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High airport fees may be ‘devastating’

PLP Town Hall Meeting on airport privatisation at Warwick Workingmen's Club. Pictured is shadow transport minister Lawrence Scott. (Photograph by Akil Simmons)

A warning by the chief executive officer of JetBlue that high airport charges are a major turn off for airlines could be “devastating” for Bermuda, according to Lawrence Scott, the Shadow Minister of Transport.

Robin Hayes told a Caribbean tourism event in Curaçao late last month that high airport taxes and charges could dissuade passengers from flying to certain destinations, and in turn be a disincentive for airlines to serve those routes.

Mr Scott, who is also a member of the JetBlue management team in Bermuda, said Mr Hayes’s comments supported the Progressive Labour Party’s opposition to the $250 million airport redevelopment plans.

“Ironically, the executive’s observations leads one to conclude that the OBA’s new airport plans, which will commit Bermuda to spending roughly $250 million dollars, has the potential of reducing, not increasing, airlift to the Island,” he said.

“This airline executive stated that countries like Bermuda are less attractive to airlines in regards to introducing, expanding or increasing airlift than those with more competitive tax levels.

“This is consistent with comments I made on the floor of the House of Parliament in March which warned the Government about the impact of increasing departure taxes from $35 per person to $50 per person, and again by an additional $20 per person two months later.

“The Government were dismissive of my advice.”

This year the Bermuda Government has increased airport taxes and charges faced by passengers. In March, the departure tax was raised from $35 to $50. In August there was a further hike that has taken the maximum total departure tax to $78, including a $16 airport improvement fee.

On a list of the highest ticket taxes and charges faced by JetBlue passengers flying from New York’s JFK International Airport to a selection of Caribbean region destinations, Bermuda ranks second behind Jamaica.

Mr Scott said: “The executive’s observation is devastating — arguably for the next 35 years we will be spending more to sustain the airport contract and as a consequence less and less attractive to both airlines and air travellers.

“The OBA plan to develop a new airport locks us in to a formula of spending which will hurt, if not kill, our ability to compete for customers, according to the revelations of Mr Hayes.

“Returning to what I said on the floor of the House in March before the country was committed to penalty phase of the airport redevelopment was that increasing airport taxes and fees could significantly hinder our competitive advantage as a country by effectively pricing ourselves out of the market.”