Rollback in airport fee reduces CPA revenues

Its decision to rollback airport departure charge to the pre-March level will reduce the Commonwealth Ports Authority’s Fiscal Year 2000 revenues by over $400,000, according to a financial study prepared by consultant Rex I. Palacios.

In a report submitted to Board Chair Roman S. Palacios, the agency’s financial consultant stressed that the rollback will hardly affect CPA’s ability to fund its debt service obligation under the 1998 airport revenue bonds despite reduction in the projected FY 2000 earnings.

The reinstatement of the $5.79 airport facility charge per enplaned passenger resulted from a series of meeting between CPA and representatives of CNMI signatory airlines, which requested for the reduction in airport charges.

“The reduction in revenue of $408,736 does not have a material adverse impact on the debt service coverage ratio for FY 2000,” said Mr. Palacios, stressing that the reduction in revenues is based only on an application of the $5.79 rate through June 30, 2000.

The $400,000 will have to be reimbursed to CNMI signatory airlines as credits to the excess payments they have made between March and June 2000, when airport departure fee was raised to $8.00 per passenger which the agency has retroactively rolled back to $5.79.

Japan Airlines, which has the highest passenger traffic count of 67,321, will be receiving $148,780 in total credits from the ports authority during the March-June 2000 period.

Arising from its decision to roll airport facility charge to the pre-March 2000 level, the report also revealed that CPA owes Continental Micronesia some $95,300 in total credits; Northwest Airlines, $79,415; and Asiana Airlines, $57,380.

New industry player Mandarin Airlines, which launched its maiden flight between Taipei and Saipan in May 2000 after striking an agreement with the Tinian Dynasty Hotel and Casino, will receive $4,775 in credits.

Domestic carriers Freedom Air and Pacific Islands Aviation are getting $5,250 and $5,219 in credits respectively from the ports authority, according to the report submitted by Mr. Palacios to the CPA Board of Directors.

CPA has decided to roll back airport departure facility charge from $8 to $5.79 per passenger following a series of discussions between agency officials and CNMI signatory airlines representatives.