DUE TO HIGH AIRPORT FEES NMI may lose Northwest flights

Northern Marianas is on the brink of losing the services of yet another airline company if the government fails to resolve concerns raised by signatory carriers on the recently-adjusted charges collected at the Saipan International Airport.

According to documents obtained, Northwest Airlines is seriously looking at the possibility of either reducing its seat capacity or completely pulling out its direct Saipan-Japan-Saipan route due to what carriers claim were excessive airport fees.

Nobody from the airline company was immediately available for comment when contacted.

CNMI government officials and executives of airline companies signatory to the Commonwealth have been holding consultation meetings on how the concerns on airport charges can be promptly and properly resolved.

Reports claim Northwest executives have told some officials of the CNMI government that because of the newly-increased rates at the Saipan International Airport, it is likely that Saipan might be losing the carrier’s direct flight service from Japan.

The Guam Visitors Bureau and the Guam Hotel Association are reportedly aggressively lobbying Northwest to launch a direct air transport service between the island-territory and Japan.

Officials said that this might result to Northwest moving its Japan-Saipan flights to the Osaka-Guam route which could further send the Northern Marianas tourism industry into deeper trouble.

This possible scenario prompted the Legislature to lobby that the Commonwealth Ports Authority start exploring alternatives to increase revenues without risking to lose international air transport services.

Northwest earlier asked CPA to extend the implementation of its airline discount program beyond Oct. 31, 2000, citing that this was a major factor behind the carrier’s decision to upgauge its aircraft on Saipan beginning October last year.

Laurie Lofgren, Northwest general manager for Philippines, Guam and Micronesia, in a previous letter to Executive Director Carlos H. Salas, asked CPA to conduct a financial analysis in order to assess the feasibility of continuing the Airline Incentive Program beyond October 31, 2000.

Mr. Salas said the discount program has been in place for more than a year now using airport rates that are over 12 years old. CPA has adjusted airport charges beginning Nov. 1, 2000 as required by its bond rating agencies.

In a letter, Mr. Salas said CPA must be extremely cautious in its finances and make sure it continues to meet the debt service coverage ratio as required by the March 1998 bond indenture.

CPA can set the rates on Saipan that is true rate for international carriers to operate at the Saipan International Airport only if it is able to obtain government subsidy for Rota and Tinian operations, he added.

“A subsidy would definitely help in lowering airport fees,” according to the ports authority official.

Northwest is the first among the five Saipan signatory airlines to have requested for the extension of the CPA’s Airline Incentive Program.

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.