By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

THE DEPUTY prime minister says the Government is engaging at the “diplomatic level” with the US government over airline accusations that The Bahamas’ air navigation fees are discriminatory and anti-competitive.

Chester Cooper, also minister for tourism, investments and aviation, speaking ahead of the full weekly Cabinet meeting said the Davis administration has been engaged in “ongoing” discussions with the US Department of Transportation over the complaint by Airlines4America, whose members include American Airlines, Jet Blue, FedEx, Delta, Southwest Airlines, United Airlines, and the United Parcel Service.

“We are continuing dialogue with the Department of Transportation in the US in relation to the [air navigation] fees matter. You may recall there was a complaint by the US alliance partners. We’re having further discussions this week. We’ve responded to the complaint. We’re now engaged on a diplomatic level and those conversations are ongoing,” Mr Cooper said.

The dispute has potentially serious ramifications given that the US Department of Transportation, if it finds in the US airlines’ favour, could go to the extent of totally barring Bahamian airlines such as Bahamasair and Western Air from flying to the US or reducing such access. However, it is likely there is too much at stake for all parties to go to such extreme sanctions.

The Bahamas, in 2021, signed a 10-year deal that outsourced management of 75 percent of its air space above 6,000 feet to the Federal Aviation Administration (FAA), with the US agency agreeing to waive the air navigation fees it previously levied for using this country’s air space.

The Bahamas subsequently imposed its own air navigation services charges in a bid to generate revenue sufficient to fund the development of civil aviation safety and oversight in The Bahamas, and associated regulatory functions. This will thus eliminate the need for Bahamian taxpayers to fund this, saving the Public Treasury millions of dollars per annum at a time when it is coming under increasing fiscal stress.

However, arguing that these fees should only cover the cost of providing the service, the US airlines are alleging there is no justification for “the tens of millions of dollars” that The Bahamas is collecting given that it is just paying, at most, $80,000-$100,000 to the FAA. They claim this “runs afoul” of global best practice and agreements, plus the US International Air Transport Fair Competitive Practices Act 1974.

The Bahamas has established a sliding scale for its air navigation services fees that ranges from $8.50 to $51.60 per 100 nautical miles based on the aircraft’s weight. Several observers have privately suggested to Tribune Business that the US airlines are seeking to bully The Bahamas by placing no value on the worth of this country’s sovereign air space.

They believe the sector is longing for a return to the days when The Bahamas earned not a single cent in revenue from the aviation industry’s use of its air space, which sits on key Atlantic and other routes between Europe and the western hemisphere and North and South America. The FAA used to waive air navigation services fees for planes that took off and/or landed in the US after passing through Bahamian air space, thus giving them free use of this country.

The Government, in its answer to the US airlines’ complaint, asserted that The Bahamas’ air navigation services regime was compliant with the Chicago Convention - the agreement that established the main principles of global air transport - as well as International Civil Aviation Organisation (ICAO) guidelines.

The move drew support from the local business community, with Robert Carron saying he supported the Government’s efforts to resolve the issue, and said so should every Bahamian.

He said that under the Chicago Convention on International Civil Aviation, “each signatory recognises that every other signatory (including The Bahamas) has complete and exclusive sovereignty over the airspace above its land and seas”.

He also suggested that renaming the airspace in the region as “Miami Oceanic” had led to some confusion for airlines.