Bahamasair\uffb4s Managing Director Paul Major says although the airline experienced a reduction of losses by 50 percent during the last fiscal year, it needs to make about $100 million in revenue to generate a profit.<\/P><\/p>\n
In an interview with Love 97 CEO Wendall Jones, Mr. Major said about $70 million to $80 million is spent annually on costs at the national airline. \uffa0<\/P><\/p>\n
\uff93You need the counters, the aircraft, the staff, the equipment out on the ramp,\uff92 he said. \uffa0\uff93By the time you\uffb4ve done that, about $80 million [is] gone, so you have to be making over $80 million to make a profit.<\/P><\/p>\n
\uff93The only way you could do that is by flying more and longer routes. \uffa0The only way you could do that is by having sufficient aircraft to do it. \uffa0Now that we\uffb4ve started to get the aircraft, we\uffb4ve got to start to exploit that.\uff92<\/P><\/p>\n
Mr. Major said Bahamasair may begin flying into Raleigh, North Carolina; Richmond, Virginia and Cleveland, Ohio.<\/P><\/p>\n
The airline reduced its financial hemorrhaging from $27 million for the fiscal year 2002\/2003 to $13.5 million in 2003\/2004. \uffa0Mr. Major is confident the airline is well positioned to repeat that accomplishment during the 2004\/2005 fiscal year.<\/P><\/p>\n
According to Mr. Major, there was a combination of factors involved in the substantial cut in losses during the last fiscal year, including the Dash 8 aircraft that were purchased back in 1992 now being \uff93fully depreciated.\uff92 \uffa0<\/P><\/p>\n
Mr. Major said after buying a number of Dash 8 aircraft last December, the company had no need to employ additional wet lease.<\/P><\/p>\n
He added that revenue grew by $3 million during the last fiscal year, in addition to the airline realizing savings in maintenance overhead and a reduction in staff.<\/P><\/p>\n
Bahamasair staff was reduced from between 832 in 2000 to 680 in 2004.<\/P><\/p>\n
Mr. Major also attributed Bahamasair\uffb4s turnaround to the professionalism of staff, adding that management has experienced \uff93no difficulty\uff92 with political involvement.<\/P><\/p>\n
\uff93None whatsoever,\uff92 he said. \uff93[Works and Utilities Minister Bradley Roberts] is a businessman so he understands how businesses run and he understands that if you have a competent board and management, you really only need to provide them with the tools and the support to get the job done. If any of those two things are not present, he would do what he has to make that right.\uff92<\/P><\/p>\n
Mr. Major said he believes Bahamasair will further reduce its losses in the next 12 months because he is confident revenue will increase. \uffa0<\/P><\/p>\n
However, he admitted that he doesn\uffb4t believe the airline will \uff93turn the corner\uff92 during that period mainly due to the \uff93new competitive pressure.\uff92<\/P><\/p>\n
\uff93If the other guy drops his fares,\uff92 Mr. Major said, \uff93we have to drop ours otherwise we\uffb4re out of business. \uffa0If you can\uffb4t do anything about your costs, your losses start to go the wrong way\uff85those pressures are going to kick in and when they do we\uffb4re going to feel the pinch.\uff92<\/P><\/p>\n
Mr. Major denied that Bahamasair has lost business to American Airlines. \uffa0<\/P><\/p>\n
Statistics show that over the past 18 months, Bahamasair\uffb4s percentage of the market share has grown as American Airline has about 38 percent of the Florida market and Bahamasair has historically had about 32 percent, according to Mr. Major. \uffa0<\/P><\/p>\n
\uff93We\uffb4ve now gone to about 34 to 35 percent,\uff92 he said. \uff93I wouldn\uffb4t say that we have lost nor (are) certainly losing. \uffa0We may not have as many flights but we\uffb4re moving almost as much capacity. We also supplement our jet service with Dash 8\uffb4s in between.\uff92<\/P><\/p>\n
He added that 88 percent of Bahamasair\uffb4s traffic has historically been Bahamians with only 12 percent tourists, but that is fast changing. \uffa0<\/P><\/p>\n
Mr. Major said Bahamians account for 86 percent of Bahamasair\uffb4s traffic while tourists account for14 percent. \uffa0He added that the aim is to have 70 percent Bahamians onboard and 30 percent tourists by the end of the 2004\/2005 fiscal year.<\/P><\/p>\n
As for the privatization of Bahamasair, Mr. Major said the airline\uffb4s management is now in the process of contracting consultant to assist the airline through a five-year business plan, assist in finding equity, technical and operational partners and in the implementation of privatization.<\/P><\/p>\n
He said an equity partner would assist in injecting capital into Bahamasair, therefore sharing the risk with the government.<\/P><\/p>\n
\uff93You would hope that that partner also has the technical wherewithal and possibly assets that would be combined with yours to be able to make this a profitable venture,\uff92 he said. \uffa0<\/P><\/p>\n
Speaking to the airline\uffb4s stability in the aftermath of the September 11, 2001 terror attacks on America, Mr. said operationally, the major change at Bahamasair following 9\/11 was the increased security and the costs associated with that.<\/P><\/p>\n
Mr. Major said when he joined the airline in 2000, management was able to boost revenue to $71 million from $66 million the year before, hitting a growth path.<\/P><\/p>\n
\uff93This was by getting our schedule off a little earlier in the morning and flying a little later at night and some other things,\uff92 he said.<\/P><\/p>\n
However, post 9\/11 revenue declined to about $61 million, Mr. Major indicated.<\/P><\/p>\n
\uff93So you could see why the losses began to skyrocket,\uff92 he said. \uff93The revenues were going the wrong way and your expenses, the wrong way\uff85there were fewer people traveling, yet you had to pay these incremental costs to be able to continue flying.\uff92<\/P><\/p>\n
Although admitting that Bahamasair has offered \uff93shabby service\uff92 over time, Mr. Major said the airline has done a great job in improving its image over the past nine months to a year.<\/P><\/p>\n
Hadassah Hall, The Bahama Journal<\/B><\/P><\/p>\n","protected":false},"excerpt":{"rendered":"
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