CPA, Continental debate heats up

The aviation situation in the Northern Marianas has become a case similar to persisting arguments that surround the chicken and the egg.

The debate is focused at which of the two really came first: termination of all nonstop flights from Saipan to Japan or dramatic decline in visitor arrivals to the Northern Marianas.

Continental Micronesia said slow market demand forced the carrier to drop all direct international flights to Saipan but the CNMI government argues otherwise.

In fact, the argument heats up before federal authorities as the CNMI Ports Authority renewed its protest against the continued treatment of Saipan and Guam as co-terminals in light of strong claims by Continental Micronesia that current market demand does not warrant nonstop flights for the island.

CPA Board Chair Roman S. Palacios and Executive Director Carlos H. Salas, in their rebuttal filed before the U.S. Department of Transportation, maintained setting conditions on the renewal of Continental Micronesia’s authority to fly Segment Route 171 would work to the advantage of both Guam and Saipan.

Continental Micronesia is seeking the renewal of its certificate authority over Segment Route 171, which involves air transport service between Sendai/Sapporo in Japan and Guam/Saipan.

CPA earlier protested the airline’s persistent treatment of Saipan and Guam as co-terminals which has resulted to the termination of all Continental Micronesia nonstop flights from Sendai and Sapporo to the Northern Marianas.

“CPA’s ultimate goal is the increase of direct flights between Japan and Saipan,” said Mr. Palacios and Mr. Salas, citing adverse impacts to the local economy by current situation in the local aviation sector.

Passenger haul

Continental Micronesia’s passenger haul dropped 56 percent from 166,245 in Fiscal Year 1996 to only 73,868 in Fiscal Year 1999, according to a report from the ports authority.

“A 56-percent reduction in service is scarcely what CPA would term success. Continental Micronesia’s claim that many of the seats operated nonstop between Saipan and Japan were filled with Guam passengers is not a justification of its decision to unilaterally abandon direct nonstop service to Saipan,” CPA said.

Mr. Palacios and Mr. Salas also emphasized Japan Airlines recorded an 18-percent increase in its average monthly arrival figures during the time Continental Micronesia reported a slowdown in market demand.

Ports Authority officials are also not convinced that the four daily roundtrip flights deployed by Continental Micronesia between Guam and Saipan provide CNMI with an excellent access to Asia.

At the same time, the senior CPA officials appeared unmoved by the 55 weekly flights between Guam and eight points in Japan, and the 18 weekly flights between Guam and five points in Asia and Australia.

“This is excellent for Guam but is having no significant impact on Saipan,” Mr. Palacios and Mr. Salas in their strongly-worded rebuttal to the carrier’s response to CPA’s protest filed before the federal transportation department.

The officials said CPA would be willing to discuss any other options or remedies proposed by the U.S. Department of Transportation while stressing that they would continue to lobby for the conditional renewal of Continental Micronesia’s authority to fly the Segment Route 171.

Market demand

In its response to CPA’s protest, Continental Micronesia said the sharp reduction in tourist arrivals to the CNMI was not caused by the elimination of all nonstop flights to Saipan but by more pressing economic factors.
Continental Micronesia president Bill Meehan said the grave slowdown in the number of Japanese tourists to Saipan has, in fact, necessitated the airline to streamline its operations on the island.

Mr. Meehan pointed out that the Continental Micronesia’s decision to drop all nonstop flights to the CNMI could have been an opportunity for other foreign carriers servicing the islands to expand their operations if there was a demand for more airline seats.

At present, Northwest Airlines and Japan Airlines currently provide nonstop service between Tokyo and Saipan, while JAL regularly flies between Osaka and Saipan.
Other Japanese and U.S. airlines could provide nonstop Saipan-Japan service if they determine that market demand in Japan requires nonstop air transport services.

Standing pat on its application to renew certificate of authority to continue treating Guam and Saipan as co-terminals, Continental Micronesia said CPA’s contention that the DOT set conditions on the route authority contradicts airline deregulation and U.S. efforts to open the international skies.

Continental Micronesia cited a provision in the Federal Aviation Act which prohibits the transportation department from requiring particular airline schedules.

Federal international aviation policy guarantees that carriers be provided with unrestricted opportunities to develop types of service and systems based on their assessment of market place demand.