Continental to drop Manila flights

Citing a dramatic hike in fuel costs and low sales, Continental Airlines on Friday revealed it will soon end service between Saipan and Manila, the only direct flight on the island to the Philippines, in a move that threatens to limit access to specialized medical care for locals and disrupt travel for many foreign workers.

“This will have a hugely negative impact on our ability to get people here the medical care they need,” said Public Health Secretary Joseph Kevin Villagomez, adding that hospitals in Manila are the primary recipients of local hospital patients with ailments that require advanced treatment and that the alternative—airlifting patients to Guam—will prove costly and highly problematic.

In addition, the cut in service could prompt cutbacks at the Commonwealth Ports Authority, a government source said, because it will mean less revenue at an agency that is already on shaky financial footing.

Continental in statement said it will stop service on the Saipan-to-Manila route on July 16 and customers with reservations for flights after that date will receive calls from the company, which will rearrange their travel plans or offer a refund.

The announcement comes after a jump in jet fuel costs to almost $100 per barrel, a 140-percent increase since January 2007.

“While these are very difficult decisions to make, the record fuel costs, combined with lower customer demand in these markets, led to the decision to suspend service,” said Mark Erwin, Continental Micronesia’s president and chief executive officer.

The airline also blamed the loss of Manila customers traveling to Saipan to take the National Council Licensure Examination nursing examinations. The National Council of State Boards of Nursing began NCLEX testing in Manila in August 2007, eliminating the need for Filipino nurses to travel to Saipan to take the exam.

“Despite our best efforts, working with the Marianas Visitors Authority and the government of CNMI, we were unable to generate sufficient customer demand from the Philippines to replace the loss of our customers traveling to Saipan to take the NCLEX exam.

“We will continue to offer our valued customers in the CNMI and Philippines daily service with our connecting service via our Guam hub,” said Continental’s director of sales and marketing David Kendell.

Continental’s move comes as hospitals in Guam have begun turning away some referrals from Saipan due to a lack of hospital beds there, Villagomez said. Until now, the flights to Manila have proven an inexpensive and effective way to get seriously ill patients specialized care. To move many patients to Guam, he said, health officials most often have to charter a flight at a cost of up to $15,000. Moreover, Cape Air, the primary air service from Saipan to Guam, which patients with less grave needs can take, lacks the certification to carry oxygen tanks, he said.

A source with Asiana Airlines, which runs air service from Saipan to Korea, said its flights are equipped to carry medical stretchers but was unable to answer whether the company could carry oxygen tanks. Northwest Airlines did not immediately respond to a request for comment.

To the many Filipino workers on Saipan, Continental’s cut in service will mean a more arduous journey to their home country. Filipinos without U.S. visas are concerned they might be barred from traveling to Guam in order to catch flights to Manila from there, according to Irene Tantiado, president of the Coalition of United Workers, a local organization that represents many foreigners working on Saipan.

“Really, although we understand the reason for it, this will be very bad for guest workers who don’t have visas,” said Tantiado. Those workers might be forced to travel longer routes through Korea or Japan to get home, she added, a change that will cut into vacation time. Moreover, some workers fear the other airlines will increase prices to destinations with connecting flights to the Philippines, she said.

At the CPA, acting executive director Lee Cabrera said the cut in Continental’s service will “make it more difficult for CPA when it comes to investment issues and bond issues” and that the agency “regrets the loss of the flights.”

Ironically, Continental Airlines official Walter Dias visited Saipan in May to celebrate the 40th anniversary of the company’s service on the island, he noted.

A confidential source with CPA said Continental’s Saipan to Manila service generated $106,000 each year in revenue for the agency, which places a charge on flights entering and leaving the island. In April 2008, the source said, flights on that route brought 943 passengers to Saipan, while 616 departed. The source noted that without the funds provided by those flights, the agency may have “to cut somewhere” to close that financial gap.

Continental will also cut more than a fifth of capacity at its small Pacific hub in Guam.

This development comes even as the islands’ tourism industry continues to reel from the effects of Japan Airlines’ cancellation of regular air service to the Commonwealth in October 2005.

Although it is generally seen as one of the healthiest network carriers, Continental is struggling along with other airlines to cope with rapidly rising fuel costs and a slumping economy. A number of industry observers say the current crisis is as bad as, if not worse than, the sharp downturn that followed the Sept. 11 attacks, which preceded a series of airline bankruptcy filings.

About 3,000 job losses are expected as a result of the cutbacks. Continental said it believes most of the cuts will occur “through voluntary programs,” which could include early retirement or temporary leaves of absence. [B][I](With AP)[/I][/B]