Turbulence hits airline industry

The travel sector saw bits of encouraging developments in 2008. Rising arrivals from emerging markets such as China and Russia, as well as consistent gains by the Korea market, last year helped buoy up the ailing tourism industry.

But hopes of recovery were quickly tempered by national, if not global, events that either hinder airlines from operating much needed service to the Northern Marianas or to obstruct the Commonwealth’s access to visitors.

Low sales and the sky-high cost of fuel during the early parts of the year pushed Continental Airlines in June to cut the only nonstop service between Saipan and Manila. The move shrank access to specialized medical care for locals and caused travel problems for many foreign workers from the Philippines.

When Northwest Airlines recently announced its plan to suspend its daily flights from Osaka in March 2009, the carrier said its decision came “in response to the global economic recession and softening customer demand.”

But the impending federal takeover of local immigration, which became law last May, is probably the greatest source of concern for the visitor industry. All indications point to the U.S. Department of Homeland Security rejecting the CNMI’s plea for Chinese and Russian travelers to be included in the new Guam-CNMI visa waiver program.

According to a semiannual regulatory plan issued by the U.S. Department of Homeland Security in November, visitors from China and Russia “cannot, at this time, seek admission under the Guam-CNMI Visa Waiver Program due to security concerns.”

Amid all these problems, it appears that Asiana Airlines will be the only one left to keep the visitor industry afloat.

Asiana has steadily increased its Saipan flights since its parent company, Kumho Asiana, purchased Laolao Bay Golf Resort. Today, Asiana offers the most flights to the Northern Marianas from the commonwealth’s major tourism markets. The South Korea-based carrier flies to Saipan twice daily from Seoul and daily from Busan. Last week, just days before Northwest’s announcement about its Osaka service, Asiana launched its three times weekly service from the Japanese city. Asiana is also instrumental in bringing in Russian visitors, many of whom travel to Saipan on Asiana’s via-Korea trips.

But even Asiana is not without its troubles. The depreciation of the Korean won and a Korean government request to its citizens to cut back on overseas travel both led to a slowdown in Korean tourism to the Northern Marianas. Kwang Joong Kim, the airline’s top official on Saipan, himself said Asiana lost money on the Saipan-South Korea route due to fewer Korean visitors.