Friday, Oct 18, 2019
HomeBusinessBahamasair saves over $500,000 through ‘competitive’ insurance bids

Bahamasair saves over $500,000 through ‘competitive’ insurance bids

Bahamasair has been able to save hundreds of thousands of dollars simply by putting its contract for insurance coverage for employees, vehicles and buildings out to competitive bid, part of a cost-cutting drive which saw the airline reduce its operating loss by some 67 percent for the year in the first six months of the fiscal year.

Chairman of Bahamasair, Valentine Grimes, said that the airline had saved some $500,000 on insurance for its fleet of airlines, buildings and other equipment alone in this manner.

Elsewhere “marginal” savings were achieved by doing the same for health insurance coverage for employees.

Asked why the airline had not seen fit to approach its insurance coverage in this way before, Grimes only responded that the current board of the airline is simply “very serious” about “reducing cost wherever possible.”

“The more we accomplish the less of a financial burden we will be on the Bahamas government and the better the chances there are of us partnering with any entity,” he added.

“We are more importantly beginning to make significant strides to put Bahamasair on a better financial footing.”

His comments come after Prime Minister Perry Christie, during a recent speech to the University of the West Indies (UWI) in Trinidad and Tobago on The Bahamas’ relations with CARICOM, said that he had “informally” discussed with Trinidad and Tobago’s Prime Minister Kamla Persad-Bissessar the possibility of a partnership between Bahamasair and that country’s national carrier, Caribbean Airlines, “to see how various synergies might be achieved for the benefit of all.”

“For example, Bahamasair is now required to implement flights into the Bahamas from outside the region to serve our tourism sector. It may be possible for Caribbean Airlines and Bahamasair to cooperate in seeking to fulfill that demand. In addition, the two carriers may be able to fulfill the wish of many of the region to be able to traverse the region in a single day without having to pass through Miami,” said Christie at the time.

Grimes said any further questions on this particular partnership would need to be directed back to the prime minister as he did not know “how far (Christie and Persad-Bissessar) would have gotten” in the talks.

Turning back to cutting costs, Grimes said that the company is trying to do a “better job of collecting our revenue” and sees more revenue opportunities ahead for Bahamasair coming out of its recent acquisition of a new aircraft.

Grimes said that the airline is seeing positive feedback from customers as a result of the additional redundancy that the new plane will allow to be built into its operations.

“Definitely we’ll be able to do more charters, also in terms of our regular service we would then have a bit more equipment to have redundancy, so if we are having issues with particular airplanes we’ll have another we can bring in to replace it , rather than canceling. We do anticipate our level of revenue and service will improve,” said Grimes.

“By and large from response we are getting at public at large is that there is a feeling we are doing a better job at providing higher level of service, but it all depends at the end of the day on staff; they have to buy in on what you are doing and that it is important to them. It’s not easy to change attitudes.”

He emphasized that the airline will be focusing on expanding its international routes. Service into Freeport from six US cities – Memphis, Newark , Raleigh, Richmond, Baltimore, Birmingham, Cincinnati and Cleveland – will begin on May 1st with the goal of “jump starting” Grand Bahama tourism. The routes will be covered under an arrangement where Bahamasair will be subject to a seat guarantee by the Ministry of Tourism, by which it will be paid a certain amount per vacant seat to cover costs which will ensure it does not lose money on the venture.

“We are doing it under the auspices of the ministry of tourism. When you are starting routes its obviously more difficult to start them on a profitable basis and so yes you have some arrangements whereby it will not be done to the loss of Bahamasair.”

Ultimately the airline has it sights on potentially providing service from not just the east coast, but also the west coast of the US, including cities such as San Francisco, Los Angeles and Seattle, said Grimes, but this would require additional equipment.

“We’d need larger planes and planes with first class seats,” he explained.

In its statement regarding the outcome of its Article IV consultations in The Bahamas in late 2013, the International Monetary Fund (IMF) specifically mentioned the need for “envisaged reforms of state-owned enterprises, especially the Water and Sewage Corporation and Bahamasair (to) move forward to rein in subsidies and transfers” as part of a much-needed fiscal consolidation in The Bahamas.

CIBC FirstCaribbea