NAD Shooting Itself In Foot With Airline Fee Increases

Thursday 09th, September 2010 / 13:13 Published by
in Travel

The International Air Transport Association, the industry body, is urging the Nassau Airport Development Company (NAD) not to increase fees to airlines.

In a letter sent to NAD and copied to Bahamas Tourism Minister Vicent Vanderpool Wallace, the International Air Transport Association (IATA), which represents 230 airlines comprising 93 per cent of the world’s scheduled international air traffic, warns that increasing fees could reduce tourism arrivals to the Bahamas.

The air transport body objects to NAD’s planned 2011 increases to aircraft landing fees and additional airline charges saying that the proposed fees will more than double the current costs and will make it difficult for airlines to make a profit servicing the Bahamas.

The Tribune newspaper reports that the letter, signed by Cyriel Kronenburg, assistant director of industry changes for North and South America, said: “It is not in the interest of NAD, the airlines or the Bahamas to add to the existing burden and risk a further decline in demand.”

Mr Vanderpool Wallace said that while he was opposed, in principal, to any moves that would raise airline access costs, the increased fees are necessary to pay off NAD’s debt obligations.

It is understood that the higher fees would be passed on to air passengers translating into higher fares.  But airlines are already under pressure regarding increased fares.

Major airports across the globe are slashing charges in an attempt to help embattled airlines cope with the higher costs and the downturn in the aviation industry.  However, in the Bahamas, an ambitious airport expansion project has created a mountain of debt and raising fees was considered a way to finance that debt.

Meanwhile, in China, the civil aviation administration has suspended for six months its 10 per cent surcharge on landing fee at the nation’s airports. Several other international airports have followed suit.

The Business Today website reports that in India, IATA objects to the increased fees at Mumbai and Delhi airports, which they say are essentially charges to pre-finance airport development projects. “Pre-financing increases the costs of air travel when passengers are made to pay for facilities that are not yet in use,” says Albert Tjoeng, IATA spokesperson in Singapore.

The Bahamas’ interest in raising fees has come at a time when the industry is badly in need of stimulants, not costs that stifle recovery.

Capt. G.R. Gopinath, Vice Chairman of Kingfisher Airlines, in reference to the situation in India, said he finds the whole government approach towards airports infrastructure flawed and anti-consumer:

“The whole idea of privatising airports was to bring in accountability, efficiency and better quality of service at a competitive price. But what the government has effectively achieved is to replace the public sector monopoly over airports with a private sector monster.”

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