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$8.5 million Government guarantee payment to Skyport

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L. F. Wade International Airport (File photograph by Akil Simmos)
Lawrence Scott, the Minister of Transport (File photograph by Akil Simmons)

Almost $8.5 million was handed over by the Government to Skyport in the latest minimum revenue guarantee payout, the House of Assembly heard yesterday.

Lawrence Scott, the Minister of Transport, told MPs that airport operator Skyport gave the Bermuda Airport Authority notice last month of the shortfall between the “actual airport regulated revenue” and the “guaranteed minimum regulated revenue” from July 1 to September 30.

The amount totalled $8,451,053.

Mr Scott said: “Earlier this year, I advised the house that the project agreement contains a predetermined payment schedule of the minimum revenue guarantee amounts for each calendar quarter of the 30-year contract.

“The Government continues to honour its obligations in this regard, including making this latest minimum revenue guarantee payment …”

He added: “To date, we have made five MRG payments to Skyport totalling $40,964,566.74.”

But Mr Scott said: “Although we are trending in the right direction, meaning each consecutive payment has been lower than the previous one, even with the increased air routes and passenger traffic resulting from our new air service development strategy we anticipate that minimum revenue guarantee payments in 2022 could be over $10 million.”

The Bermuda Tourism Authority announced last night that 33,277 visitors came to Bermuda by air in the third quarter of 2021 compared to 8,296 in the same period a year earlier.

But in 2019, before the pandemic, there were 89,178 air visitors to Bermuda. The figures do not include travel by residents.

Mr Scott also gave a breakdown of what the money could have been spent on if it was not needed for minimum revenue guarantee payments.

He said that the cash could have subsidised two flights a week for a year from Boston and Baltimore to provide “consistent connectivity for Bermudians needing off-island medical care”.

Mr Scott said: “We could have then done three times per week a service to Miami, which would have helped the Bermuda postal service expedite and streamline their … transportation of overseas mails and packages.

“That could have also been done for the year.

“We could have then also subsidised twice a week service to and from the Caribbean, which would have put us into a new market with new revenue streams or even new supply chains, which could have helped the young entrepreneur and/or small business owners.”

The minister said that the air services listed would have cost about $15 million.

He added that another $4 million could have been spent on 30 electric buses or to retrofit a ferry to increase services and take congestion off the roads – priced at $3 million – and the “much needed” ferry service to St George for $1 million.

* To read the minister’s remarks in full, click on the PDF under “Related Media”.

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Published November 13, 2021 at 7:37 am (Updated November 13, 2021 at 7:37 am)

$8.5 million Government guarantee payment to Skyport

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