Airlines seek to defer hike in landing fees

International airlines servicing the Northern Marianas have sought assistance from the House of Representatives to hold off anew a round of increase in landing and passenger fees which the Commonwealth Ports Authority implemented last March.

Rep. Bobby Guerrero, chair of the House Commerce and Tourism Committee, said the hike has only led to higher airfares between Saipan and key Asian cities where most visitors to the island come from.

The Commonwealth Ports Authority, however, has told the committee that it would look into the request even as it stressed that the increase in fees is necessary to meet its mounting financial obligations.

The agency has only implemented the new schedule of airport charges beginning March 1,2000 after suspending its effective date for more than eight months following pressures from lawmakers who pledged government subsidy to CPA.

Under the plan, landing fees jumped by 63 percent from 85 cents per thousand pounds to $1.40 for signatory airlines. Passenger facility fees, on the other hand, went up by 38 percent.

Coupled with increasing fuel costs, the airlines are left with no choice but to pass these additional expenses to their passengers, according to Mr. Guerrero.

“It will discourage tourists from coming over here because it is now getting more expensive to travel to Saipan,” he said in an interview yesterday. “Tour package prices are getting out of hand.”

The committee is expected to receive a report this week from CPA on whether it can give way to the request for a roll back on its airport fees.

“We’re looking at measures to give assistance to the CPA so that at least we can help them cut back on the fees,” added the representative, noting that the agency will need at least $1.5 million a month to pay back its debt.

The ports authority undertook a $53 million bond flotation for massive improvement projects on CNMI’s air and sea ports, which must be paid before 2008. The increase in fees as well as reduction in personnel costs are the only options left to enable them to meet its obligations.

CPA has projected to generate revenues between $1.3 to $1.9 million from the increase in landing and passenger fees.

Last year, CPA granted a 50 percent cut in departure and arrival fees to all signatory airlines servicing the CNMI to entice them to increase traffic and revive the tourism industry. The incentives ran from May 1, 1999 to February 29 this year.

The House has been trying to entice other airlines to service the Commonwealth in an effort to boost the tourism economy which has faltered since 1997 in the aftermath of the Asian currency crisis.

“If the airport fees are rolled back, it can help them provide more direct flights,” said Mr. Guerrero. “We are assisting the airlines because we want to have more tourists to come here.”

At the same time, the House committee is holding several discussion with the Marianas Visitors Authority and other government agencies to improve the island’s image. For instance, a beautification task force initiated by MVA will make the CNMI more attractive to visitors, the representative said.