MBIA to receive EC$1 million monthly support from Government

by Linda Straker

• Revenue contraction linked to reduced activities at MBIA due to Covid-19
• Reduction in aircraft movement has led to near complete paralysis of revenues

The Government of Grenada is to provide EC$1 million to the Grenada Airports Authority (GAA) for the 12 months in 2021 because of revenue contraction linked directly to reduced activities at the Maurice Bishop International Airport (MBIA) that is directly related to Covid-19.

“Airport management is working feverishly to further cut back on operational costs and the GAA has been engaging staff and other stakeholders to work together to develop strategies to navigate through this unprecedented period. The GAA has also sought out and received assistance from Government, which will amount to one million dollars each month, for the rest of 2021,” said a statement from the Grenada Airports Authority that was issued via the Government Information Service.

Under the headline, “Financial fallout from covid-19 pandemic pushes Grenada Airports Authority to engage in further cost-cutting,” the release said that the crippling effect of the ongoing Covid-19 pandemic is forcing the Grenada Airports Authority to examine more stringent cost-cutting measures to eliminate its monthly deficit of $2.2 million.

The GAA said the release has experienced a significant decline in revenue since the start of the pandemic as the sharp decrease in the demand for world travel has triggered reductions in flight operations, causing passenger arrivals through MBIA to be almost non-existent.

“Statistics show that aircraft movement declined by more than 50% between 2019 and 2020. Prior to the pandemic, that figure stood at 12,970 compared to 6,015 in 2020. Similarly, passenger movement declined by 72%, moving from 447,522 persons in 2019 to 126,336 in 2020.” The release from the Statutory body confirmed that the reduction in aircraft movement has led to the near-complete paralysis of both aeronautical and non-aeronautical revenues for Grenada’s international airport.

GAA revenue, derived specifically from passenger fees, landing fees and commercial concessions, has plummeted. Aircraft and passenger-related revenue account for around 90% of MBIA’s income. Consequently, for the past year, the GAA has drawn down on its revenue reserves to remain operational and to ensure that all Covid-19 protocols and standards were implemented, realised and maintained for the benefit of our country.

Giving the assurance that the Board and the Management have enforced a number of critical cost-cutting measures without creating risk to aircraft and passenger safety and security, the release said that given the severity and extended duration of the current pandemic, the GAA has now been forced to introduce more stringent second-tier measures to mitigate the significant financial deficit.