Sky Bahamas (Nassau International) has denied it is at risk of having its Operating License (OL) terminated by the Nassau Airport Development Company (NADC), although it has confirmed it is heavily indebted to the Nassau International operator, Eyewitness News has reported.
The airline continues to operate as planned for the time being.
On July 23, a letter sent in late June by the NADC to Sky Bahamas was leaked online. In the document, the authority warned the carrier that it initiated proceedings to terminate its OL due to an accumulated debt of BSD454,000 Bahamian dollars (equivalent to US dollars).
Speaking to Eyewitness News, airline CEO Randy Butler confirmed the authenticity of the letter but underlined there is no reason to worry about Sky Bahamas' future. He added that since the letter was sent in late June, the parties have been slowly working through the arrears and the amount has been reduced.
"The amounts [owed] were going down. The thing is with this; in 10 years we've always, always owed NAD money. This is about fees and taxes, nothing to do with rent and lease. Those things are all current," Butler told the Tribune Business.
According to Butler, the debts arose mostly due to late payments to the airline from travel agents, corporate clients, and the government. The airline issues tickets with payments due in 30, 45 or even 60 days from the date of the sale, effectively crediting all these customers. However, under the law, Sky Bahamas is obliged to pay airport taxes, fees, and the Value Added Tax immediately. All these fees are included in the ticket price. Because of this discrepancy between the time the airline receives money to pay the fees and the deadline to settle them, Sky Bahamas is perpetually in debt to NADC.
"So, we bill out 30 days and some people bill out 45 or 60 days – of course the government pays when they’re ready – and we have to pay value-added tax (VAT) on the taxes and on the bills that are owed, we have to pay that. So, NAD has been good with us – with working out those times," Butler added.
He also suggested the letter might have been leaked for political reasons to damage the reputation of K P Turnquest, former Sky Bahamas chairman who is now the Deputy Prime Minister.
According to the ch-aviation capacity module, Sky Bahamas operates a total of 63 weekly departures out of Nassau Int'l to five domestic destinations, using one Saab 340A and one Saab 340B. It also owns one more Saab 340A which is currently stored.
