NASSAU, BAHAMAS — The Bahamas is estimated to have collected nearly $43 million in airspace fees for the 2022/2023 fiscal year, a sum which is expected to be higher based on the faster-than-expected recovery in air traffic movements according to Deputy Prime Minister Chester Cooper.
Cooper, the Tourism, Aviation and Investments Minister, gave a communication to Parliament yesterday on the complaints by airspace users over this nation’s overflight fees.
He noted that in April 2021, an air navigation services agreement was signed with the US Federal Aviation Administration (FAA), under which the FAA agreed to continue to deliver air navigation services in respect of approximately 75 percent of The Bahamas’ upper airspace, at no cost.
Cooper noted that the FAA instead elected to charge an annual fixed administrative fee of $80,000 to cover the provision of aircraft track data used by the Bahamas Air Navigation Services Authority (BANSA) to produce billing invoices. He said that the execution of this outsourcing of Air Navigation Services to the US recognizes The Bahamas’ current inability to provide these services and the expressed intent to build capacity over the coming years to enable it to provide these services directly. The third key agreement was executed, in July 2021, with the International Air Transport Association (IATA) to provide collection services for the new aviation fees.
According to Cooper, for the fiscal year 2022/23, airspace fees under the scheme were estimated at $42.925 million—although it is expected to be higher based on the faster-than-expected recovery in air traffic movements. Between May 2021 and November 2022, fees invoiced under the airspace scheme totaled $49.693 million—of which $44.693 represented overflight fees; $4.452 million origin/destination fees, and $1.329 million was for the passenger levy. Total fees collected through November 2022 is $42.682 million, with receivables at $6.463 million.
In December, eight US airlines – including American Airlines Group, Atlas Air Worldwide Holdings, Delta Air Lines, FedEx, JetBlue Airways, Southwest Airlines, United Airlines, and United Parcel Service – filed a joint complaint through Airlines for America, claiming that the government’s overflight fees were unjust, discriminatory, anticompetitive and unreasonable.
They alleged that The Bahamas is levying “astronomical charges” for air navigation services that exceed the costs to The Bahamas of providing those services by millions of dollars. The airspace fees announced in May 2021 were $1 per arriving and departing passenger for all airspace users that land and take off from Bahamian airports and fly within Bahamian airspace; plus a flat fee of $10 up to $61 for each flight, depending on the maximum take-off weight (MTOW) of the aircraft.
In February, the US Department of Transport issued an order denying the complaint against The Bahamas, indicating that it cannot conclude that The Bahamas’ fee structure constitutes unjustifiable or unreasonable discrimination.
“However, the DOT has expressed its intent to pursue its cost-basis concerns under the terms established in the US-Bahamas ATA—which the Government agrees is the appropriate forum for these discussions and consultations,” said Cooper.
He added, “The government remains committed to achieving a successful resolution of all continuing concerns with the cost basis analysis for our overflight fees. We are keen to protect The Bahamas’ sovereign rights to recover the level of fees necessary to provide air navigational services to our airspace users, which should include building out both the human and infrastructure capital necessary to eventually take control of the management of our airspace. Our intention is also to ensure that The Bahamas’ fee charging scheme is compliant with ICAO principles. We have already received a formal request from the US DOT to commence formal consultations under Article 13 of the US-Bahamas ATA. Our intention is to move quickly to formalize consultations, along these diplomatic channels, to reach a satisfactory conclusion to these issues at the earliest. In fact, the first meeting is already scheduled to be held mid-April.”
And yet they still think taxing the middle class into oblivion is a great idea???