamasair needs to "fly its way" out of its current problems by taking on more strategic routes.
"Offer early retirement packages that would allow people that want to leave to do so with dignity. Then after that, you can talk about restructuring. I don't think that any employee would want to work for an organization after their salaries have been cut. There is no way that you can afford to do that. It's not a sacrifice that we are willing to make in terms of job losses and pay cuts," she told Guardian Business.
"There is no way that you can talk about taking a cut in your pay to substantiate someone taking over, where it's going to be profitable to them and they will pay their employees probably better than what we are being paid."
"We make $76 million per annum in revenue. Even if you cut jobs, the airline is still not growing, so we have to look at it that way."
But in order for the airline to grow, Harding suggested the government needs to look for route structures outside of Florida, particularly as the multimillion-dollar Baha Mar project is set to open in December 2014.
"We have to fly ourselves out of this problem. With Baha Mar coming on stream, we think the government needs to assign someone from the Ministry of Tourism to be in charge of Bahamasair's marketing department, so that they are able to assist us with talks regarding route structures," Harding said.
"And on top of that, Bahamasair really doesn't need to be under the Ministry of Works, but it needs to be under the Ministry of Tourism. That's one of the key things that we see."
With privatization talks reportedly ongoing, Harding said the biggest concern for her union is job losses and pay cuts. She is calling on Prime Minister Perry Christie to meet with all unions representing the airline's employees to discuss the way forward.
"We have seen the letter that Mr. Henry Woods [the airline's managing director] would have written to the deputy prime minister. In the letter, he is recommending job cuts," she said.
"Even in conversation with the prime minister, it was mentioned that they wanted to grow this airline with a strategic partner. He said he is going to need the union's support and a buy-in to what it is that they want to do."
Woods has maintained that labor costs are Bahamasair's biggest burden. He said it's an issue the airline has sought to address.
Recently a senior flight attendant who had been working with the airline for 36 years was reportedly terminated, a move which Harding called an "unfair dismissal". As a result, employees are now into the fourth day of work to rule and will do so until the matter is resolved.
Harding, along with Jennifer Isaacs-Dotson, president of the National Congress of Trade Unions of The Bahamas (NCTUB), is looking to meet with the prime minister sometime today. If the NCTUB is not satisfied with the outcome of that meeting, Bahamasair employees could strike.
Complications experienced by a mother in transporting her unaccompanied ten-year-old American daughter from Florida have led Bahamasair to post vital policy information online.
Though seemingly basic, the absence of information in the public domain related to unaccompanied minors on the airline recently cost Texas resident Elaine Morley nearly $300 in added expenses.
"My daughter came from Houston to Ft. Lauderdale and she was supposed to come and meet me in Long Island," she told Guardian Business yesterday. "My nephew took her to the airport in Fort Lauderdale to board the flight. He was told that they couldn't do that because he wasn't a parent and he had to fill out a form and show ID and... when he was trying to get more information... one manager told him to get off the line or they would have him arrested.
"He was told that all he needed was his ID by one manager and another one told him he had to have a notarized letter. I was in Long Island and trying to call and get information."She, however, was unable to obtain any information, given this vital policy was not posted anywhere accessible to the public.
Lengthy calls to Bahamasair agents and customer service representatives also provided her with various answers and at the end of the day, hundreds of dollars in long distance and accommodation fees for her daughter.
While fully willing to comply with regulations, Morley finds it difficult to understand how the company's policy on unaccompanied minors could have gone so long without being published or fully communicated.
"Bahamasair was saying it's not our responsibility to educate our customers and they don't provide the information like other airlines do," she added. "I think Bahamasair needs an internal system so that they acquire information as to what is [Transportation Security Administration] policy and transcend it down to agents, so that customers can get it. "Her comments come as airlines gear up for the peak summer travel season. It's likely a time when many unaccompanied minors will be winging their way to their summer vacation spots. Having this information easily accessible may facilitate travel for worried parents, giving them confidence in the airline and, by extension, contributing to increasing revenue for the company.
Deputy General Manager Van Diah confirmed Morley's case to Guardian Business on Tuesday and said some changes had been made immediately.
"The airline does admit that posting this policy online would be helpful to the inquiring parent and as a result the policy will be posted online tomorrow [Wednesday]," he said. "Today [Tuesday], the policy disclosure has been limited to all sales points globally and at the airline's respective airports and reservations channels. The policy, procedures and respective fee disclosure via our website will result in a more informative approach to the passenger."
Guardian Business noted yesterday that true to his word, Bahamasair's website was updated to include the unaccompanied minor information.
He noted that the situation with Morley was not a training issue and that all agents, supervisors and front line managers are aware of the policy.
"The policy is reviewed and discussed at each quarterly front line customer training session and incorporated into our orientation process for new employees," Diah added. "The acceptance of unaccompanied minors is a daily routine function at all of our Florida offices."
Miami, Florida - Bahamasair, in conjunction with the Ministry of Tourism and The Bahamas Out Island Promotion Board, put together a splendid package for hundreds of Bahamians to enjoy a truly fantastic sports spectacle this past weekend.
The Government of The Bahamas is exploring cost-effective measures to reduce the cost of operating Bahamasair, the national flag carrier.
The airline's Board of Directors along with Government Ministers and other stakeholders got a first hand look at Bombardier Q400 NextGen turboprop aircraft. The Ministers viewed a presentation, participated in a visual walk-around and toured the cabin, Thursday, April 15
Nassau, Bahamas - The year's final segment of Cia Monet's Beauties @ Brunch will take place in Nassau on October 14th at the Sheraton Nassau Beach Resort. Cocktails are at 3pm and the show kicks off at 5pm. This 4th event in a 4-part series to celebrate 50 years of Women’s Suffrage Movement in the Bahamas and to Recognize and pay tribute to Great Women of The Bahamas! This time we honour the three female captains (Gail Saunders, Frances Smith, and Gwendolyn Ritchie) of Bahamasair.
By NEIL HARTNELL
Tribune Business Editor
Bahamasair still requires $6 million more in taxpayer subsidies than it received in the 2010-2011 Budget, it was revealed yesterday, with net losses for the half-year to end December 2010 having risen by over 2 per cent to $9.5 million.
Disclosing that losses for that six-month period had expanded from 2009's $9.3 million, Neko Grant, minister of public works and transport, said: "The Government approved a subvention of $16 million for Bahamasair for the 2010-2011 fiscal year, which was $6 million less than that requested at that time. The reforecast at the half-year point indicates no reduction in net loss, and Bahamasair's mid-term rep ...
FREEPORT, Grand Bahama -- Fred Cooper, Bahamasair Northern Director with responsibility for Grand Bahama shakes hands with Prime Minister the Rt. Hon. Hubert Ingraham at the Grand Bahama International Airport on Sunday, May 31, 2009.
Bahamasair Fun run-walk Mini Fair Under The Theme Strut For The Cure In Support Of Breast Cancer Awareness Month
Freeport, Grand Bahama - The staff of Bahamasair held a fun run-walk & mini fair under the theme "Strut for the cure" in support of breast cancer awareness month this past Saturday 20 October 2012.
The celebration for the country's newest professional baseball player continues, as the national flag carrier makes provisions for Bahamians to see the 'son of the soil', in action. Bahamasair has put together a special package, for locals, to watch Antoan Richardson and the Atlanta Braves take on the Florida Marlins. The three-game series will be played September 19, 20 and 21, at the Sun Life Stadium in Miami, Florida. The package being offered by the national flag carrier, includes airfare, car and hotel, for $279. Hotel taxes and other fees will apply.
Bahamasair executives are preparing a business plan expected to help trim the airline's fat further, confirmed the minister responsible for Bahamasair, with the company laying off 25 people in the last year.
"We can't go on the way we are," Minister of Public Works and Transport Neko Grant told Guardian Business yesterday. "The director is preparing a business plan that will outline the direction in which Bahamasair will go, but I will give more detail on that later.
"We are operating above industry standards [in terms of staff] and we are dealing with an aging fleet." The plan will likely outline a strategy as to how to deal with the problems going forward. In the 2011/2012 budget debate, Grant said Bahamasair's workforce continues to be reduced through attrition, with staff levels declining from 667 employees in April 2010 to 642 in April, 2011.
"Bearing in mind the significant impact that the global economic downturn has had on the aviation industry, the staff of Bahamasair along with union executives should be aware that the airline is struggling to survive," he added.
It comes as no surprise that Bahamasair has been a burden on the Public Treasury for years, reporting a loss of $23.6 million in the 2009/2010 fiscal year. The line has incurred an accumulated deficit of $473 million since it was incorporated in 1973, according to Bahamasair's annual report for the 2009/2010 fiscal year. In fact, it's been reported that Bahamasair has not had a profitable year since its beginning.
In the 2011/2012 budget, the government has increased Bahamasair's subsidy by $2.6 million to $18.6 million.
The subsidy increase will likely be used to keep operating expenses such as employee benefits current, as well as to keep the company's fleet of aircraft operating, said Bahamasair's chairman, J. Barrie Farrington in an earlier interview.
He added that Bahamasair's overtime and employee costs often consume 40 percent of the airline's revenue. Despite that, he said the airline has also seen a rise in revenue despite rising fuel costs because of increased bookings.
"We have seen some improvement in revenue and our loads have been better than anticipated," Farrington said then. "Unfortunately the cost of fuel is higher than last year but lower than what we have budgeted for. Given the general volatility of the oil markets, it's so hard to appreciate and determine what our exposure is going to be."
The government has allocated $20 million to Bahamasair in the upcoming fiscal year, Deputy Prime Minister Philip Brave Davis said yesterday.
"Bahamasair holdings continues to suffer from high labor costs and an aging fleet, escalating fuel costs and a commitment to unprofitable domestic [routes]," Davis said during his contribution to debate of the 2013/2014 budget in the House of Assembly.
"As with each budget for a number of years, this year, $20 million is budgeted to support Bahamasair's operations.
"The circumstance has been further compounded by competition by smaller local private carriers providing services to domestic routes and ongoing downward pressure on airfares in the Florida market due to competition by low fare international carriers."
Bahamasair continues to be a drain on the public purse. For years the government has been providing the national flag carrier millions of dollars in subventions.
During the 2012/2013 budget, Bahamasair requested $28 million in subvention funding but only $18.6 million was approved.
However, during the mid-year budget in March, Bahamasair received an additional $11.2 million.
At the time, Davis explained that the additional funding was needed to cover a shortfall of $5.5 million from the previous year's budget, a shortfall of $3.9 million for operations in the current fiscal year, along with personal emolument increases resulting from the recent grant of increments to Bahamasair's employees in accordance with the terms of agreements with the relevant unions.
Yesterday, Davis said the government is working to cut back on the money it allocates to Bahamasair.
"The board and management of Bahamasair are presently reviewing adjustments to the business model as a means of providing options which will result in providing greater service to the people," Davis said.
"As a substantial cost savings of the existing expensive approach, it is anticipated that Bahamasair, in very short order, will craft the new business model that will be for the benefit of all."
Davis also revealed that the government agreed to purchase a 120-seat aircraft to improve services and efficiency and to fill the gap that came after some of the international carriers scaled back their services between Florida and The Bahamas.
Water and Sewerage Corporation (WSC) will also receive a $20 million subvention, Davis said.
Like Bahamasair, WSC has been a consistent drain on the treasury.