Wednesday, August 21, 2013

Airline's $4 million investment hinging on U.S. pass

August 20, 2013

Tribune Business Editor

A leading aviation executive yesterday said the success of his latest $4 million investment depends heavily on whether the Bahamas retains Category 1 status with the U.S., with federal inspectors due back in this nation today.

Captain Randy Butler, Sky Bahamas’ chief executive, confirmed to Tribune Business the carrier’s plans to add service between Bimini and Fort Lauderdale by November 2013, an expansion that hinges on the Federal Aviation Administration giving this nation a clean bill of health.

This newspaper can reveal that Federal Aviation Administration inspectors are back in the Bahamas today for a pivotal review of this nation’s ‘action plan’ and measures taken to correct deficiencies in its aviation regulatory regime.

The Federal Aviation Administration audit, which took place in April 2013 as part of its regular three-four year review, found numerous deficiencies that - if not corrected - could see the Bahamas downgraded to Category 2 status.

However, Captain Patrick Rolle, director of the Civil Aviation Department (CAD), yesterday told Tribune Business he was confident that the Bahamas would “not have any major issues” with the Federal Aviation Administration review, and would still retain Category 1 standing.

With one eye on his investment in two more aircraft, Captain Butler told Tribune Business: “We continue to support the Government in hoping all the efforts they have made pay off.

“We’re hoping to expand, and are hoping the Government have put in the proper laws and regulatory infrastructure that give them a basis to work from.”

Captain Butler said his two new aircraft would arrive in September and October, respectively, and would open up the north-west Bahamas.

Sky Bahamas is aiming to introduce two-way service between Nassau and Bimini, and open routes from the latter island to Fort Lauderdale and Freeport, building on the tourist and local traffic generated by Genting’s developments.

But, noting that Sky Bahamas had enjoyed 85 percent load factors on its US routes in the summer, Captain Butler told Tribune Business that maintaining Category 1 status with the Federal Aviation Administration was vital to the international expansion ambitions of both his and other Bahamian-owned carriers.

Among the consequences of a bad Federal Aviation Administration audit are that Bahamian-owned airlines, including Bahamasair, would be unable to expand their routes and flight frequency into the US.

This, Captain Butler said, would also hit any local carrier’s aspirations to serve new resort developments on islands such as Eleuthera and Cat Island from the US.

“We have to be in good standing with the Federal Aviation Administration,” Captain Butler told Tribune Business.”With the new hotels coming on board, this is going to he huge for us.”

And, pointing out that retaining Category 1 status was all about the Bahamas’ reputation and prestige, and that of its aviation industry, he added: “It’s also the image.

“It’s the impact of confidence for people to do business with Bahamian airlines and the Bahamas. Folks are looking to see if the Government is on track and demonstrating political will; that there’s proper oversight and support for development of the tourism industry in the Family Islands.”

Captain Butler said Sky Bahamas had already hired an extra eight staff for its planned Bimini expansion, and another five posts had yet to be filled.

Domestic service from Bimini, he added, would begin October, with the Fort Lauderdale route following in November once all US regulatory approvals were received.

Meanwhile, Captain Rolle told Tribune Business that the Bahamas had “answered all the questions” raised by the Federal Aviation Administration during its initial audit.

Pledging that all necessary training initiatives had been put into place, and a corrective action plan completed, he said: “I don’t think we’re going to have any major issues with that [audit].

“It’s a matter of them [the Federal Aviation Administration] coming and reviewing it. We’re in a meeting now at CAD making sure all the ‘i’s’ are dotted and the ‘t’s’ crossed. I don’t see a major problem barring something unforeseen.”

Explaining how the process worked, Captain Rolle said the Federal Aviation Administration gave the Bahamas an opportunity to comment on its audit findings, develop an ‘action plan’ to correct any failings and then returned to assess this.

Suggesting that some Federal Aviation Administration comments were strange, he added: “They’re findings in some cases were a bit different, but we have to try and figure them out.”

Disclosing that one issue related to how two states handled aircraft maintenance between them, Captain Rolle said: “We’ve corrected that, and taken steps to ensure it does not happen in the future.”

But, acknowledging the importance of retaining Category 1 status, he told Tribune Business: “It’s critical for us.

“We’re a tourist destination and have a major project going with Baha Mar. Bahamasair’s talking about buying new planes, and this will affect that if the standard’s not maintained.

“There’s a perception that Category 2 is something terrible. It’s a regulatory issue, and does affect the perception of the industry.”