Senators Clash on $2 Million Airline Incentives
Senators Bean and Dunkley have not surprisingly taken opposing sides after the revelation that Government paid out almost $2 million to airlines over the past three years.
The funds were paid after airlines failed to meet their revenue targets on the Bermuda routes. Airlines receiving subsidies include US Airways and low cost carrier Jet Blue.
UBP Senator Michael Dunkley said the UBP is not opposed to the use of taxpayer dollars to secure needed overseas flights, but pointed out that a stronger marketing focus might have been more financially prudent.
PLP Senator Marc Bean, who coincidentally is a FAA certified commercial pilot, pulled no punches saying that Senator Dunkley’s statement “demonstrates a rare combination of ignorance and arrogance”.
Both Senators statements are printed in full below.
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UBP Senator Michael Dunkley’s full comments:
Taxpayer cash not the Premier’s charm appears to be the secret behind Bermuda’s ability to secure more flights from North American cities, government answers to Parliamentary Questions reveal.Bermuda Government guarantees in recent years have seen the spending of approximately 2 million taxpayer dollars to keep airlines flying to the island.It is quite possible that the dollar figure is even higher given that some of the Minimum Revenue Guarantee Agreements (MRG) may not have been paid out prior to the answering of our questions. We are also interested to learn that WestJet Airlines is operating with an MRG, which has not yet been approved by the Cabinet. It appears that Minister has prematurely committed Bermuda to the terms of an agreement not yet sanctioned by his Government – shades of the Uighurs.
On one level, we are not opposed to the use of taxpayer dollars to secure needed overseas flights, but feel compelled to make the point that a lot of this money did not need to be spent if the Tourism Minister had maintained a strong marketing focus on our longstanding US tourism markets.
We recall the 2008 Yankelovich study which found that just 10 percent of our potential visitors were aware of Bermuda as a vacation destination. This shocking finding did not happen overnight but reflected years of PLP neglect of core markets.
The falloff in awareness of Bermuda as a vacation destination made it necessary at this time for the Bermuda Government to guarantee airlines minimum revenues.
So tax dollars spent to ensure airlines fly to Bermuda is a consequence of the government’s failure to maintain Bermuda’s profile in markets that had sent the lion’s share of visitors to our shores year after year, generation after generation.
We do not disagree with Minimum Revenue Guarantees if they act as an incentive for Bermuda’s marketers to drive the number of visitors to our shores ever upward.
We are acutely aware that the price of an airline ticket is a big factor for most travelers.
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PLP Senator Marc Bean’s full comments:
Senator Dunkley’s most recent statement demonstrates a rare combination of ignorance and arrogance.For the record, Sen. Dunkley must be the only politician in Bermuda who didn’t know that the Government uses financial incentives to attract new airlines to Bermuda. He should also know that every MRG is approved by Cabinet.
At the last Senate meeting, Sen Dunkley acknowledged the value of the hard work manifested by the Premier and his Ministry’s team in securing affordable airlift to the island. Even in giving credit where it is justly due, Sen Dunkley exhibits a lack of knowledge on the standard operating process by which such airlift is secured. A MRG is an integral part of our strategy to provide incentives in this regard. Sen Dunkley must understand that Good Faith is the centrepiece in executing an agreement for mutually beneficial purposes. It is for this reason that Westjet has began the marketing and selling of seats, while the standard process of Cabinet approval of the MRG is conducted.
I’m am sure that the travelling public will appreciate an affordable option to Canada. What would be useful for Bermudas Tourism industry is if Sen Dunkley, as the Shadow Minister, commits himself to being an active participant in the Industry’s rebound, rather then speaking as a spectator.
Sen. Dunkley is right about one thing—it is not only the Premier’s charm that has brought great airlift to Bermuda but the combination of intelligence, hard work and diplomacy!
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