Above: a Bahamasair plane

By the Caribbean Journal staff

Bahamasair, the Bahamas’ national air carrier, is suffering from high labour costs, escalating fuel costs and a “commitment to unprofitable domestic routes,” according to Deputy Prime Minister and Works Minister Philip Davis.

The country has budgeted $20 million to support Bahamasair’s operation, Davis said.

“Its circumstances have been further compounded by competition from smaller local private carriers providing services to domestic routes and ongoing downward pressure on airfares in the Florida market due to competition by low-fare international carriers,” he said.

The Minister said that the government discovered after taking power in May 2012 that several industrial agreements between Bahamasair and local unions had expired, with pay shortfalls.

He said that the government had “moved very swiftly” to approve the funding necessary to satisfy the carrier’s obligations, and that the country had agreed to buy a third 120-seat Boeing 737-500 jet.

According to Davis, Bahamasair’s board is reviewing “adjustments to the business model” as a means of providing options.

In the second half of last year alone, Bahamasair incurred a net loss of $11.1 million.