By DENISE MAYCOCK
Tribune Freeport Reporter
FREEPORT -- Grand Bahama Airport Company is taking "swift and decisive action" to reduce aviation fuel costs and prevent international carriers from terminating services to the island, as some airlines incur $1 million in per annum fuel costs due a price 240 per cent higher than Nassau's.
Vernice Walkine, director-general of tourism, confirmed that some airlines flying to Grand Bahama were incurring $1 million in fuel charges yearly, and had threatened to withdraw services because of the high jet fuel costs at Grand Bahama International Airport (GBI).
In January 2010, Grand Bahama's aviation fuel charge was 240 per cent higher at the pumps when compared to Nassau, Ms Walkine revealed at the 12th annual Grand Bahama Business Outlook. Jet fuel costs for carriers reached $5. 41 per gallon in Freeport, compared to $2.26 in Nassau.
"This much-widened gap in the fuel cost at GBI has placed us on notice of withdrawal of service, if fuel costs do not match those in Nassau, which is already some 40 cents per gallon or 15 per cent higher than their system average, which they are willing to absorb for an international route," she said.
Ms Walkine noted the fuel charges, when related to automobile fuel charges, would equate to a pump price of $4.35 in Nassau, and an astounding $10.44 cents per gallon in Grand Bahama.
"To compare further, this adds up to $1 million per year in their fuel charges on a route where regional jets are deployed, like GBI's Delta and US Airways flights when compared to Nassau, and when compared to their Florida routes (same flight distances where fuel charges are significantly lower)," she added.
The tourism official warned that a margin approaching $1.5 million in an industry that is losing billions per annum and cutting every possible dollar of excess cost will not be absorbed for long.
"If swift and decisive cost reduction measures are not taken within days, we will see the end of certain services within 35 days. So I am happy to report that swift and decisive action is being taken by our partners at the Grand Bahama Airport Company, and we will see a significant reduction in the cost of jet fuel within the next few weeks," Ms Walkine said.
"We must accept that no customer, and certainly no airline, is willing to pay a huge premium over Nassau's cost to fly into GBI.
"So when this imbalance exists, Grand Bahama simply loses its ability to compete for both the services, in the first instance, and when the service exists, our high carrying cost prevents our fares from being as attractive as those elsewhere, including Nassau."
The director-general revealed that overall tourism figures indicate that the Bahamas attracted about 4.65 million visitors in 2009, an increase of 6 per cent above the previous year.
She said the increase has been due mainly to the resurgent cruise sector.
"The cruise business is so strong that we expect mega cruise ships like the Carnival Dream and the RCCL Oasis of The Seas to spearhead increased arrivals of somewhere around 15 per cent over the first six months of 2010. Air arrivals, we expect, will increase at a slow rate, probably in the neighborhood of 2 per cent," Ms Walkine said.
However, she noted that Grand Bahama is not reflecting the flattening out fourth quarter performance that Nassau/Paradise Island has experienced, followed by growth in the first quarter of 2010.
"Instead, the island's declining trend steepened in the fourth quarter and shows no sign thus far of flattening or rebounding in 2010. Grand Bahama leads the Bahamas in that regard," she added.
Despite this projection, Ms Walkine believes Grand Bahama has great future potential. She said the island's proximity to Florida offers great advantages and wonderful opportunities for the cruise sector.
Ms Walkine believes the introduction of the Bahamas Celebration Cruise Line, which will sail exclusively to Grand Bahama from West Palm Beach beginning on March 15, will be beneficial.
"This cruise ship has the capacity to carry a large number of vehicles that can simply drive on and off the ship, and we are exploring with them the opportunity for a 'Drive to the Bahamas' thrust," she added.
Ms Walkine said this would allow visitors to truly explore the island and bring the kind of tourism benefits that American visitors have always given to Mexico and Canada when they drive across borders.
"None of our competitors enjoys such an advantage. Indeed, no other island in The Bahamas can enjoy such an advantage. We intend to work with all stakeholders, including our partners at Freeport Harbour Company, to make this happen in the shortest span of time," she said.
