Concern Over $100m Restructure Of Bahamasair’s Fleet

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Concern Over $100m Restructure Of Bahamasair’s Fleet

Unread post by bimjim » Tue Jul 07, 2015

http://www.tribune242.com/news/2015/jul ... ture-baha/

Private Airline Concern Over $100m Restructure Of Bahamasair’s Fleet
NEIL HARTNELL
Tuesday, July 7, 2015

Bahamasair’s $100 million purchase of a new aircraft fleet yesterday prompted one private carrier to again question the Government’s aviation industry strategy, given that the new planes appeared to be targeting his routes.

Captain Randy Butler, Sky Bahamas’ president and chief executive, expressed fears that the Government-owned airline would exploit the acquisition, and its annual $20 million taxpayer subsidy, to undercut his prices and provide unfair competition to the private sector.

And he also called for greater transparency over how the national flag carrier’s purchase of five ATR 600 planes will be financed, given that the burden is again likely to be borne by the Bahamian taxpayer via the Government.

Valentine Grimes, Bahamasair’s chairman, yesterday said the 70-seat planes will be used primarily on the Nassau/Freeport/Fort Lauderdale; Nassau/Marsh Harbour/West Palm Beach and Nassau/Exuma routes.

“They’re my routes,” Captain Butler responded, when informed of this by Tribune Business. “I can tell you what they’ve done so far. On Nassau to Exuma, they’ve changed their flights to the same time we do, after finding out our schedule worked better, and dropped their prices.”

He added that Bahamasair also dropped its prices for flights to Cat Island’s Rake N’ Scrape festival to “bottom out” levels that he suggested might have been below cost.

“Talking about Government in the sunshine; we’ve got to have transparency,” Captain Butler told Tribune Business. “Where’s it [the $100 million] coming from?”

The Sky Bahamas chief said there were numerous unanswered questions surrounding the Bahamasair fleet restructuring, such as what it planned to do with the ageing Dash-8 fleet - if it would “park up” the planes, or seek to sell them to recoup part of the $100 million ATR purchase price.

He added that Bahamasair would also have to retrain its pilots on the new planes, and there were issues related to maintenance, supplies, ground equipment and spare parts inventory for the new fleet that needed to be worked out.

“What’s the plan? Where are we going with this? What’s going to be the role of domestic private airlines?” Captain Butler asked of the Government’s aviation strategy, following Bahamasair’s new fleet purchase.

He added that while Bahamasair, as a government-owned carrier, might be able to delay paying certain taxes and fees to the Government, the private carriers and Sky Bahamas could not.

This, he added, was borne out by Bahamasair’s financial statements over the years.

Bahamasair is purchasing three 50-seat ATR 42-600 and two 70-seat ATR 72-600 planes. They are scheduled for delivery between November 2015 and June 2016.

Deputy Prime Minister Philip Davis, who has ministerial responsibility for Bahamasair, said: “Today is a red letter day for Bahamasair and the Bahamas,

“The acquisition of these aircraft is very important to the Bahamas to move people, goods and equipment from one island to another. Air transport has become an essential part of our way of life, and this addition to Bahamasair’s inventory is a critical bolstering of assets.”

Mr Davis said it was “critical” to replace Bahamasair’s present fleet to maintain the airline’s record of “safe, reliable and economical air service, to render it economically viable in the short-term and to make it attractive to private investors in the longer term”.

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Re: Concern Over $100m Restructure Of Bahamasair’s Fleet

Unread post by bimjim » Tue Jul 07, 2015

  • “They’re my routes,” Captain Butler responded
You may see trouble on the horizon, Captain Butler, but they are not YOUR routes. You may operate them, but they are not YOURS. Any Bahamian airline can come along and legally compete on the same routes with you.

Perhaps it is time to re-assess your costs, your revenues, and how well (or badly) you treat and pay your employees...

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