In August 2023, we saw the launch of BermudAir, a quirky niche airline operating Embraer planes between Bermuda (BDA) and the United States and Canada. The airline has grown quite a bit — it now has a fleet of four jets, and serves roughly a dozen destinations.
When the airline launched, I was skeptical of the business model (let’s not even address how the airline almost instantly backtracked on being an all-business class airline). However, the airline has operated remarkably consistently over the past two years, so I thought that maybe this was an airline I was wrong about. Well, my skepticism has just returned…
Skyport sues BermudAir over unpaid airport fees
The Royal Gazette reports that Skyport, the operator of Bermuda’s LF Wade International Airport (BDA) is taking legal action against BermudAir, alleging that the airline has fallen behind on its airport fee payments, to the tune of millions of dollars.
The claim is that the airline is now “substantially behind” in payments on airport charges. According to a spokesperson, “after unsuccessfully attempting to work with BermudAir for over a year, Skyport has been forced to initiate a legal process to recover the significant owing balance and ensure payment going forward.”
The money owed largely consists of airport charges that the airline has reportedly been collecting from passengers, but hasn’t been handing over to the airport. Per a Skyport representative, “BermudAir has been collecting these charges for an extended period of time and not paying them over to Skyport.”
What’s pretty wild is that BermudAir has received roughly $700,000 in incentives and concessions for launching new service from the airport, and despite that, the airline still reportedly owes millions.
BermudAir issued the following statement in response to these allegations:
“We are in the process of resolving a number of commercial issues with Skyport. We remain confident that a resolution will be reached in the coming weeks as we have been engaging constructively and in good faith with the Skyport team. It is unfortunate that Skyport has chosen to publicly comment on a confidential commercial matter, which we believe is best handled through direct and professional dialogue.”
“We are proud to be a privately funded Bermudian enterprise that continues to thrive in a very challenging environment. We work with many strategic partners, of which Skyport is one, to provide a valuable service to the Bermuda community, creating new connections for business and leisure travellers, bringing new visitors to the island and driving job growth and economic prosperity.”
This is a very bad sign for BermudAir’s prospects
Let me of course emphasize that the above are only allegations. However, assuming all of this is true, this is a very bad sign. Once in a while you might see a dispute between a reputable airline and airport over a contract, or whatever.
But when you’ve an airline startup and you’ve been given $700K in incentives, and you still manage to get millions of dollars behind on airport fees at your hub airport when only having a tiny fleet (BermudAir recently expanded from two to four planes), that’s a red flag.
And it’s even worse when many of the fees due are those collected by the airline from customers on behalf of the airport operator, but then simply not remitted.
Of course you’ve gotta love how the airline is angry that the airport operator is making this “confidential commercial matter” public. You know, if you don’t get millions behind on airport payments, then stuff like this usually doesn’t become public.
This gives very strong Silver Airways vibes, which also suspiciously fell way behind on its airport payments, including at its biggest hub. Yet despite Silver Airways’ much larger size, the company never got that far behind on airport charges. Silver Airways ceased operations several weeks ago.
While I have no inside knowledge beyond what’s being reported by media in Bermuda, it sounds like BermudAir may have a reckoning sooner or later, especially if no resolution can be reached. One wonders if this might be part of the reason that the company is suddenly looking to open up a new operation in Anguilla…
This maybe also starts to explain why BermudAir has been launching so many routes. I suspect there are incentives for each new route launched.
Bottom line
The operator of Bermuda’s airport claims that BermudAir is millions of dollars behind on airport fees, including not remitting airport fees collected directly from passengers. The airport operator has been pursuing this quietly for over a year, and is just now going public. I can’t say I’m terribly surprised… let’s see how this plays out.
What do you make of this BermudAir situation?
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