CPA chair: Competition is healthy for interisland travel

Kimberlyn King-Hinds

Responding to recent issues surrounding Marianas Southern Airway that may lead to the loss of another interisland service provider, Commonwealth Ports Authority board chair Kimberlyn King-Hinds said that competition is good as it regulates airfare and provides CNMI residents with options.

Although CPA was not involved in the discussions between the CNMI government and MSA, CPA is and has been in support of an additional inter island air service provider, King-Hinds said.

“CPA was not involved in the discussion between MSA and the government but welcomed the new entry to the market and the new service that MSA provided, especially to the people of Rota and Tinian, who frequent the interisland commute, whether it be for medical reasons, work, or leisure,” she said.

King-Hinds explained that competition is healthy as it regulates airfare and provides the community with options.

“We do not control the fares that the airlines set. The market ultimately regulates that through competition. Competition is healthy as it can result in lower prices and better service because it gives people options,” she said.

In addition, the CPA chair pointed out that MSA came into the picture at a time when the CNMI was in dire need of interisland air service.

Interisland air service was suspended for a brief period when Star Marianas, who previously held the monopoly in the industry, could not resolve its issues with CPA, from whom it owes over $3 million in fees to date.

The cessation of flights heavily impacted the Tinian and Rota communities so the entry of another commuter airline was welcomed at the time as a resolution to the issue.

“Back in early December of 2021, SMA suspended interisland services due to what they cited as an ‘unhealthy flight environment.’ There were so many people that were stranded on Saipan, especially people from Rota, who were here for medical purposes and who ended up relying on the goodwill of friends and family to accommodate their unexpected prolonged stay. We were inundated with phone calls from elected officials and private citizens, asking CPA for help because not only were folks from Tinian and Rota stuck on Saipan, there were many who couldn’t get the critical health care they needed here on Saipan, lab specimens were collected but not being sent, Domestic Violence perpetrators were being released back into the homes they just terrorized because Tinian and Rota DPS does not have the facility to hold arrestees for more than 24 hours. The impact of the flight cessation was immediate and real to these communities and that created an opportunity for someone else to enter the market,” King-Hinds said.

“To be clear, CPA cannot get involved in discussions about subsidy to any one particular airline. We have to treat all airlines the same. Which was why when we received federal assistance, we gave a break to all airlines because we saw the devastation that the pandemic had on the industry,” she added.

To date, the issue between CPA and SMA has yet to be resolved and it is uncertain whether it will be, since SMA still currently owes CPA roughly $3.1 million in fees and over $$1.5 million in interest dating all the way back to 2014.

The option of a competing interisland air service ensures that the communities of Rota and Tinian do not suffer the same tragedy faced back in 2021.