Re:  Proposed Modification to Airport Fees and Charges – Response to Comments

 

 

In accordance with article 4(8) of the Airport Authority (Fees and Charges) Regulations, 2009, the Nassau Airport Development Company (NAD) wishes to respond to the written comments received over the 45 day period following the July 1st, 2009 notification proposing to modify the Tariff of Fees and Charges, effective January 1, 2010.

 

The stated policy goal of the Government of The Bahamas, per the Airport Management Agreement, is “the Airport shall be developed and transformed into a premier world class facility and operate in a most efficient and commercial manner whilst remaining cost competitive�.  NAD is fulfilling this mandate with the redevelopment of LPIA in a commercial manner and has shown the currently proposed fee modification and forecasted future fee modifications to be competitive.

 

NAD is keenly aware of the current economic situation and like our airline partners has taken steps to reduce its operating and capital cost thereby reducing NAD’s reliance on aeronautical fee increases. NAD has reduced its annual operating expenses some 13% and its annual maintenance capital by 46%. NAD has also incorporated a number of cost savings and value engineering efficiencies into the Terminal Redevelopment.

 

The financial model includes the proposed increase of Fees and Charges in addition to increases planned for 2011, 2012 and 2013 followed by CPI type increases. These increases are not excessive and are aimed to eventually achieve a cost recovery of the services provided to the airlines. The gradual increases contained in the financial model are necessary for NAD to meet its operational needs and the financial covenants, including a debt service coverage ratio of 1.30 to 1.0, of the Terminal Redevelopment financing.