Airlines: We'd be better grounded

• COVID restrictions make inter-island travel 'loss leader'

• Bahamasair to seek extra subsidy with loads 'under 10'

• 'Not even a handful' of private operators return to skies


Tribune Business Editor

Bahamian airlines yesterday suggested they may be better off remaining grounded with COVID-19 restrictions transforming the return of inter-island travel into "a loss leader".

Tommy Turnquest, Bahamasair's chairman, conceded "that's a question you have to ask" when Tribune Business queried whether it was financially worthwhile for the loss-making national flag carrier to return to the skies when the typical flight was carrying "under ten" passengers.

Such volumes represent less than 14 percent and 24 percent, respectively, of the load factors available on Bahamasair's 72-seat and 42-seat ATR turbo prop aircraft, but Mr Turnquest said it was nevertheless vital that the airline fulfill its mandate to provide vital transportation links between Nassau and all the Family Islands.

"I didn't expect any traffic really from Nassau to the island destinations because of the negative COVID-19 PCR test requirement, the cost of it and the 14-day quarantine," he told this newspaper.

"I figured that in itself would dampen demand. I thought there would be some pent-up demand to come to Nassau, but there isn't even that. In the south-east Bahamas, Acklins, Crooked Island, we had a flight back with 30. There were people down there that wanted to come back, but that was just one flight. We're taking a dozen to Marsh Harbour but the numbers are really, really low.

"But I think it's important for the Government to begin to provide some transportation links, which is the purpose for why Bahamasair was formed, but it's definitely a loss leader," Mr Turnquest added. "Somebody's got to do it. The Government has to show we're beginning to assist in terms of opening up the islands of The Bahamas. That's one of the reasons Bahamasair gets its subvention."

Acknowledging the further financial losses, and additional burden this will likely impose on Bahamian taxpayers, Mr Turnquest said the Government had provided the national flag carrier with some $6m during August when the airline was totally shutdown amid the travel suspension designed to contain the COVID-19 outbreak.

And he lamented that Bahamasair had also lost one of its revenue rich (by comparison) periods that is typically the July-August period of vacations and back-so-school. "We're normally awash with cash in July and August; that is normally the boom time," he added.

"That's summer travel. People want to give their family a little vacation before they go back to school. We missed all that business. Nobody wants to travel until we get the COVID-19 situation under control, the world and The Bahamas included."

Bahamasair was due to receive a $19m subsidy during the 2020-2021 fiscal year, but Mr Turnquest confirmed that this will significantly increase due to the loss of revenue and business from the COVID-19 restrictions.

With the national flag carrier's operating costs estimated at $7m per month, he said of the greater subsidy ask: "I do have an idea, but it's not for me to tell you at this time. I have to provide it up the line. In wouldn't want that in the paper."

Anthony K Hamilton, president of the Bahamas Association of Air Transport Operators, told Tribune Business that the liability for Bahamasair's further losses following the resumption of inter-island travel last Wednesday, September 9, will again fall on long-suffering taxpayers.

"When you think about it, Bahamasair taking on just four passengers going out, just imagine how much is lost to introduce that flight. Who's paying for it? The taxpayers," he said, revealing that "not even a handful" of privately-owned domestic airlines and operators have resumed flying because the low load factors meant it was just not financially viable.

"There's minimal traffic because of the COVID-19 restrictions. You have the quarantine period and fee associated with securing the negative COVID-19 PCR test result," Mr Hamilton added. "That's the sentiment that's emanating right now. Nothing has changed.

"As a matter of fact, some operators have not even moved. It's a miniscule amount that are seeking to execute; not even a handful. We will see how things go by later this week, but I suppose everybody is going to scale back a bit."

Mr Hamilton disclosed that the decisions by Baha Mar and Sandals Royal Bahamian to delay their re-openings beyond the October 15 date recommended by the Ministry of Tourism for the hotel industry's return would negatively impact domestic aviation operators by causing the major international airlines to reduce airlift/seats into Nassau.

"The major hotels not opening any time soon is going to impact in terms of bulk traffic," he explained. "The domestic operators operate as a feeder system for the bulk traffic. That's a big component we rely upon for traffic to move. Once the large resorts are closed we have to rely on domestic traffic, and domestic traffic is thin because they don't have cash flow."

Mr Hamilton echoed Mr Turnquest in acknowledging that airlift was "absolutely necessary" for the economic and social viability of the Family Islands, but said this will "take some time to rebuild" due to the fall-out from COVID-19.

"We need to take a good hard look at the industry," he continued. "When we think of inter-island relationships, we need a very strong programme of interconnectivity for the Family Islands. A very strong infrastructure needs to be in place."

One airline that resumed commercial operations on September 9 was Western Air, albeit with the same lowered expectations for load factors and business volumes due to COVID-19.

Sherrexcia "Rexy" Rolle, the company's vice-president of operations and general counsel, told Tribune Business in a statement: "We are flying daily between our domestic locations - Marsh Harbour, Freeport, San Andros, Congo Town, Bimini, Cat Island, Georgetown and Nassau.

"The travel requirements, mainly the negative COVID-19 PCR test to depart Nassau and the 14-day quarantine upon arrival for all locations, has deterred or made it difficult for many to travel. The usual business traveller whose normal travel pattern is same-day excursions or two to three-day trips is reluctant to fly because they would not be permitted to conduct business upon their arrival even with a negative COVID-19 test.

"We have received a number of calls pertaining to that. Nevertheless, there are passengers on board. It's not the usual volume, and we don't expect it to be with the current requirements. We trust that as things progress and there is more accessibility to the PCR test, more travel will proceed, or the requirements are adjusted to better suit domestic travel while balancing both health and economics."

Ms Rolle said Western Air was following all COVID-19 cleaning and health and safety protocols. She added: "Prior to the late July (COVID) resurgence, domestic travel was able to operate while cases were indeed contained without the need of PCR tests to depart Nassau.

"Airlines are one of the safest forms of travel due to the high efficiency air filtration and ventilation systems that allows fresh air to circulate within the cabin. Western Air jet aircrafts, similar to those operated by other international carriers, are equipped with the high efficiency filtration and ventilation systems that significantly increases the quality of air in the cabin, which makes it less likely to transfer communicable diseases.

"Aircrafts, like the ones Western Air operates, were equipped with these air systems prior to the pandemic because aircraft manufacturers would have planned this to combat the threats of tuberculosis, SARS and other communicable diseases in the past. And while everyone must still travel and interact with an abundance of caution, it is important for the flying public to know this."

Faron Sawyer, Cherokee Air's chief executive, told Tribune Business the company had resumed commercial flights "on a smaller scale" since the COVID-19 inter-island travel restrictions were lifted.

"The only thing that is making business a little slow is that people have to quarantine wherever it is they have to go and they are not wanting to travel because of it," he added.