The financially-strapped Bahamasair lost $86 million between 2000 and 2002, Works and Utilities Minister Bradley Roberts revealed in the House of Assembly today.
Minister Roberts, who tabled the audited financial statements for the airline for fiscal years ending June 30, 2001 and June 30, 2002, pointed out that revenue was virtually flat while operational expenses increased by $7.3 million from fiscal year 2000 to 2001.
New union contracts resulted in the airline paying out $3.7 million in salary back pay and anomaly adjustments, according to the airline’s financial report.
“Over and above the $7.3 million deterioration in operating expenses there was an additional $4.8 million in interest and penalty costs relating to the IRS and INS debt,” Minister Roberts said. “This debt was consolidated with the actual taxes outstanding of $15 million and financed by the tune of $20 million through a loan from a consortium of local banks led by Royal Bank.”
A year later, he said revenue declined by $7.2 million due to the after effects of the September 11, 2001 terror attacks on the United States.
He said operational expenses on the other hand improved by $10.3 million.
This was comprised primarily of a reduction in staff costs of $4.2 million; reduction in wet lease costs of $2.5 million; a reduction in the reservations host system and consultancy costs of $2.8 million; an increase in depreciation of $2.1 million; and increase in aircraft insurance of $1 million. “While there are a number of extraordinary one timers in the expenses, the indisputable truth is that the net losses have continued to escalate totalling $86 million for the three year period 2000-2002,” Minister Roberts said.
The independent auditors’ reports by Deloitte and Touch are dated Tuesday. “The fact that I am tabling these reports today speaks volumes to this government’s commitment to this parliament and the Bahamian people in providing information on a timely basis,” Minister Roberts said.
He said he plans to communicate to parliament next week the government’s programme on the way ahead for the national airline.
He also told House Members that Bahamasair has not yet acquired any additional aircraft.
Minister Roberts said last November that Bahamasair at that time carried on its books approximately $35 million in dormant government payables and $37.6 million in non asset based bank debts such as loans for the settlement of U.S. taxes.
At the time, he also pointed to continued overstaffing at the airline. Last November, Bahamasair’s staff count stood at 716 persons. It was the board’s recommendation that that figure be reduced by 150 persons, bringing the headcount down to 564 persons.
The Bahama Journal
