Bahamasair Projected To Lose $18 Mil

In 2006 the airline lost $20 million, according to the minister.

"Bahamasair is budgeting for a loss of $16 million this coming fiscal year," he said.

"This represents a further decrease of $2 million, a trend in the right direction although not enough to decrease the drain on the public purse."

Minister McCartney noted that since the 9/11 terror attacks in the United States the airline industry has been under tremendous pressure, particularly with the increase in the cost of security and the increase in the cost of fuel.

"The airline has seen its annual fuel bill increase from $9 million in 2001 to $21 million in 2006," he said.

"[That is] an increase of over 130 percent with no matching increase in revenue. Added to this is the impact of the low-cost carriers, which, with no labour unions, have lower operating costs and are able to offer lower fares."

On the revenue side, Bahamasair has made much improvement, Mr. McCartney said.

In 2004 Bahamasair’s revenue stood at $66 million. Revenue rose to $73 million in 2005 and $77 million in 2006, he said.

"While the national flag carrier has experienced several years of revenue growth, the expenses have grown even more. Bahamasair’s projected revenue for the year ended June 30, 2007 is the same as for 2006 and the budgeted revenue for the year ended June 2008 is expected to show only minimal growth of $1 million."

According to Mr. McCartney, the airline’s management has a "Herculean" task in trying to reduce expenses.

"With the ageing aircraft fleet it has been more than a challenge, but notwithstanding this and the generous pay package awarded the unions they have committed to operating at an expense level roughly the same for 2007 and 2008."

Minister McCartney also reported that the government is still pursuing the introduction of a flight information region [FIR], an arrangement under which The Bahamas will be able to charge fees for flights which pass through the country’s territorial airspace.

"The importance of the FIR relates to the fact that it is a sovereign right of every government to control its airspace, and secondly, the establishment of the FIR has the potential to bring in many millions of dollars per year to fund the many aviation requirements of The Bahamas," he said.

"The government will make a decision on the establishment of FIR in due course."