Airline head wary of LPIA fee increases
With fee changes at the Lynden Pindling International Airport(LPIA)now in effect, a local airline executive is concerned about how domestic operators will have to modify their budgets to incorporate the rise.
President of SkyBahamas Randy Butler toldGuardian Businessyesterday that airlines that can’t absorb the fee increases may have to cut costs in major areas in order to meet their monetary committents with LPIA.
“If you start putting all of these fees on a company and they don’t have the capital to pay the fees, then a situation could be created where they reduce costs in major areas like safety training and maintenence just to make payments,”Butler said.”The government has to be careful with that.”
The changes, which came into effect on January 1, 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. It’s also a move to generate more revenue that will help reduce the cost of redeveloping the airport.
Butler said at least 60 percent of an airline’s budget is dedicated to maintenence and safety, and there is a possibility that those areas could be impacted along with other facets of operations. He also mentioned that most of the expansion taking place at LPIA is geared towards the international market, while the domestic crowd feels the fee increases the most.
“Most of the airport development is being done for the international travelers but the domestic travelers are paying most of the fees,”Butler said.”There’s no balance in that.”
However, Vice-president of Marketing and Communications for the Nassau Airport Development(NAD)Vernice Walkine toldGuardian Businessin an earlier interview that the fees will eliminate some of the costs airlines previously incurred at the airport and they will end up saving money in the long term. According to Walkine, airlines won’t have to pay for equipment, counters, boarding pass controls and other items.
Butler said that a lack of dialog between the local aviation community and the government is harming growth.
“The truth of the matter is that reality is setting in as operations have no other choice but to adjust, and the government doesn’t understand the role[domestic airlines]play in development,”he said.”Government looks at aviation in this archipelago as a luxury and not an essential service.”