Bahamasair (UP, Nassau Int'l) will be allocated USD22.4 million from the government in the 2019/20 budget, USD9.3 million of which will be spent on heavy maintenance and engine overhauls on its three ATR42-600s and two ATR72-600s.

A move by the country's previous administration to acquire these five new ATRs at a cost of USD120 million in order to avoid costly maintenance had failed, according to Tourism and Aviation Minister Dionisio D’Aguilar, the Tribune newspaper reported.

This left the conservative Free National Movement government, elected in 2017, no choice but to raise the airline’s allocation, D’Aguilar said while presenting his ministry's budget contribution. For the previous fiscal year, Bahamasair received USD13.4 million.

He criticised the state-owned carrier's decision in April 2016, to "borrow USD120 million, mostly in US dollars, at 8.3% to purchase the five new ATR aircraft, buy some parts, and pay off some old loans. The dream was that these new aircraft would reduce maintenance costs so much so that Bahamasair would be able to generate sufficient additional cash flow to service these loans."

The fact that these loans must now be paid off over the next seven years had led to the steep rise in budget allocation to the airline. The USD9 million increase will be used to make principal repayments of USD6 million, plus help mitigate some of the annual interest costs "which will total approximately USD9.5 million for this year and next year,” the minister said.

Meanwhile, USD1 million in the airline's budget allocation will be used to facilitate a move of the company’s headquarters from its current location damaged by Hurricane Matthew in October 2016 to another complex.

Bahamasair took delivery of a first B737-700 in February, financed by the sale of the airline's now retired fleet of Dash 8-300s, Bahamasair chairman Tommy Turnquest said at the time. It also operates three B737-500s.