BANSA Fee Hike Stirs Controversy in Bahamas
The Bahamas Air Navigation Services Authority (BANSA) has recently begun charging retroactive fees for the three-year period from May 2021 to July 2024, a move that is causing concern among local carriers. The new charging scheme, which was only announced in April 2024 and set to take effect from July 1, 2024, increases origin/destination (O&D) charges significantly, and this retroactive billing is expected to have a major impact on domestic aviation operations.
Local airlines have voiced strong objections to the fee increase. Western Air Bahamas, based at Nassau International, received an invoice totaling over BSD2.4 million for the period between 2021 and 2024. In a statement to The Tribune, Western Air Bahamas CEO Shandrice Rolle said that these charges had never been previously communicated and warned that they could lead to anti-competitive practices, particularly if state-owned Bahamasair is granted a fee exemption. According to a notice of intent dated April 15, 2024, BANSA plans to exempt aircraft owned or chartered by the government of The Bahamas, as well as those involved in search and rescue, medevac services, emergency landings, and aircraft operated by the Armed Forces or governments of International Civil Aviation Organisation (ICAO) member states.
The retroactive fee scheme is part of BANSA’s broader efforts to restructure its revenue streams. BANSA stated that increasing the O&D fees would boost its revenue from BSD3.65 million in the 2023-2024 fiscal year to an estimated BSD38.19 million by the 2028-2029 period. At the same time, the authority anticipates a dramatic drop in revenues from overflight fees, which are primarily paid by international carriers, from BSD44.39 million to just BSD3.42 million over the same period. This restructuring has been a point of contention, with international lobby groups such as Airlines 4 America challenging the shift.
Trans Island Airways, another local carrier operating from Nassau International, reported receiving an invoice that nearly doubled the sum it had paid in the previous period. The airline has warned that if BANSA does not reconsider the fee hike, it may be forced to leave The Bahamas and relocate its operations to another jurisdiction. Such drastic increases could jeopardize the financial viability of smaller carriers and disrupt the local aviation market.
For years, BANSA has been attempting to balance its fee structure by increasing O&D fees while reducing overflight fees. However, local carriers argue that the proposed increases, especially when applied retroactively, could put them out of business. This sentiment has sparked widespread concern among domestic operators who rely on stable fee structures to manage their operating costs.
The situation remains fluid as BANSA, Bahamasair, Western Air Bahamas, Flamingo Air, Trans Island Airways, Southern Air Charter, and Pineapple Air have yet to provide a joint response. Industry observers note that these changes reflect the challenging economic environment in the aviation sector, where rising costs and shifting revenue models are prompting regulatory bodies to adjust fee structures.
As the retroactive fees begin to impact local carriers, the broader aviation community in the Bahamas is watching closely. The outcome of this fee restructuring could have far-reaching implications for the competitive landscape of the country’s aviation market and may prompt calls for further regulatory review to ensure a fair balance between revenue generation and the sustainability of domestic carriers.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com