HANMI sees $600K loss

The decision by the Commonwealth Ports Authority to temporarily suspend the entry of new international flights to the CNMI could result in a loss of $600,000 for the Commonwealth, forcing the Hotel Association of the Marianas Islands yesterday to withdraw its support of the CPA resolution.

The $600,00 represents potential income from hotel rooms and meals reserved by Beijing Air customers.

HANMI chair Gloria Cavanagh said the association’s initial reaction upon learning of the CPA decision was that it was a “good thing.” The CPA board had passed the resolution to suspend the entry of new flights at the request of the Torres administration. The move was ostensibly to give the CNMI government breathing room to assess the current state of the CNMI’s infrastructure and its capacity to accommodate the rapid increase in visitor arrival.

“Our support was premised with the understanding that existing and confirmed flights were not affected,” said Cavanagh.

It now appears that incoming, scheduled Beijing Airlines flights will be affected by the flight suspension.

“Now, it is only eight days before the maiden flight [of Beijing Air] was supposed to take off and it was cancelled. With the flights cancelled, so were the hotel reservations,” Cavanagh said.

She pointed out that Beijing Air has already been approved to fly to the Commonwealth by both by the federal and local governments even before the flight suspension was issued.

“I am totally against this cancellation. This will adversely affect HANMI members. Let’s say, for discussion, 290 to 300 persons per flight and there are two of them [two flights], so [with an] average of two persons per room, that is 300 rooms. …If they stay for four days, we are talking about 1,050 room nights per week when the flights are full. These reservations have already been made.”

“Now there is a major cancellation because there is no plane,” Cavanagh said.

Beijing Air acquired its permit application from the U.S. Department of Transportation on Jan. 17, 2017, authorizing it to fly between Hangzhou, China, and Saipan.

Last May 3, 2017, Beijing Air was granted by CPA to have two weekly flights into Saipan on hours set by the CPA and that would commence flights starting June 29, 2017. However last June 6, 2017, Beijing Air received word from the CPA that it would temporarily ban all new international flights effective June 14, 2017.

Cavanagh worries about the effects of decisions that have been made. “It’s a domino effect and if you think that it’s so easy to get a plane and have them agree to certain hours required by the CPA and turn around and cancel it, how much money will that cost?”

“Right now, MVA increased its arrivals by 44 percent. HANMI occupancy is at 87 to 88 percent. With projections going on for the year, especially with this new flight, we are going to see a huge hit in some hotels. There are three hotels that these flights are booking and, with three hotels at 1,050 room nights, it’s going to hit one hotel extremely hard. This is not acceptable.”

Beijing Air has already sought a restraining order against CPA with the U.S. District Court, eight days before its supposed maiden flight to Saipan.

“The only people that could actually stop this [flight suspension] would be the federal government: USDOT and [the Federal Aviation Administration]. We hope that [judge] Francis Tydingco-Gatewood would act quickly on this. We are eight days from the scheduled flight and reservations are already finalized. The reputation of Saipan and one of HANMI’s members will be adversely affected and that’s not right,” Cavanagh said.