Taxpayers are set to pay out again after Government struck a deal with Bermuda Aviation Services (BAS) to waive the company's exclusive rights to offer private jet services at LF Wade International Airport.

The agreement, which was announced yesterday by the Ministry of Tourism and Transport, comes on top of Supreme Court ordering Government on losing its second appeal to cough up more than $202,569.16 in damages for contravening BAS's rights, which run until 2014, by giving rival operator Sovereign Flight Support permission to provide a private jet service, as exclusively reported by The Royal Gazette last month.

Government did not disclose how much it had paid BAS in the settlement announced yesterday.

Premier Ewart Brown, against whom BAS and its subsidiary Aircraft Services filed a writ in his capacity as Minister of Transport, believes the costly exercise, which has been an ongoing legal battle for the past two-and-half years at significant cost to the taxpayer, could encourage competition and lead to a higher quality of service at the airport.

Dr. Brown said: "The Government desires, wherever possible, to encourage competition as experience shows this not only ensures competitive pricing but also leads to higher quality service levels.

"It is important that LF Wade International Airport maintains a high standard of operation generally but particularly as we move towards US pre-clearance for private aircraft."

The previous court-ordered payout was for loss of business to BAS from Sovereign serving aircraft that should have landed at BAS' private jet facility, including an additional amount incurred while Sovereign was still operating for three months after the ruling was made, as revealed by court documents — but more money is still owed or due by Government to BAS.

Chairman of BAS Ltd., Michael Darling, said yesterday: "This agreement is yet another example of our good working relationship with the Bermuda Government, both parties saw this agreement as being in the best interest of aviation in Bermuda."

His comment seems to be in contrast to a long-running legal case which was taken to arbitration almost a year-and-a-half after it was launched, with the court ruling in BAS's favour in December 2008.

But, having lost at arbitration, Government sought leave to appeal the decision in December last year, but the appeal was refused at Supreme Court on January 8 and a subsequent appeal was turned down at the Court of Appeal in March, as exclusively reported in The Gazette.

Under the terms of the arbitration hearing, chaired by a three-man panel of lawyers, the ruling was supposed to remain confidential for the immediate future, but the Attorney General's Chambers revealed back in January that the court had ruled in BAS's favour and that Government had put in an application for leave to appeal the decision.

Despite the ongoing case and BAS, which had its exclusivity deal extended six years ago, contesting that Sovereign had not competed in the tender process for the right to offer the service, Sovereign went ahead and converted a former US Air Force building at Carter House at Southside into a private jet passenger terminal, which officially opened in May 2008.

From the outset of the case, BAS maintained that the Ministry would also be going against the advice of its own technical advisers if it granted Sovereign permission to operate private jet services, with Mr. Joaquin saying BAS had won an exclusive right to offer private jet services through an open tender in 1997 and made its concerns over the breach known to the Transport Ministry.

The Sovereign Group, meanwhile, has a line of creditors queuing up to collect money due for unpaid services, including The Department of Airport Operations, East End Aircraft Services Ltd. and Technics Auto Centre Ltd., while East End Aircraft Services was awarded $119,480 and $500 in interest costs after a writ was filed against Sovereign Ground Support Ltd. in June, according to a court listing.

Bermuda Police have also confirmed they are investigating matters related to the Sovereign Group, but would not disclose any details about the nature of the inquiry.

However, the Department of Airport Operations will soon be inviting bids to provide passenger and ramp handling of commercial airlines and private aircraft at the airport, possibly opening the door for the Sovereign Group again, despite Government deciding not to renew the company's private jet licence when it expired in June, due to a material breach, in a matter separate to the BAS case, as exclusively reported in this paper in August.