Minister eyes air fees deal ‘shortly’


Tribune Business Reporter

The Bahamas hopes to complete talks with the US over management of its air space, and an associated revenue-sharing agreement, “very shortly”, a Cabinet minister said yesterday.

Speaking ahead of a Cabinet meeting, Dionisio D’Aguilar, minister of tourism and aviation, said negotiations had been slowed by the recent 35-day US government shutdown.

He said: “There’s really a two-pronged approach. The first part of the exercise is to negotiate with the Americans the management of the airspace. That process is ongoing. It was slowed by the government shut down. We are hoping to get that completed very shortly.”

The Bahamas is aiming to finally earn a share of the fees paid by aircraft flying through its sovereign air space - charges that are known as overflight fees. It will pay a portion of the sum earned to the Federal Aviation Administration (FAA) in return for the US regulator continuing to manage this nation’s air space on its behalf.

How much this nation earns will ultimately be determined by the terms of the revenue sharing deal struck with the US government, and the method employed for calculating the overflight fees. While the US determines its fees by the distance aircraft travel through its air space, other countries base it on the size and weight of the respective plane.

Mr D’Aguilar previously estimated to Tribune Business that The Bahamas could earn between $40m-$50m from such an arrangement as “an educated guess”. Such a sum is not insignificant given the Public Treasury’s cash-strapped state, and would finance the Bahamas Civil Aviation Authority and its regulatory/supervisory regime.

The government has issued a request for proposal (RFP) for companies to monetise Bahamian air space by collecting the proposed overflight fees on the government’s behalf.

“The other part is the monetisation of the air space, beginning to charge fees,” Mr D’Aguilar said yesterday. “We are presently in the monetisation process, and we’re hoping to receive proposals in. When we get those we will evaluate those and, hopefully, the monetisation process will begin.”

Mr D’Aguilar previously told Tribune Business that the US was also interested in sealing an “open skies” agreement with The Bahamas, as many of the conditions for such a deal are already in place.

A so-called “open skies” agreement is a bilateral deal that liberalises commercial aviation services between two countries, allowing their respective airlines to fly to the other unmolested by any regulatory restrictions, bureaucracy or trade barriers.

He emphasised that an “open skies” deal would not permit “cabotage”, which would give US-owned airlines the right to operate domestic flights, and while not opposed to such an agreement in principle it needed to be given more thought by the Minnis administration.

The Christie administration took the first steps towards The Bahamas gaining a new revenue source through its January 2017 agreement with the FAA to exempt Bahamian aircraft operators from the payment of overflight fees for domestic flights in their own airspace.

At the time, then-Prime Minister Perry Christie said the deal, which was seen as a possible first step in The Bahamas regaining control of its own air space above 6,000 feet, would save the national flag carrier, Bahamasair, around $1m over a three-year period.

Under international laws, countries require airlines and other aircraft to pay a fee for the right to fly over their airspace. The administration of those rights in The Bahamas has been performed by the FAA since 1952, meaning Bahamasair and other Bahamian-owned carriers have had to pay the US for the privilege of flying over their own country.

Former minister of transport, Glenys Hanna Martin, previously said talks on the matter stretched back to 2006 during the first Christie administration, when negotiations initiated by that government had “progressed as far as a request from the Bahamian government for the US government to submit a proposal for the payment to the government of The Bahamas of overflight fees”.