Three phases of construction:
o US departures terminal – complete 2010
o International arrivals terminal – complete 2011
o International departure / domestic terminal – complete 2012
Total project budget of $405 million
o Approximately $100 million will be in Bahamian dollars.
Airline revenue on Nassau routes relatively strong:
o Average yield (revenue) on Nassau routes $0.18 per mile
o US domestic route average of $0.13 per mile (28% less)
o US carrier international route average of $0.12 per mile (33% less)
Actual experience: Increase in airport costs of $22 or 873% July 1, 2007 with no material negative passenger impact. Air arrivals up 6.1% from January to March 2008 (Ministry of Tourism data).
Current airport charges are relatively low for international flights:
o 36% or $14 per passenger below the Caribbean average
o 59% or $36 per passenger below the average of Fort Lauderdale and Miami
Approximately $430 million required to fund the terminal project and refinance current debt totaling $80 million (net new debt of approximately $350 million).
$280 million required at the beginning of stage 1 (US departures terminal):
o $80 million refinancing of current debt
o $200 million for construction of stage 1
Up to $80 million of participating debt is proposed for stage 1 in lieu of senior debt.
Nominal increase in domestic passenger fees from $5 to $7.50 per passenger upon project completion planned.
Rate Flexibility / Predictability
The financial markets require a predictable rate setting regime that does not require government involvement.
o Provides a rate setting mechanism to produce revenue sufficient to manage debt market expectations and obligations.
o Allows for rate setting flexibility in response to fluctuating market conditions over the term of financing
o Allows for public notification and consultation in advance of rate setting.
NAD internal cash resources can be managed to complete all obligations through November 2008.
To remain on schedule the project steel must be ordered in November – this order requires the financing be complete and committed.
To allow for sufficient marketing of the investment, all government approvals and consents must be in place by September 30th to remain on schedule.