With an uptick in the U.S. economy and Baha Mar staring down its grand opening date, Minister of Tourism and Aviation Dionisio D’Aguilar said Bahamasair will have a pivotal role to play in ensuring the country has enough seats at affordable prices to bring in an additional 250,000 individuals by rough estimation.
D’Aguilar told Guardian Business that Bahamasair not only provides critical supplementary seats for this market, but its competitive rates keep other large carriers’ rates at a “reasonable” level.
“It stops the legacy airlines from getting outrageous when demand surges,” said D’Aguilar. “It’s critical in that regard, to keep prices reasonable.”
However, D’Aguilar said the rub with Bahamasair has been and continues to be its cost to taxpayers. That cost is expected to spike by $25 million as the government begins to pay on the debt incurred through the purchase of new ATR aircraft for Bahamasair’s fleet. Taxpayers will see the country’s bill for the airline spike to $40 million in 2019.
But, the country has to have the additional airlift as Baha Mar opens its final hotel tower, Rosewood, at the beginning of the second quarter of this year.
D’Aguilar said privatizing the airline might have been an option, but it is not on the agenda for the Free National Movement government at the moment.
“Letting a private operator in is a major seismic decision that governments are afraid to make,” he said. “At some point you have to take the plunge.”
He pointed out that Jamaica decided to divest itself of its national airline and saved itself $140 million in the process.
However, according to D’Aguilar, for now the Bahamas government has to hold on to Bahamasair to ensure the destination remains competitive and capacity remains at acceptable levels.
“The question we have to ask ourselves is if it is worth the subvention,” he said. “That’s the $40 million question because that’s how much it will cost next year when we have to start paying on the new aircraft… when the principal starts to be repaid.”
He added that Bahamasair proved its usefulness to national security during the evacuations before Hurricane Irma, when hundreds were airlifted to New Providence ahead of the storm.