Star Marianas doubts CPA’s sincerity

Shaun Christian

In the wake of the recent dispute between Star Marianas Air Inc. and the Commonwealth Ports Authority that has put all interisland travel on hold indefinitely, Star Marianas says it doubts CPA’s sincerity in resolving the current and any future disputes in good faith.

According to Star Marianas president Shaun Christian, although Star Marianas desires to resolve any dispute between CPA informally and efficiently, it doubts CPA’s sincerity in doing the same.

“…In view of recent events, such as the abrupt termination of the prior agreement between CPA and Star Marianas and the implementation of new rates and fees without prior consultation, Star Marianas has doubts about the sincerity of CPA’s offer to conduct such negotiations in the near future and in good faith,” Christian said.

One sticking point for Christian is that SMA believes that CPA did not follow policies and guidelines established by the Federal Aviation Administration as to how fees should be established.

“There are clearly defined policies and guidelines established by the FAA as to how fees should be established. In the opinion of Star Marianas management, such guidelines were not followed when the current CNMI regulations found at §40.10.1 were amended to establish the new fees. These issues are not new. Prior to the new methodology that CPA implemented, Star Marianas raised similar concerns as to the previous Airport Use Agreement. …Protracted discussions and negotiations did not lead to a resolution, forcing Star Marianas to bring those disputes to the CNMI courts,” he said.

In addition, Christian noted that Star Marianas requested that CPA delay the implementation of the new fees to give the parties an opportunity to discuss them and fully explore what their impact would be on Star Marianas’s operations but was denied by CPA.

“This incalcitrant attitude then forced Star Marianas to file a complaint with the U.S. Department of Transportation…due to the limited amount of time permitted for the filing of such a complaint from the implementation of the fee structure. In CPA’s responses to the DOT complaint, there were admissions that certain errors exist in the newly amended CNMI regulations. Unfortunately, the DOT decided not to handle the matter because it determined that the dispute was not sufficiently significant for it to exercise jurisdiction but referred the matter to the FAA instead,” he said.

Lastly, Christian said CPA previously refused to fully disclose its financial information despite repeated requests by Star Marianas as a condition of the Airport Use Agreement.

“It would seem axiomatic that any member of the taxpaying public should have the ability to view how a CNMI public entity is spending taxpayer funds, but even more pertinent where Star Marianas is trying to properly evaluate whether the rates and charges CPA is proposing are reasonable in relation to CPA’s costs for providing the facilities and services utilized by Star Marianas,” he said.

Christian said Star Marianas wants to resolve the dispute informally through a neutral third party.

“Star Marianas reiterates its desire to resolve any disputes with CPA informally but in an appropriate and structured format that involves a neutral third party. Therefore, in order to make meaningful progress there must be a commitment by both sides to engage in mediation within a definite time frame in the near future,” he said.

According to Saipan Tribune archives, Gov. Ralph DLG Torres has promised to fully subsidize all fees and charges CPA will assess against SMA for the remainder of the fiscal year, provided that SMA agrees to reduce the cost of travel to the islands of Tinian and Rota.

However, Christian said that subsidizing fees is not the solution because the airline is capable of managing its own business affairs.

“If CPA is willing to engage in meaningful, structured discussions, then SMA is also willing to engage in such discussions and work toward restoring interisland air service,” he said.