Thursday, December 17, 2015

Adrian Gibson: What Is Going On Inside Bahamasair?


A select  committee of the House of Assembly, along with an investigatory body of private citizens and government representatives, must be appointed to investigate the goings-on at Bahamasair.

To use the words of Bradley Roberts, current Progressive Liberal Party (PLP) chairman and then PLP MP for Grants Town, in a 2001 address to the House, such committees are needed to “look into all the matters relating to the operations at Bahamasair Holdings Limited with powers to send for persons and papers with leave to sit from place to place and with leave to sit during recess.”

This week, the Court of Appeal overturned a $3.5m damages award to Bahamasair, finding that the airline had failed to install an upgraded part that may have prevented a 2007 crash landing. Appeal Justice Jon Isaacs, in a written judgment supported by his two colleagues, found that former Chief Justice Sir Michael Barnett’s ruling against Canadian firm Messier-Dowty was “unreasonable and cannot be supported by the evidence”. Justice Isaacs said Messier-Dowty had informed Bahamasair about its new, upgraded “damper rind” and upper bearing, but the national flag carrier had continued to use an old part – one that had ceased to be manufactured since 1998.

Further, Justice Isaacs found it was fair for the Canadian company to “assume that the end user will not so abuse or misuse his product” such that it wears down more quickly than expected – a development that does not mean the product is defective.

Justice Isaacs criticized Bahamasair’s failure to produce the Maintenance Control Manual (MCM) that was used by Bahamasair’s employees to replace a cylinder on the crashed aircraft’s landing gear on May 19, 2006. He ruled that that document would have been “crucial in assisting a tribunal to determine whether or not the respondent (Bahamasair) was carrying out the requisite maintenance properly” and he went on to state that the “appellant (Messier-Dowty) was unduly hamstrung by the failure of the respondent to produce the MCM and, ultimately, an omission which may have proven fatal to their counterclaim.”

The case arose from the January 18, 2007, crash of a Dash-8 aircraft at Governor’s Harbour, Eleuthera. The Court of Appeal judgment asserted that Bahamasair misinterpreted the warning signs before the crash and stated that “it is likely that had (Bahamasair) conducted the extension test by jacking up the aircraft as recommended by the appellant’s manual as soon after five cycles as possible, the emerging problem would have been discovered and rectified”.

The ruling asserted that Bahamasair negligently decided “to continue using a ring it ought to have known was no longer being produced since 1998.” Since 1998! Unthinkable!

Following this ruling, one is left to wonder about the safety procedures at Bahamasair and, given the questions I asked last week about the new ATR planes and the expertise of the persons who will be flying them, we are left to question their general maintenance of the current aircraft in its fleet.

Is Bahamasair current relative to industry technology?

Where are the regulators?

Can the travelling public repose confidence in the management and directorship of Bahamasair to ensure that we are safe, that aircraft are properly serviced and staffed by qualified pilots and flight attendants?

Is Bahamasair so cash-strapped that it cannot buy parts or simply doesn’t care to install them?

Is the situation so bad that they can’t ensure the safety of people?

Bahamasair, which received a subvention of $14.8m from the government this year, is - yet again - claiming to have suffered loss. The colossal losses suffered by taxpayers as a result of the failed Bahamasair experiment, from its launch to present day, exceeds $500m. That is unbelievable, unacceptable! Bahamasair must now be allowed to sink or swim or simply be sold off.

Under the Free National Movement administration, former Acting Managing Director Arthur Bennett Jr announced during the 1996/1997 fiscal year that Bahamasair was on target to reduce its annual losses by 50 per cent in 1999. Mr Bennett also projected a profit. Of course, in 1999, it was announced that Bahamasair lost $17m!

At present, the national flag carrier is on the cusp of industrial action by the Airport, Airline and Allied Workers Union (AAAWU).

To be frank, the airline must be right sized and certain managers – including the Managing Director Henry Woods – must be fired or retired. How can an airline with six or seven aircraft sustain 600 or more employees, many of whom are political cronies hired by politicians after a victorious election cycle? In order for Bahamasair to progress, the political interference in the day-to-day management of Bahamasair must cease; Bahamasair must be privatized or its stock sold to employees and the wider public; it should be directed to fly only the most lucrative local routes and it must take on more routes along the eastern seaboard of the United States.

Over the years, Bahamasair has been plagued by corruption. The August 18, 1995, Report of the Commission of Inquiry into Bahamasair revealed the managerial ineptitude, corrupt practices, unprofessional and political interference that plagued Bahamasair for many years.

When one reads that report today, what is stunning is that Mr Woods – who was then fired from Bahamasair and found in questionable circumstances – is today the Managing Director of Bahamasair.

According to that report: “Mr Woods, a qualified Aircraft Engineer, worked with Bahamasair from June of 1973 to November of 1992, becoming Director of Operations in August 1987 and Executive Director of Maintenance and Engineering in 1990.

“Mr. Woods was involved in a matter which led to the impounding of a B-737 aircraft on its arrival at Nassau in 1987 from Miami. Mr Woods explained the circumstances whereby the flight had been delayed, causing him to remain at the airport until 5am in order to ensure that the aircraft would be serviced immediately. The General Manager had asked him “at the time ... to give me a hand to transport some items to the house. I agreed.” Mr Woods proceeded to give details of the incident involving the import of uncustomed goods by that aircraft, a matter which he claimed no knowledge beforehand and in which he stated that he was not guilty of any wrongdoing whatsoever, and had not been questioned by Customs. The outcome was a demotion to Chief Engineer and a salary cut of $1,000 per year,” the Commission wrote.

They went on to say: “Mr. Woods’ explanation of the three important aspects of this matter, all of which he advanced to support his claim of non-involvement, was as follows:

(1) His portfolio and the requirements of the airplane to be serviced immediately after arrival ordained that he be present when it arrived.

(2) Because of the long day he fell asleep around 5am and was awakened by some of his assistants when the aircraft arrived at 5am.

(3) Although he had his transport at the airport, he thought it a natural thing to drive the truck in question away from the airport as he had been asked to help out and he believed that all Customs formalities had been complied with.”

The Commissioners rejected “all three statements as being evidence to bear out the innocence” of Mr. Woods.

Mr. Woods was further “questioned about the use of Bahamasair maintenance personnel on one occasion for assisting with construction work on his own building he was erecting in Nassau” and “Mr Woods admitted that he had done this and that it was “an improper way of using Bahamasair’s personnel.”

Further questions arose about Mr. Woods’ involvement in the building of the Stores extension and it was found that Mr Woods was “inconclusive as to the original tender price, although certain that not less than three bids had been received and that the lowest one was for $91,000. The Stores ended up costing $197,000. The report stated that Mr Woods “denied that he had been involved in any way with funds for payment of work as construction progressed.” They stated that “this testimony had been given by the Accountant, Mrs Culmer, and he stated that he was in no position to substantiate or deny it”.

Hmmmm. The Commissioners stated that “the overall conclusion is one of items purchased for sums well above their true value, items overhauled at a cost roughly four times what a new replacement would have cost, and others purchased from one source when they were otherwise available, on the basis of a firm quotation, at a figure slightly less than one-third of what they were purchased for.”

What’s more, Mr. Woods slapped then Union leader Henry Dean.

The Commissioner’s concluded: “Mr. Woods’ slapping of Mr. Dean and other unchallenged instances of friction and strained relations between the two show his lack of restraint and an unfortunate management style. He was a Senior Manager in the company when he utilized company resources for his own personal endeavors on company time and at no cost to himself. The unethical stance manifested in these acts, which he admitted, is mitigated only in small degree by his admission several years later that he had done so and that such conduct was ‘improper’. Failure to set up controls and to have monitoring systems, a ready tolerance of slackness and inattention to discipline are all clearly shown in the procedures relating to the King Air and the gross abuse of Bahamasair’s revenue from inflight sales by flight attendants, all matters adduced in evidence by more than one witness.”

So, given the report of the Commission, how did Mr. Woods become Managing Director where he remains today?

Bahamasair cannot progress until and unless it adopts a real atmosphere of accountability and until it rids itself of the poor management, bloated staff and weak internal controls.

I will be looking into Bahamasair further in the New Year.

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