The Bermuda Government has recognised the need for airports and airlines to minimise the overall travel costs faced by passengers.

It was responding to remarks from an airline boss who warned about the impact high airport charges and taxes can have on passengers’ choice of destination, and therefore the willingness of airlines to serve those routes.

However, a spokesman for the Tourism Development and Transport Ministry said it was also important to recognise that airports need to raise revenue to pay for operating costs and infrastructure.

“Airports recover their costs by charging user fees to help pay for the capital-intensive infrastructure they need to have in place, such as terminal facilities, runways and taxiways, computer processing and baggage systems, navigational aids, airfield lighting, parking lots, and the like,” said the spokesman.

The comments were in response to a warning by Robin Hayes, chief executive officer of JetBlue Airways, about the tax burden faced by passengers and how this can influence where the airline allocates airlift capacity.

Mr Hayes highlighted the issue at the Caribbean Tourism Organisation’s State of the Industry Conference, in Curaçao, where he was a keynote speaker.

Bermuda raised its airport departure tax from $35 to $50 in March, and increased it again in August, taking the maximum total departure tax to $78, including a $16 airport improvement fee.

The Caribbean Hotel & Tourism Association (CHTA) created a graph showing Caribbean region destinations and listed them in order of ticket taxes and charges faced by passengers. Bermuda was the second highest, beaten only by Jamaica. The data was compiled from a sample of rates on the JetBlue.com website in relation to flights from New York’s JFK International Airport.

Mr Hayes said: “At JetBlue, we are very much thinking about the relative tax burden on our customers as we allocate capacity.”

JetBlue services link the Island with New York and Boston.

The Tourism Development and Transport Ministry spokesman said: “We are quite sensitive to any fee that passengers have to incur.

“Like airlines, airports have to recover their costs. Airlines do so by not only setting the price of their tickets up front, but also by charging ancillary fees for things like checked bags and ticket changes which last year, accounted for $38 billion in revenue.”

He added: “Whether it’s a small island nation with one or two million passengers per year, or a large city with 30 or 40 million passengers per year, an airport still requires the same basic infrastructure items that also happen to be the most expensive, such as the runway, taxiway, airfield lighting and the navigational aids.

“The smaller, island-nation airports unfortunately, have a smaller passenger base from which to recoup these costs. Hence, part of the reason why the per passenger cost might be higher than it would be at a major airport.

“But it is important that both airlines and airports continue efforts to minimise the overall cost of travel as much as possible.”

The CHTA said it was publishing the chart showing Caribbean region airports’ relative positions in relation to taxes and charges, in order to inform governments.

The organisation also highlighted the “open secret” that in the region airlines often request revenue guarantees from destinations before committing flights.

Bermuda has offered such guarantees for many years, and in the most recently published consolidated fund financial statement, dated March 31, 2014, reported it had signed agreements with three commercial airlines whereby it was committed to paying out an agreed sum if the airlines did not achieve either a certain level of revenue or specific profit on a particular route. As of March 2014, the Government had an estimated liability of $2.7 million in relation to such guarantees.

The CHTA said: “Hayes’ revelations are prompting some countries to re-examine their air transportation policies as it would appear to be counterproductive to add taxes to airline tickets making the destination less competitive then paying those taxes out again in revenue guarantees to attract airlines.”

Regarding Bermuda’s position on minimum revenue guarantees, a spokesman for the Tourism Development and Transport Ministry said: “It is becoming more of a prerequisite for island destinations to have to engage in minimum revenue guarantee agreements to secure and maintain air services.

“Fortunately for Bermuda however, we have reduced the minimal number of such arrangements and have instead, focused resources toward marketing and promotional efforts to support our air services. That is the more sustainable approach to take.”