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Wednesday, July 10, 2013

Major U.S. Airlines Threaten Reduction of Air Service to Bahamas

Looks like the Bahamian Government has some backtracking to do - this won't fly! - (Pun Intended)  - Linda


Photo Credit: Bahamas Tourism Logo

Several major U.S. airlines (Jet Blue, Delta and American Airlines) representing 90% of the airlift to The Bahamas have warned government officials they will significantly reduce service to the island.

The threatened air service reduction is in response to new and increased fees and taxes, many of which the airlines say have been instituted with less than two weeks’ notice.

Members of the Airlines for America (A4A) trade association say the new taxes and fees threaten their “exceedingly slim” profit margins, forcing the operators to “reconsider their service levels to the Bahamas.” 

And this comes at a time when the Bahamas seeks to increase airlift by 400,000 seats in anticipation of the $3.5 billion Baha Mar resort development, which will add an additional 2,100 hotel rooms when it opens in 2015. 

Bahamian tourism officials, and even the Bahamas’ tourism minister have urged the government to re-consider the new fees. 

Obie Wilchcombe, the Bahamas Tourism Minister, said in local press reports that an airline cut back would be “an implication that the economy cannot afford.” 

The new processing fee was announced and introduced in the Bahamas’ House of Assembly during an annual budget debate without prior notification to the airlines. 

So what exactly is being proposed in taxes and fees?  

  • Extra $50 fee being levied by Customs to process their forms when they land in the Bahamas
  • $50 fee for refueling stops in the Bahamas 
  • Both private and commercial airline flights  - $75 for arrival and departure, making for a grand total of $150 per flight
  • In addition, the commercial airlines - especially foreign carriers - there is an additional "Customs Service Charge" for planes arriving after 5 pm, and before 9 am, on any given day
  • Commercial aircraft with a seating capacity of less than 30 will be charged $50 per hour
  • Aircraft with seats numbering between 31-70 will be charged $100 per hour
  • Aircraft with 71 seats or more will be charged $200 per hour.

AND - Airlines for America (A4A) trade association is also concerned over a new 1% administrative processing fee on aircraft repair parts imported to the Bahamas - including brakes, tires, and other aircraft parts. This fee, capped at $500 per import, replaces the previous $10 Stamp Duty levy.