Rate adjustment hiked CPA revenues 23%

The recent implementation of new aviation rates upped the Commonwealth Ports Authority revenues by at least 23 percent in March 2000 to over $1 million from the previous year of the same month’s $893,206.

CPA adjusted airport terminal and landing fees beginning March 1, 2000 following recommendation by United States-based bond underwriter Ricondo and Associates in order for the ports authority to receive rating for its airport bonds issued in 1998.

A financial report prepared by CPA comptroller Dave S. Demapan disclosed airport revenues soared 16 percent since the beginning of the Fiscal Year 2000 compared with the year-ago level, from $5.782 million to $4.974 million.

According to Mr. Demapan, March aviation revenues jumped 44 percent thanks to the newly-implemented airport fees which resulted to a dramatic increase in several categories of fee collected by the ports authority.

The report noted international landing fees grew 56 percent, domestic landing fees by a whooping 99 percent. It added international enplaned fees shot up by 45 percent while domestic enplaned fees recorded a historic 44 percent increase.

International deplaned fees soared 17 percent and fuel flowage fee collections jumped 79 percent, according to the financial report submitted to members of the CPA Board of Directors.

In addition, revenue collected from non-aviation charges on the airport division that include car rental parking, Duty Free Concessionaire and ground rental climbed 13 percent, 10 percent and 23 percent respectively.

A brief analysis of the financial report disclosed March revenue collection in the aviation division has surpassed FY-99 and FY-98 levels by over 23 percent.

CPA officials are also upbeat that the agency will be able to surpass or even meet the level of operating revenues generated during the Fiscal Year 1998 due to bright potentials of more international flights coming in to the Northern Marianas.

Between $1.3 and $1.9 million in total revenue is expected to be generated by the CPA from the increase in landing and passenger fees which the agency implemented beginning March 1, 2000.

Two United States-based bond underwriters commissioned by the Ports Authority suggested that CPA raise its rates by 30 percent in fiscal year 2000 and fiscal year 2002, as well as reduce its personnel costs by 15 percent in FY2000 and FY2001 to mitigate the negative financial impact of the garment industry pullout.

CPA has been urged to increase its current $0.85 landing fee per thousand pounds at the airport to $1.40 for signatory airlines. The financial consultants said this is necessary as this is one of the two options left to enable the Ports Authority to pay its debt by 2008.

In addition to the anticipated increase in its aviation revenues due to the hike in airport fees, CPA also looks at an additional $200,000 from the amended fuel flowage fee, $800,000 from the collection of public parking fee, and at least $150,000 from the new rates in incinerators and ground handling fees.

CPA was hoping to generate more than $6 million in additional revenues from its decision to increase airport and harbor fees while cutting down operational costs, including a 10 percent across the board reduction in employees’ wages.

In March 1998, CPA sold more than $50 million in revenue bonds through negotiation via a syndicate led by Altura, Nelson & Co. Of this amount, $33.8 million went to the seaport while the balance was tapped to fund airport projects and pay outstanding bonds.