Minister says oversupply led to Sky GB pull out
An oversupply of seats into Grand Bahama coupled with high airport fees are what likely led to Sky Bahamas’ pullout from that market, Minister of Tourism and Aviation Dionisio D’Aguilar said yesterday, explaining that the demand for airlift to Grand Bahama, both local and foreign, is likely low.
Despite Sky Bahamas’ departure, D’Aguilar told reporters the Grand Bahama route, which is serviced by Bahamasair and Western Air, will continue to have enough airlift to satisfy the demand.
D’Aguilar said Sky Bahamas’ executive explained to him that fees at the airport had become restrictive, and that the route simply no longer made sense for the company.
“I spoke to the owner Randy Butler and he articulated to me that in his opinion the cost structure had become quite onerous, and given the substantial competition in that market, [that is] Bahamasair, Western Air, that just wasn’t economically feasible for him to continue to provide a service into Grand Bahama, and he decided to stand-down his operation,” D’Aguilar said.
D’Aguilar cited fees associated with wheel chairs, baggage handlers and parking as those that contributed to Sky Bahamas’ decision to eliminate the Grand Bahama route from its schedule.
Grand Bahama’s airport is owned privately through a joint venture between the Grand Bahama Port Authority (GBPA) and Hutchison Whampoa.
When asked if there was anything government could do to intervene, D’Aguilar explained that because the airport is privately owned government could only encourage GBPA and Hutchison not to charge restrictive fees.
However, D’Aguilar said the economic scale of supply and demand likely led to Sky Bahamas’ decision to pull out more than anything.
“The service was withdrawn because there wasn’t sufficient demand,” he said. “There was too much competition in that route and the weakest one probably fell.”
D’Aguilar said while Grand Bahama needs help with regard to airlift, the island needs to increase its inventory of rooms and drive more foreign visitors to the island.
“We’re optimistic something is about to happen,” he said.