CPA checks if it can halt increase in airport charges

The Commonwealth Ports Authority is now making a thorough review of its financial capabilities in line with the scheduled adjustment of airport charges toward the end of October, according to Board Chair Roman S. Palacios.

Mr. Palacios said the Board of Directors and the management are looking at the ports authority’s financial situation to determine whether the agency can still continue holding the new airport charges that are up for implementation beginning next month.

“We would like to move very cautiously. Everything, from our level of revenues to our expenditures and bond payment, is currently being looked at to give us a clearer picture what we can do to accommodate the carriers’ request,” he said.

He added that as soon as the CPA completed preparing a financial analysis of its revenues and expenses, as well as debt payment responsibilities, agency officials will meet with representatives of airline companies.

Mr. Palacios explained the proposed consultation meeting between CPA officials and airline executives is aimed at discussing what can be done to continue making flight services to the Northern Marianas affordable and less expensive.

He added that the issue will be discussed and decided by the Board of Directors once a review of CPA’s financial condition is completed. “It all boils down to whether our level of revenues can continue funding our operations without adjusting airport charges.”

“We of course would like to know if we can afford to continue keeping airport charges at the pre-March 2000 levels. We hope we can because it will definitely make flying to Saipan less expensive for both travelers and airline companies,” said Mr. Palacios.

Northwest Airlines earlier this month asked CPA to extend the implementation of a discount program beyond fiscal year 2000, citing the benefits it reaped for both Saipan signatory carriers and the Northern Marianas tourism industry.

Northwest is the first among the five Saipan signatory airlines to have requested for the extension of the CPA’s Airline Incentive Program, which was a major factor behind the carrier’s decision to upgauge its aircraft on Saipan beginning October last year.

The Airline Incentive Program was a significant player that paved the road for Northwest’s decision to upgauge from a DC-10 to a Boeing 747 in October 1999. The increased capacity has resulted in more passenger arrivals on Northwest this year versus 1999.

CPA’s airline incentive program offers 50 percent reduction on arrival and departure fees for each additional passenger above a historical median passenger load factor plus 15 percent.

The 50 percent reduction in arrival and departure fees is offered by CPA to signatory airlines with hopes to revitalize the tourism industry in the Northern Marianas.

CPA Board of Directors has approved the extension of perks to airline companies servicing the CNMI since last year on condition that they are able to bring up their arrival figures by 15 percent more than their current traffic load.

Figures recorded during the first six months of the fiscal year 1999 indicated that Continental Micronesia would be needing an additional 481 passengers, aside from its current 3,204 average pax per week, in order to qualify to the perks.

With its 996 average arrivals per week, Japan Airlines needs 149 passengers more; Northwest will have to lure 267 passengers in addition to its average 1,778 arrival figures; while Asiana needs 89 arrivals more in a week before they are granted incentives.

The incentives will be in effect only until October 2000 since CPA is starting to implement a new rate schedule by then in compliance with its 1998 bond indenture.