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NAD: Fee increases will reduce airlines’ expenses

 

Despite the anxiety local air carriers have in regards to the upcoming fee increases at Lynden Pindling International Airport (LPIA), the rise in rates will decrease expenses for those airlines, according to a Nassau Airport Development (NAD) executive.

NAD Vice-president of Marketing and Communications Vernice Walkine told Guardian Business that the modified fee increases that will come into effect in January 2011 will eliminate some of the costs airlines previously incurred at the airport, and the completion and opening of the first stage of the$409.5 million expansion project will result in savings for them.

“The average costs to the airline are minimal because they are going to be saving on counters, equipment for the counters, boarding pass controls, and[other items],” Walkine said. “They’re getting brand new facilities, more services available to them and their passengers and somebody has to pay for it. They don’t have to pay for any of that now.”

The expected changes include an increase in landing fees by 10 percent and a 3 percent rise in aircraft loading bridge fees, aircraft parking fees and terminal fees.

International passenger fees will also go up to $27.50 from $27.00. Even with the increases, the modified LPIA fees will still be in line with fees at other airports in the Caribbean. They are also expected to generate more revenue that will help reduce the cost of redeveloping the airport.

The jump in fees forced some carriers to adjust their operations, most notably SkyBahamas, which had to delay its plan to expand its route structure, according to SkyBahamas President Randy Butler. He added that the domestic airline’s flights to Freeport, Grand Bahama were reduced and its launch into the U.S. market was delayed for four months because of the new rates.

However, Walkine said that the fee increase should be viewed from a different perspective.

“The whole story is not being told when you just focus on the fees, because there’s a corresponding reduction in expenses, she said.”The fees are minimal and still competitive.”

Even with the increase, the 2011 rates are still competitive and are 8 percent less that the current Caribbean average. Once the third stage of the LPIA redevelopment is completed in 2013, the rates will be in line with the regional average, according to NAD.

NAD’s President and CEO Stuart Steeves said the response from other people in the industry in regards to the new few structure has been good.

“From an international perspective [the fees] are competitive, we remain below average, but what we are creating here is a far-above-average facility,” Steeves said. “The feedback we’ve[received]from the strategic and executive level recognizes that. From a domestic perspective, we really tried to marginalize and keep the rates small… and the rate increase in January 2011 is only 17 cents per seat.”

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