Good Evening All,
After much thinking and deliberation, I am stuck with the question: How likely is it and how feasible would it be, if there's a chance for Bahamasair (UP) and Cayman Airways (KX) to merge?
I say this because:
Both carriers service similar markets, being relatively local markets, that function as high yield leisure markets with significant premium demand driven by the fact of it being an epicenter for lavish living and offshore financing. This is evident by Bahamas and Cayman Islands both having relatively high GDP’s (by regional standards); $18,000 and $20,600 respectively, large tourist numbers and steadily growing economies.
With regards to Bahamasair’s ageing fleet.:
Bahamasair’s 26.1 years old, 3-strong 737-200 fleet is in dire need of replacement. Their reliability and onboard product and most importantly gas guzzling engines ensure Bahamasair will be laden with unprofitable aircraft eventually leading to the detriment of the company. A relatively low-cost (and effective) solution would be to perhaps acquire a handful of Boeing 737-300/500 (easy to come by, 50% cheaper to operate) as interim aircraft with the intent so serve as interim aircraft and offer commonality with KX to continue serving their current markets (Fort Lauderdale. Miami, Orlando) . For domestic and Caribbean routes (alongside thinner routes such as PBI and some Miami/Fort Lauderdale flights), keep the 7 Dash-311's albeit after undergoing some modernization to ensure competiveness, longevity and readiness (they are known to go tech sometimes) .
Another option could be to swap out 3 of the 300's for the larger and more effective Q-400's for busy Domestic and Caribbean routes and to partially supplement the jets given the Q-400 seats 74, but breaks even at 30 and produces a profit at 40.
Would both carriers continue to operate as separate entities? dual hubs? Singly brand identity? Maybe just a small tie-up? Make it a part of a rapid succession of mergers and buy-outs between Caribbean airlines in general??
Your thoughts are welcomed.