PIA to fold its wings, cites stiff competition

Pacific Island Aviation Inc. will be flying the Marianas skies for the last time on Feb. 9, the airline announced yesterday.

PIA, which has served the islands for the past 16 years, cited stiff competition in the market and high operation costs as the major reasons for its decision.

In a statement, PIA maintained that there are too many airlines currently competing for a limited number of customers available in the market. Also servicing the Saipan-Rota-Guam route are Freedom Air and Cape Air.

“With Continental introducing Cape Air’s service (which is similar to the service being provided by PIA), there is too much capacity in the market to justify the costs associated with both companies’ need to service overhead cost,” the airline said.

PIA also expressed confidence that its decision would benefit the remaining service providers and allow them to continue to provide safe, frequent, and affordable services between the islands.

“We are proud to have been a part of this community’s development for so many years and we appreciate all the support we’ve received. With Freedom Air and Cape Air doing a good job of serving the market, we feel it’s an appropriate time for us to exit,” PIA chief executive director Robert F. Christian said.

The Hotel Association of the Northern Mariana Islands expressed regret over PIA’s decision.

“Among all of the small airlines, PIA has been with us for a long time. It’s sad to see a small commuter airline go,” said HANMI president Lynn Knight. “But when they talk about the size of the market, I can definitely understand. I’m just sorry to see them leave the market.”

In an interview, PIA vice president Jim Stowell said the company’s board of directors made the final decision to cease flight operations on Monday. He added, however, that PIA has contemplated the move and reviewed its options thoroughly.

“People has been asking us to stay in the market. But it’s just cost-prohibitive and not economically viable at the present time. Traveling is down, there’s too much capacity, and fares are very low,” Stowell said.

About 60 employees stand to lose their jobs when PIA suspends flight operations between Guam and the Northern Marianas on Feb. 9.

Stowell said some of the current employees will be retained to help PIA refurbish the aircraft. The carrier is now exploring opportunities in other travel markets, he said.

“We are looking for places where we can more effectively compete, where capacity is needed, and where we can put our aircraft, people, and certificate to use,” he said.

PIA also reported that it is working closely with Northwest Airlines and travel agents to ensure customers with advanced reservations are contacted and rebooked on another carrier to minimize any disruption in service and provide a smooth transition.

Customers that are already ticketed and those who have made advanced reservations are encouraged to contact the airline or their travel agent for information regarding their planned travel.