SkyBahamas Chief Brands $454k NAD Debt As A 'Non-Issue'

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SkyBahamas Chief Brands $454k NAD Debt As A 'Non-Issue'

Unread post by bimjim » Tue Jul 24, 2018

http://www.tribune242.com/news/2018/jul ... non-issue/

Sky Chief Brands $454k Nad Debt As A 'Non-Issue'
NEIL HARTNELL Tribune Business Editor
Monday, July 23, 2018

Sky Bahamas' principal yesterday branded threats to terminate the airline's airport operating licence over a $454,000 debt as "a non-issue", and said: "Every other airline owes NAD money".

Captain Randy Butler told Tribune Business that he was one of the Nassau Airport Development Company's (NAD) "best payers" over the past ten years, after a series of letters detailing sums Sky Bahamas owes to the Lynden Pindling International Airport (LPIA) operator were leaked on social media.

Describing the letters' content as "normal", Captain Butler said the airline and NAD always "work through challenges" in their relationship, branding the outstanding debts as "a really fluid situation". He said the debts outlined in the NAD letter had already been reduced by the time he received it.

Confirming that Sky Bahamas continues to operate from LPIA as normal, despite the payment deadlines set by NAD having passed, Captain Butler said the letters showed that the outstanding sums had declined over the past six months.

He added that the privately-owned Bahamian carrier was current with its rental/lease payments, explaining that the debts detailed in the letter related to passenger facility and security fees it collects from passengers on NAD's behalf.

These fees - $15 for each - are included in ticket prices, and Captain Butler explained that the debts related to cash flow and timing issues, with Sky Bahamas' government, travel agent and corporate accounts given up to 30 days from billing to pay.

"It's a non-issue; it's a political issue," Captain Butler told Tribune Business of the letters' emergence, suggesting their leaking was intended to damage Sky Bahamas' former chairman, K P Turnquest, who is now the Deputy Prime Minister.

"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. This has to do with the facility fee and security fee.

"What happened is travel agents, corporate entities that have accounts with us, they're on a 30-day cycle. Most of them are very good, and in 15-30 days out we remit the funds. The letter was written, and NAD and I continue to work. For years, years and years there's always been issues, and I've always paid them over the past 10 years."

Captain Butler said NAD also operated on a 30-day payment cycle, and added that by the time he received its bills and Sky sent out its own, there were "already 60 days" in the payment cycle.

Some observers, though, will likely accuse the Sky Bahamas principal of seeking to downplay and minimise the letters' content, with the Government's political opponents quick to seize on them to attack Mr Turnquest over recent aviation industry tax concessions granted since he took office.

However, the sums owed by Sky Bahamas - $621,691 as at January 9, 2018, and $454,015 at June 29 this year - certainly pale in comparison to the debts that Bahamasair, the state-owned airline, owes NAD.

The so-called national flag carrier, according to NAD's 2017 annual report, owed the LPIA operator some $3.874 million as at June 30 last year. That sum is more than six times' higher than Sky Bahamas' debt in January this year, and had increased by 30 per cent or almost $1 million year-over-year.

The first letter to Captain Butler, written by Paula Rigby, NAD's vice-president of finance and chief financial officer, warned that Sky Bahamas' licence to operate at LPIA was "now pending termination" because the airline's "account remains in arrears" despite numerous letters, phone calls and e-mails being sent.

Pegging this debt at $621,691, Ms Rigby's January 9, 2018, letter set out a payment plan to bring Sky Bahamas current. This involved the airline paying $12,500 weekly until "outstanding amounts are paid in full", and current aeronautical charges being paid within 30 days of invoices being received.

The second letter, more threatening in tone, shows Sky Bahamas had reduced its accounts payables balance owed to NAD by 27 percent at June 29, cutting it to $454,015. Referring to the payment plan, Ms Rigby detailed the sums due despite "NAD's attempt to work with your company to reduce the large outstanding balance".

Apart from the $114,887 due under the earlier payment plan, Ms Rigby said $239,612 in arrears was "due immediately" and another $99,516 due by July 11.

"As significant attempts by NAD to assist you in reducing your outstanding balance have failed, Sky Bahamas therefore has left us with no alternative but to commence the termination process of your operating licence as per Article 9," Ms Rigby wrote.

"Failure to remit payment of $239,612 by July 6, 2018, and $99,516 by July 11, 2018, will result in the termination of your agreement, the removal of all signage, and the cancellation of your operating licence. Sky Bahamas will no longer be allowed to operate within the LPIA terminals."

Captain Butler, though, told Tribune Business that "there's nothing abnormal" about the situation, with Sky Bahamas continuing to operate from the LPIA terminals despite the letter's payment deadline having passed.

"I'm not worried. We continue to operate," he said. "There's more of that that has been paid. We've been paying every week on that. By the time we got that letter the numbers had already changed.

"The amounts have been going down. We have a very good relationship with NAD. Sometimes there are challenges and we sit and work the challenges out. It's trying to get people to pay. The money's coming in constantly. It's not like we're not paying. We're moving thousands of people every month.

"Every other airline owes NAD money. NAD owes people money, too. It's a very fluid situation. We work through these things all the time. This is normal," Captain Butler continued. "In 10 years I've always paid them [NAD], and they'll tell you that I've been one of their best players.

"I have to stay focused on running the best airline, the preferred airline of the Bahamas, and taking care of the employees and folks that support us."

Captain Butler said Mr Turnquest was "no longer" Sky Bahamas' chairman, and nor did he have "an interest in the airline".

Bradley Roberts, the former PLP chairman, was yesterday quick on to the attack over the NAD letters and Mr Turnquest's connections to Sky Bahamas, implying that the airline was continuing to operate at LPIA thanks to its political connections.

He described Sky Bahamas as "sinking faster than bricks in quicksand", and suggested previous duty-free concessions on aircraft maintenance parts for Bahamian-owned and registered planes, together with the removal of 10 percent Customs duty, were designed to help the airline.

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