House weighs tax breaks, incentives for Continental

The House of Representatives is working out a proposal to grant tax breaks and other incentives to Continental Micronesia in hopes to help the carrier sell the CNMI in key Asian markets as well as to reduce fares between the islands and prime destinations.
Its leadership, led by Speaker Benigno R. Fitial, met yesterday with a representative of the Guam-based carrier to discuss the plan which would remain under wraps pending final decision.
Wally Dias, staff to the vice president of Continental Micronesia, welcomed the move, but added they still have to study details of the plan.
“These type of actions are very pro-active and would be helpful. We’re going to have to go back and work out the details of what that can actually accomplish,” he told reporters after the meeting.
The airline official stressed, however, that both the CNMI and Continental must work together in promoting the islands in Japan, which he said would create the “biggest impact” in the local tourism industry.
‘[We are] just trying to find some common grounds to work together. The Speaker and I had a very productive meeting and we have some measures to talk about [to] try to get more information,” added Mr. Dias.
The Commonwealth Ports Authority last year agreed to provide a 50 percent cut in departure and arrival fees to all airlines servicing the CNMI in an effort to encourage them to bring in more tourists here.
But the incentive, which is set to expire this October, has some strings attached as it will only be offered provided that a carrier increases by 15 percent its total number of arriving passengers.
Mr. Fitial declined to elaborate on the proposed tax breaks for Continental when sought for comment, but said the House would still work out a definite plan.

Better ties
Yesterday’s meeting is the first to be held between Continental and the House under Mr. Fitial’s leadership and could likely improve relations between the carrier and the island government, which have soured in recent years following downscaling of its service to Saipan.
Continental, the largest carrier in Micronesia, has abandoned its direct flights to Saipan from key Asian cities, such as Tokyo, Osaka, Nagoya, Hong Kong, Taipei, Seoul and Manila, on the heels of the economic crisis that hit the region in 1997.
The carrier, whose mother company is the Continental Airlines based in Houston, had blamed declining passenger haul and rising operational costs in cutting down the nonstop service, but the CNMI government had criticized the decision which it maintained came without consulting local officials.
All Continental flights to and from Micronesian islands touch down Guam’s new airport — partly funded by the carrier — for a few hours of stop over before passengers take connecting flights to their next destinations.
CNMI officials say making Guam as its hub has deprived the Commonwealth of potential tourists, especially Japanese, who don’t want to wait too long for their connecting flights. The only direct service it has is the Guam-Saipan route.
This has prompted lawmakers with the Association of Pacific Island Legislatures (APIL) to push for the creation of a new regional airline to upgrade service in most Micronesian islands and fill void left by Continental.

Promotional activities
But Mr. Dias pointed out they have been actively participating in economic projects put up by the CNMI government in trying to spur the tourism sector, including increase promotional activities in Japan, the island’s main market.
“The nonstop service is kind of down the road. We have to get successful ones from the current route structure first [before resuming direct flights to Saipan],” he said.
Hopes are high that the industry will eventually rebound as current visitor arrivals to the CNMI have inched up slightly in recent months. Japan’s recovery from the economic recession will also signal better airline service to Saipan, according to Mr. Dias.
Continental, in fact, will add more flights this summer from Japan to Micronesian islands to accommodate anticipated increase in the outbound travel from that country.
“So we are cautiously optimistic that things are starting to improve and we may start seeing increasing numbers,” said Mr. Dias.
Backing this optimism, Mr. Fitial noted that the Japanese government may finally designate the old international airport located within the metropolitan Tokyo as departure and arrival area for some of the international flights.
Presently a domestic airport, Haneda is more accessible for a lot of Japanese travelers, unlike Narita International Airport where nearby hotels are being used by some as layover before departing for overseas destinations.
“Haneda will become an international airport beginning this summer and that will bring people from Japan directly to Saipan through Japan Airlines,” said Mr. Fitial, adding that this assurance was made during the recent visit here of a top Japanese lawmaker.