Commonwealth anticipates entry of ANA but…

The CNMI hopes to recover from the impact of the pullout of Japan Airlines this year with the entry of a new Tokyo-based airline, All Nippon Airways. But ANA’s schedule would depend on Haneda Airport’s accreditation as an international airport.

“They’re expecting ANA to come in but it will only happen if Haneda Airport becomes an international airport,” said House Speaker Benigno R. Fitial yesterday, in reference to his recent meeting with local business leaders on the issue of JAL, which he said would mean a loss of over 100,000 tourists from Japan.

Right now, no airline can take over JAL’s routes to Saipan from Narita Airport due to a lack of aircraft slots. JAL would retain the right to the slots at Narita even if it stops flying to the Marianas in early October this year.

Fitial said ANA would solve the CNMI’s problem because Haneda is located near the Narita Airport.

MVA said that about 400,000 tourists from Japan arrive in the CNMI every year, representing nearly 75 percent of the CNMI’s tourism market. JAL brings about 155,865 passengers to the CNMI annually.

The government said the JAL pullout would result in $80 million to $100 million in losses across the community. This is based on a projection of a 45-percent decline in the number of Japanese tourists in case of a JAL pullout.

A commissioned study conducted by the Economist.com in June 2005 said that the Commonwealth stands to lose as much as $216.2 million in economic output annually when JAL stops its operations.

Including the expected multiplier effect, the consulting firm estimated that the impact of losing one visitor from a JAL flight would equal $1,396.45 in economic output for the CNMI.

The loss in total business revenues is projected to reach about $1,646.84 per visitor and the impact on personal income, about $235.78 per visitor.

Economists.com said that if a third of JAL’s traffic is replaced by other carriers, the CNMI would suffer a decrease of about 103,910 passenger arrivals. This is expected to result in an economic output loss of about $144.1 million annually. About 1,700 jobs and about $24.5 million in personal income would be lost.

In another scenario, if passenger arrivals from Japan decline by 51,955, the CNMI’s economic output would be cut by about $72.1 million annually. Lost jobs would reach 850, equal to about $12.3 million in personal income annually.

The study also revealed that the tourism industry directly and indirectly employs about 6,200 people in the CNMI, with an annual payroll of about $70 million.

Economists.com said 4,000 of these jobs, or about 12 percent of total CNMI business employment, are found in the core visitor industries and generate $45 million in salaries and wages for CNMI workers each year.

The other 2,200 jobs depend on tourist spending and produce $25 million in annual payroll.

Tourists reportedly spend a total of $367 million annually in the CNMI. In 2004, visitors spent about $150 million in lodging alone, the consulting firm added.

Overall, the visitor industry has a total economic impact of $733 million annually.