Long Term Russian-Ukraine War Will Effect Bermuda’s Civil Aviation Revenue

Transport Minister Discusses Russian Sanctions
According to the Honorable Minister of Transport Lawrence Scott, JP, MP, the many sanctions currently being imposed on Russia as a result of the ongoing war in Ukraine will have a direct effect on around 200, or 22 percent, of all aircrafts that are registered in Bermuda.

According to Minister Scott, Bermuda will not see a financial impact of these aircraft sanctions unless they continue for three months, at which time a five million dollar impact is anticipated. If these sanctions continue for a year, Minister Scott predicts, a maximum impact of $25 million is predicted.
Minister Scott confirmed that the Bermuda Civil Aviation Authority is not funded by the Bermuda Government’s tax dollars and that the Government receives whatever is left over after the BCAA’s operating expense is subtracted from their gross revenue.
“ [The Government] budgeted $17 million for BCAA revenue and aircraft registry for this fiscal year,” he said.

In the Minister’s opinion, summer air service to the island is looking somewhat promising but not close to 2019, pre-pandemic levels. Three spikes are predicted for the season: Hero’s Day Weekend, CupMatch and Labor Day.

“ We are still going to need a minimum revenue guarantee for Skyport which we anticipate is going to be around what we budgeted ( $11 million for the year),” he said. “Our current bed count [with the island’s two largest hotels being temporarily closed down] is around 1,500-2,000 beds. This contrasts with the Turks and Caicos islands, who have around 4,400 beds. Airlines look at how many tourists they can accommodate at any given time and allocate the air service based on that.”

“ TheMinistry of Transport is looking to strengthen the stronger-than-projected cruise ship season and those visitor arrivals to help offset the lower than traditional numbers for air routes,” Minister Scott continued.
His Ministry’s budget is scheduled to be debated in the House of Assembly on Wednesday March 16, during the afternoon session. Some of the things that will be discussed will be lowering the learning age for students enrolled in Project Ride as well as for car learning permits, $4 million in air service development to ensure that Bermudians needed medical care can fly to and from Boston (which the Minister says the airport authority is already aggressively pursuing) and an expected $103 million from this year’s upcoming cruise ship season; to ame just a few.

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