their bottom line profit by 50 percent to $629,094 in the year to March 31.

But chairman W. Neville Conyers has voiced concern in the annual report that while air travel grew worldwide by five percent last year, Bermuda experienced a decline of more than five percent.

He predicted a further decline in revenue for the company during this fiscal year, as the lease for BAS bars and restaurants was "prematurely terminated'' to make way for the new retail complex in the air terminal. That move also cost several jobs.

That, said Mr. Conyers, will lead to restructuring costs which will affect the 1997 results, causing a decline in earnings for the year.

But the BAS boss advised Transport Ministry officials to proceed with caution and sensitivity in their efforts to raise revenue and make the airport self sufficient. He supported upgrades to the airport saying they were long overdue.

But he said, "It is a known fact that the industry is cost sensitive, and the needs of balancing the airport's budget must not be taken in isolation as airlines are just now experiencing a turnaround in fortunes.

"This has happened as a result of major carriers using the demand/supply theory, where they no longer stay in markets any longer than demand requires, or profitability lasts.

"Locally, one will have noticed a diminution of frequency and destinations during our off-season which has lengthened considerably over the last few years. As the costs of operating have escalated, and the load factors have declined, the carriers have cut service or ceased operations completely.

"A balance has to be found that ensures continuity and frequency of service which will provide a wider benefit to the Island through employment, increased business activity and foreign exchange.'' While fully supporting the Tourism Ministry's efforts, BAS implored Bermudians to support the initiatives "from which each and every one of us stands to benefit.'' Mr. Conyers said that it will take the effort of every Bermudian to make tourism a success, and that it is the responsibility of everyone to make the visitor experience the best that it can be.

He said, "The company is mindful of the fact that if any increase in visitors is to be realised, it will have to be hard fought for. Consumer confidence in our prime markets, although improving, is still below expectations.

"Additionally, the competition for our visitors is fierce, and not just from other destinations, for technology has given consumers greater access to destinations from their homes and the ability to shop around for that which suits their budget and lifestyle.'' Mr. Conyers said that the efforts being made by major hotels and local and international business partners to upgrade facilities and services must become the goal of every organisation in Bermuda.

"Our physical beauty is only a part of what will attract visitors,'' he continued. "As we so often boast, Bermudians are well-travelled citizens. We should therefore ask ourselves what it is we expect when we travel abroad and apply the same considerations to those who choose Bermuda as a vacation or business destination.'' The aircraft, passenger and cargo handling services firm that has provided aircraft catering and food and beverage services at the Bermuda Air Terminal, saw revenue for the year fall 12 percent or almost $1.6 million to $11.7 million, as a result of the decline in catering demands by major carriers serving Bermuda.

The company was also hit by a record number of zero revenue days, because of the active hurricane season and numerous winter storms here and on the Eastern seaboard.

Mr. Conyers said, however, the company was prepared for these and other problems, such as the decline in visitor arrival, and was able to cut operating costs by more than 13 percent or almost $1.7 million to $10.9 million. Income from operations rose ten percent to $819,723.

The company's shares traded during the year at a discount to book value. But action taken to repurchase nine percent of the issued stock, buoyed the share price and improved book value per share from $5.00 to $5.36. Earnings per share rose from 41 cents to 61 cents.