Nassau Airport threatened SkyBahamas over arrears

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Nassau Airport threatened SkyBahamas over arrears

Unread post by bimjim » Tue Jul 24, 2018 ... r-arrears/

NAD threatened SkyBahamas over arrears
Candia Dames
July 23, 2018

As of June 29, SkyBahamas had an outstanding debt with Nassau Airport Development Company (NAD) in the amount of $454,015.06, according to a letter NAD sent the airline, which was facing the termination of its operating license.

However, SkyBahamas President and CEO Captain Randy Butler said yesterday the arrears did not represent money collected by his company, but money owed by third parties, including the government.

“This is the facility and security fees that are outstanding and that are outstanding from people that we give credit to,” he explained.

The airlines collect the fees then remit them to NAD. Butler said SkyBahamas sometimes faces long delays in getting these third parties to pay their bills.

Butler also said it was not unusual for the airline to have ongoing arrears and stressed that SkyBahamas has a good relationship with NAD.

“One company owes $40,000. Sometimes the government’s bill is $120,000; sometimes the government’s bill is $200,000 and that’s money that we have to wait until the Treasury [gives us]. They give us some now, some later,” he said.

“In the meantime, you have to pay your staff, you have to pay all the other bills and keep flying, keep going.

“So it’s a common thing. This is not like a first time thing. This is a continuous thing. This has been happening in the 10 years we’ve had this airline and we’ve worked with NAD.

“We’ve gone up to $500,000, $600,000 and paid it off… It’s a continuous thing.”

Deputy Prime Minister and Minister of Finance Peter Turnquest is the former chairman of SkyBahamas.

Butler said yesterday that Turnquest is no longer a shareholder in the airline.

He said the fact that the airline’s former chairman is now deputy prime minister provides no special benefit or consideration to SkyBahamas, which is working with NAD to resolve its issues.

Butler was contacted by The Nassau Guardian after two letters from NAD were leaked and widely circulated.

The letters were also attached to a release from former Progressive Liberal Party (PLP) Chairman Bradley Roberts about SkyBahamas’ arrears.

The first letter was sent by NAD Vice President of Finance and CFO Paula Rigby to Butler. It is dated January 9, 2018.

The letter states: “Despite our numerous letters, emails and telephone calls, your account remains in arrears and is now pending termination of subject lease.

“Your current indebtedness to NAD as of December 31, 2017 is $621,690.81.”

To assist SkyBahamas in bringing its account current, NAD said it was prepared to extend certain terms to the company.

“SkyBahamas Airlines Limited will pay $12,500 weekly on arrears commencing January 12, 2018 until outstanding amounts are paid in full,” the letter continued.

“SkyBahamas Airlines will pay current aeronautical charges, commencing with the December 31, 2017 invoice, within 30 days of receipt of invoice.”

A second letter from Rigby is dated June 29, 2018.

It says, “We write with reference to your outstanding debt to NAD in the amount of $454,015.06 and default of the subject operating license.

“As per the agreement NAD/SkyBahamas signed January 12, 2018 by SkyBahamas, the current amounts due remain outstanding, despite numerous written and verbal communications and NAD’s attempt to work with your company to reduce the large outstanding balance.”

According to that letter, $114,887.14 represented arrears as of December 31, 2017 (Sky Bahamas currently paying $12,500 weekly against arrears).

The letter said $239,611.98 in arrears was immediately due and $99,515.94 was due by July 11, 2018.

The letter added, “As significant attempts by NAD to assist you in reducing your outstanding balance have failed, SkyBahamas therefore has left us with no alternative but to commence the termination process of your operating license as per Article 9.

“Failure to remit payment of $239,611.98 by July 6, 2018 and $99,515.94 by July 11, 2018 will result in the termination of your agreement, the removal of all significance and the cancelation of your operating license.

“SkyBahamas will no longer be allowed to operate within the LPIA terminals.”

Butler did not confirm whether the payments were made by those dates, but said, “We’re still operating.”

Butler also said, “We’ve had a very good relationship with NAD. Both of us have seen challenges in the industry and both have had challenges sometimes with receivables, but we talk about it.

“The letter, I think, was written in good faith. By the time the letter was written to us, we were already working on the numbers which we have to pay from the company because that money is still out there.”

He explained, “We’ve got a lot of customers. We’ve got travel agencies. We’ve got corporate. We’ve got corporations that we give charge to.

“Everybody we give charge to we have to wait for when they send us the money. When they send us the money, we remit to NAD.

“Now, a lot of times we have to remit to NAD before we get the money, and most of our money comes from charge accounts, corporate accounts and travel agencies. We don’t get the money in hand up front. We get it from third parties that are selling the tickets on our behalf.”

Butler said it is unfortunate the letters were leaked.

But he noted, “Civil Aviation licenses us and the FAA [licenses us]. We’re in good hands. We’re still flying and we still have a good relationship with NAD.”

Asked his response to the former PLP chairman who questioned why SkyBahamas was still being allowed to operate, Butler said, “It’s politics, and I guess politicians do politics, and you know Bradley Roberts… That’s what he does.”

Dionisio D’Aguilar, aviation minister, said NAD runs as a business.

“NAD has got my full blessing to ratchet up their communications with people who are in arrears and I understand that SkyBahamas is in arrears and they have the full green light to do what they have to do,” D’Aguilar said.

“NAD has about half a billion dollars in debt, so the government cannot afford [for them not to collect it]…They must collect fees and they must collect revenues in order not to cost the government anything."

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