Business
Bahamasair continues to struggle amid loss
The Perry Christie administration in the Bahamas, has revealed that the state-owned Bahamasair continues to suffer from high labor costs; an ageing fleet; escalating fuel costs; and a commitment to unprofitable domestic routes.
Phillip Davies – the country’s deputy prime minister and minister of works and urban development, said that while US$20 million have been budgeted for the Bahamasair Holdings this fiscal year, the problems facing the airline increased as a result of competition.
“Its circumstances have been further compounded by competition from smaller local private carriers providing services to domestic routes and ongoing downward pressure on airfares in the Florida market due to competition by low fare international carriers.”
Davis said that subsequent to the May 2012 general election, it was discovered that industrial agreements between Bahamasair and associated trade unions had expired for over three years, and employees had not been paid annual increments to which they were entitled.
“In response to these circumstances and in keeping with this administration’s campaign promise of ‘putting the people first,’ we moved very swiftly to approve and provide the funding necessary to satisfy this obligation.
“The government, early in the last budgetary cycle, agreed to the purchase of a third 120-seat Boeing 737-500 jet aircraft to permit an improvement in service and efficiency.”
He said the board and the management of Bahamasair are presently reviewing adjustments to the business model as a means of providing options, which would result in greater service to the people as a substantial cost saving over the existing expensive approach.
