Lay down the cards

Over the past several weeks., a number of published articles and editorials comments have taken issue with Commonwealth Ports Authority and the recent stance it has taken with respect to Continental Micronesia. I would very much like the opportunity to fully explain CPA’s position.

In our filing with the Department of Transportation, we have openly criticized Continental’s complete failure to live up to its commitment and obligation under its operating certificate to provide direct air service between Saipan and Japan and other points in Asia. Since it began treating Guam as its hub three years ago, Continental Micronesia has unfairly decided to serve only Guam directly, leaving the CNMI with no direct service, a decision which has resulted in a dramatic loss in passenger arrivals to Saipan ever since. The end result of Continental’s decision has been the precipitous economic tumble the Commonwealth has suffered and continues to suffer. We are asking the Department of Transportation to include in Continental’s operating certificate the obligation to provide direct air service to Saipan, and not just Guam.

The numbers speak very loudly. In Fiscal Year 1996, Continental Micronesia had 166,245 passenger deplanements. By 1999, that number had drastically fallen to 73,868 passengers—a 56 percent reduction in service! In contrast, over that same period of time, Japan Airlines has increased its average monthly arrivals by 18 percent. Continental Micronesia tries to justify its failure to live up to its commitment and obligation to provide direct air service to Saipan by claiming its four daily flights between Guam and Saipan give us better access to passenger traffic from Japan and other points in Asia. This is ridiculous.

CPA has never questioned or criticized Continental Micronesia’s right to make a profit. However, CPA has rightfully criticized Continental Micronesia’s decision to completely abandon its direct international air service to Saipan. It is obligated to do so under its operating certificate. It has essentially gone back on its commitment. Its recent phasing out of all its Japan-Saipan nonstop service appears to have been the final stage of its Guam hub implementation. The decision gave no consideration whatsoever to the adverse economic impact it has on the Northern Marianas. It has been disastrous to the Commonwealth, to say the least.

CPA believes that Saipan should not be denied the opportunity for direct air service simply because Continental Micronesia chooses not to provide it. CPA has an obligation to ensure the continuity of direct flights between Japan and Saipan. Its action asking the U.S. Department of Transportation (DOT) review Continental’s decision to stop all direct air service to Saipan from Japan clearly has merit. The way it works now is that Guam and Saipan are considered “co-terminals,” but on paper only. Although the term means that service to one destination is considered service to both for purposes of route authority, CPA is asking DOT to recognize that Guam and Saipan are separate destinations each deserving of its own independent service by Continental Micronesia. CPA believes that this was always the intent of the DOT operating certificate that was given Continental Air Micronesia.

Former Continental Micronesia president, the late Donald Beck, was a person who had the Commonwealth’s best interest at heart. He was being prophetic years ago when he warned the Commonwealth to watch out for and oppose any route authority to be given any carrier that would not provide direct non.-stop service to Saipan. That prophecy is now being fulfilled, unless we oppose it as Mr. Beck had advised the Commonwealth.

Continental Micronesia has long been considered the “air carrier of Micronesia.” If Continental no longer wants to fulfill its commitment under its operating certificate, it should say so, so that another U.S. carrier should be allowed to step in.

Roman S. Palacios

Chair

CPA Board of Directors