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Bahamasair executive: No knowledge of privatization talks

Managing director points to labor costs as airline’s biggest burden
Guardian Business Reporter

Published: Oct 17, 2013

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As reports surface that the government may be in the initial stages of the process to privatize Bahamasair, its Managing Director Henry Woods said he has received no indication of this but would support “a major reform” of the airline.

“The government or the board of directors have not shared with me any invitation that has been extended or any expressions of interest towards privatizing Bahamasair,” he told Guardian Business in an interview yesterday.

“I don’t know that the government extended the invitation, and I don’t know if anyone has approached the government, so I am dumb to that. I don’t know where they are getting this information.”

It’s no secret that the national flag carrier continues to be a financial strain on the government, costing an estimated $25 million to operate on an annual basis. The airline has incurred more than $500 million in losses since its creation in 1973. And as a result, Woods believes that reforming the airline is key to its survival.

Earlier this year, the Ministry of Finance mandated the airline to reduce its expenses by 25 percent in 2013 and 10 percent each year thereafter.

Woods maintains that labor costs are Bahamasair’s biggest burden. He said it’s an issue they’ve sought to address.

“Bahamasair is a $25 million a year burden to the taxpayers. In five years, this government would have pumped $125 million into Bahamasair. There has to be a change,” he said.

“We have been trying to reduce our head count through attrition, cut down on the amount of overtime and increase our in-house maintenance capabilities. So we have been doing a little here and a little there, but that’s not major reform. What needs to happen is a major reform of Bahamasair.”

It was back in September when Prime Minister Perry Christie suggested his focus may soon move to significantly reform Bahamasair.

Meantime, Woods told Guardian Business that he believes the government and the airline’s board of directors and executive management team will meet soon to discuss the prime minister’s plans further.

“He has not explained his approach to reforming Bahamasair to the board or me as yet, but I would imagine very shortly, we will sit with him and he will explain to us what he wants,” according to Woods.

“This is a national airline. The vision for this airline must come from the government, and they are the shareholders. The vision can’t come from the union, management or the board.”

His comments come as reports began to circulate this week in the media that the privatization process has already begun, a claim being made by the unions representing the airline’s employees.

A senior government official speaking with Guardian Business on condition of anonymity yesterday stated that no current discussions are underway with any company to take over Bahamasair, however the government is likely to try to “bring in a strategic partner” to turn around the struggling airline.

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