By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior aviation executive yesterday warned Bahamian airlines and charters will be placed at “an unjust disadvantage” by six-fold and greater fee increases proposed for this nation’s air navigation services regime.

Anthony Hamilton, president of the Bahamas Association of Air Transport Operators, told Tribune Business that the changes suggested by the Bahamas Air Navigation Services Authority (BANSA) place an “inequitable burden” on local carriers by discriminating against them while, at the same time, favouring foreign carriers that fly through this nation’s air space without landing here.

Speaking after Tribune Business revealed that BANSA’s rebalancing will shift the fee burden to flights that land and take-off in this nation, some 77 percent of which are operated by Bahamian airlines and charters, he added that the proposed amendments also discriminate against the smaller planes they typically use by imposing a higher per seat cost compared to larger aircraft such as Boeing 777s.

And Dr Hamilton, who noted that the cost per seat is also higher for planes landing in/taking off from The Bahamas as opposed to aircraft simply flying over this nation, told this newspaper his concerns extend beyond just the fee hikes to include BANSA’s “bloated” 207-strong workforce, a 35 percent average salary increase for air traffic controller union members, and how the costs underpinning its calculations were arrived at.

As an example, he said BANSA’S audited financial statements for 2021-2022 and 2022-2023, which the Authority’s own February 2025 consultation paper says played a key role in determining the costs that the revised fees will have to cover, have not been disclosed for public scrutiny. As a result, Mr Hamilton said it will be impossible for aviation industry stakeholders to determine if the costs and fees are justified.

And, describing the salary increase for members of the Bahamas Air Traffic Controllers Union as placing an “astronomical burden” on BANSA, he added that the Authority’s weighted average cost of capital (WACC) - which starts at 11 percent and is projected to peak at 14 percent in the 2025-2026 fiscal year - appeared “overly burdensome” and cheaper capital sources needed to be accessed.

“It’s going to be catastrophic for the domestic operators,” Mr Hamilton told Tribune Business if the proposed new BANSA fees, which are to be discussed at an industry consultation on March 5, are implemented as is. He confirmed that the main concern is not so much these fee hikes by themselves but the fact they are coming on top of other new and/or increased charges that have been imposed on aviation in recent years.

Urging that there be “value for dollars”, Mr Hamilton said operators wanted to know that funds generated by existing levies on the Bahamian aviation industry are being spent wisely. “Every one of this silos is trying to survive by themselves and they can’t,” he added of the various fee-charging regulatory bodies overseeing the sector.

“The trajectory I’m looking at right now, we need all the players in the same room. We don’t need the Government meeting with Tom over there, Sue over here. We need everyone in the same room. We need straight talk, and open and honest people to sit in the same room and have a vision for this industry and vision for the country. If we’re going north let’s all go north. We can fix the gaps and make the adjustments.”

Under the proposed BANSA fee adjustments, all take-off and landing fees - known as origin/destination charges - will endure between four-fold and six-fold plus increases over the next four years to 2028-2029. However, Mr Hamilton, in a written reply to this newspaper’s inquiries, voiced disquiet that some of the aircraft types most widely-used by Bahamian operators were not included in the consultation paper.

He explained that it “does not include the higher usage of aircraft within the jurisdiction, namely the Beechcraft 1900 (19 seats), and the Beechcraft 99 (15 seater). The rate for the Cessna 525 is presented at $10.85 per seat and the SAAB 340 (33 seats) at $2.85 per seat.

“Both the 19-seater and 15-seater aircraft are higher frequency users of the domestic space, and one can deduce from the above that the rates per seat will be very high,” Mr Hamilton said. A Cessna 525, which is a twin-engined jet with a six seat capacity, will see its take-off/landing fees increase more than six-fold or 551 percent under the new schedule, rising from just $10 to $65.09. 

And Mr Hamilton also pointed out that the charge per seat is higher for all categories of aircraft when it comes to take-off/landing fees, while that for planes flying over The Bahamas is lower. “The origin/destination charge for the Boeing 777 is presented at $1.08 per seat, and the related overflight charge is presented at $0.08 per seat,” he added.

“The disparity in pricing per seat places the domestic operator at an unfair and unjust disadvantage. The cost of BANSA’s service should not present such a disparity between operating types while skewing the benefit to the larger aircraft types.

“Using the MTOW (maximum take-off weight of planes) does not appear to take into consideration the rescue and recovery effort, and associated matters, that would arise in the event of an adverse incident. For this factor alone, placing the greater cost per unit on the smaller aircrafts is unfair.”

In contrast, all overflight fee categories will enjoy reductions in both absolute dollar and percentage terms, with the latter involving cuts ranging from 36 percent to a maximum of 69 percent. “The cost recovery structure presented places an undue allocation of the costs on origin/destination domestic operators based on the classification of the rate structure to aircraft type,” Mr Hamilton concluded.

“The agency should re-evaluate its resource allocations of cost of capital and personnel, as well as the cost structure and burden that its current forecasts place on local operators, and present an equitable arrangement that benefits and enhances service to the operators whose flights originate within The Bahamas.”

The BANSA consultation document, meanwhile, reveals previously undisclosed details of the recent industrial agreement signed with the Bahamas Air Traffic Controllers Union. “It should be noted that BANSA recently concluded a new industrial agreement, which included increases in salaries and related benefits for the staff,” the paper revealed.

“The three-year agreement foresees an increase in salaries at an average 35 percent over the three-year period fiscal year 2022-2023, 2023-2024 and 2024-2025. In addition, other salary-related costs at an average of 11 percent for the same period. Additionally, BANSA has committed to complete a workforce assessment in 2024-2025 to determine the amount of ATS (air traffic services) and support personnel to be recruited on an annual basis.”

BANSA was shown as having 207 employees at the end of 2022-2023, the bulk of whom were employed in air traffic operations (146) with some 160 stationed in New Providence. And the Authority’s weighted average cost of capital (WACC) is forecast to rise from an initial 11 percent to 14 percent in the 2025-2026 fiscal year, then reduce slightly to 13 percent annually through to 2028-2029.

However, Mr Hamilton argued: The BANSA staffing structure at 207 personnel is bloated and does not appear to include any component of search and rescue. The weighted average cost of capital is overly burdensome at 11 percent in the initial years and rises to 14 percent in fiscal year 2025-2026.

“A 35 percent salary increase in the initial years is an astronomical burden to place on the agency, particularly when the agency seems to be committed to 11 percent increases in each of the forecasted years. The agency should make it a priority to source less costly capital.

“Having had an opportunity to review the report, it appears to refer to the fiscal audit of 2021-2022. However, a copy of the audit report is not attached, nor is a copy of the extract of the audited functional expenses related to the agency,” he continued.

“The inclusion of the referenced audit reports would aid the process of justification and relevance to the final decision-making process in the best interest of both stakeholders and the citizenry of the Commonwealth of The Bahamas.”

Mr Hamilton said the BANSA consultation paper “refers to the ongoing requirements to provide support services to Federal Aviation Administration (FAA) equipment based in The Bahamas”, but “does not present any information on the receipt of costs reimbursements from the FAA for these services”.

“In addition to BANSA’s assets, the FAA is the owner of several assets installed throughout The Bahamas archipelago. The FAA frequently requires BANSA to provide local support for equipment maintenance in case of disruptions or failures,” the consultation paper said.

“BANSA provides support also to several FAA missions to execute planned and unplanned maintenance activities of these assets. This does not result in a depreciation cost accountable for BANSA, but it does imply a staff-related effort which has been calculated.”

Lenn King, BANSA’s director, did not reply to an e-mail sent to his work address seeking comment before press time last night.