Airport's $8-million operating deficit in less than one year.

The plans, revealed to The Royal Gazette yesterday by Transport Minister Wayne Furbert, include: Sharp hikes in landing fees which are expected to raise nearly $4 million a year, up from about $230,000 under the old US Navy rates; Charging the airlines for Customs pre-clearance services, raising another $500,000; Improving and enhancing food, beverage, and retail services at the Airport to hike concession revenues by $600,000; Opening three duty free shops at the Airport -- two in the departure area and one in the arrival's lounge, as part of the concessions plan; and Opening an "executive lounge,'' where business people can relax, use a telephone or fax machine, or even a computer.

Mr. Furbert said the new fees are based on the "user pay'' philosophy.

Airlines serving Bermuda "didn't jump for joy, but they understand Government's position'', he said.

While Bermuda's Airport charges were "still on the low side,'' Mr. Furbert said Government had "now reached a stage where we feel they are in the ballpark of paying their fair share''.

By the end of this century, he hopes the Airport will be breaking even or turning a profit.

Creating the new shops and food outlets, combined with other terminal improvements, will cost less than $5 million, most of it to be spent in 1996, Mr. Furbert said. All the work is to be completed by November of 1997.

The changes are part of a plan recommended by a team from YVR International, which runs Vancouver International Airport and has sent Airport general manager Mr. Jack Gordon and other officials to Bermuda under contract.

The US Navy, which ran the Airport free of charge since the Second World War, pulled out of Bermuda and turned it over to Government in June.

Landing fees, which under the Navy had languished for years at 30 cents per thousand pounds, will rise in stages to $3.25 per thousand pounds -- representing a negotiated increase of more than 1,000 percent.

The fees increased to $1.30 per thousand pounds on June 1 and to $2.80 per thousand pounds on September 1. Next April 1, they will rise to $3.25.

Bermuda has not charged for US Customs pre-clearance in Bermuda, but Mr.

Gordon said pre-clearance benefits the airlines in several ways.

It allows flights arriving in the States from Bermuda to dock at domestic terminals, instead of international ones, allowing for quicker turn-arounds for aircraft and faster connections for passengers, he said.

Bermuda will introduce a charge of 48 cents per passenger as of January 1, then add another 48 cents per passenger on January 1, 1997, Mr. Gordon said.

The money, expected to total about $500,000 a year, will offset cleaning, maintenance, electricity, and other costs Bermuda incurs for the pre-clearance area, he said.

Mr. Gordon said fees at Bermuda International Airport are still well below those in other places.

For a Boeing 767 to land in Bermuda and take off will cost $1,636 as of September 1, he said. The comparable charges would be $4,817 in Barbados and $6,424 at Montego Bay, Jamaica, he said.

Total fees include terminal fees. Bermuda charges $1 a passenger, and that fee is not being increased at this time, he said.

Other changes are intended to encourage passengers to spend more money at the Airport, Mr. Furbert said.

A new bar, better food selection, and an improved retail area are all in the works, he said. An executive lounge which would be operated on a membership basis is also planned.

Mr. Furbert said three concession contracts are planned -- one for duty free, one for food, beverage and retail, and one for the executive lounge. By taking a share of the revenues, Government could raise $900,000 a year, compared to about $300,000 under the present contracts, he said. One duty free shop would be in the international departure area, one in the US pre-clearance area, and one in the arrival hall.

With the exception of Bermuda, "we're not aware of any airport that has direct international service in North America or the Caribbean that doesn't sell duty free at the Airport'', Mr. Gordon said.

Mr. Furbert said most Airport purchases are made on "impulse,'' so merchants in Hamilton and elsewhere in Bermuda should not be affected by the changes.

They will also have the chance to bid to operate the concessions, he said.

He said he would meet with the Chamber of Commerce and north Hamilton area merchants to explain the plan and its business opportunities.

Those who win the Airport concessions will be expected to contribute toward the capital improvements at the Airport, Mr. Gordon said.

Long-term parking charges to be introduced in 1996 are also expected to enhance revenues.

Mr. Furbert said plans for an Airport Authority to manage the facility are on hold for now.

"We have a good team which is looking at all the aspects that an authority would have looked at,'' he said. "I'm quite satisfied with the progress without an authority in place.

"As time goes on, we will probably move in that direction.''