A resolute Commonwealth Ports Authority issued Monday a “final and irrevocable” termination notice against long-time tenant Freedom Air for failing to pay its unpaid obligations, starting the clock for the airline company to vacate all CPA premises on or before Sept. 19.
Acting CPA executive director MaryAnn Lizama confirmed with Saipan Tribune that the notice was officially received by the company but it has yet to officially respond or communicate with CPA.
Freedom Air owner Joaquin Flores has yet to respond to Saipan Tribune requests for comment.
The termination notice voids Freedom Air’s lease agreements and airline use agreement with CPA and demands that the airline firm pay its arrears, now amounting to $1.23 million since 2011.
This is not the first time that CPA issued a termination notice against Freedom Air. Several notices of default, termination, and promissory notes were issued to the company since 2011: on Oct. 5, 2011; Aug. 18, 2012; Sept. 24, 2012; Feb. 5, 2013; and March 4, 2013.
Despite these notices to terminate and vacate CPA premises, the company was afforded many chances to settle its obligation, which CPA describes as a demonstration of the opportunities extended to the local carrier.
At a June board meeting, Freedom Air officials led by Flores appeared before the board to seek forbearance on its outstanding account and arrears.
In response to this “request,” CPA asked for financial documents and information from the company to help the board decide on Freedom Air’s request. It was learned that Freedom Air has yet to furnish CPA with the requested documents.
In its final notice sent Monday, CPA stated: “The CPA board of directors issued its definitive and final decision to terminate Freedom Air’s lease agreement; airline use agreement; and all other operative agreements for breach of contract, conversion, and failure to cure delinquent account with CPA.”
The notice indicated that “there is no further forbearance, withholding, waiver, nor consideration afforded to Freedom Air.”
The company is ordered to vacate CPA premises on or before Sept. 19 and surrender the premises in good condition. The airport manager will make a final inspection as soon as the premises are surrendered.
In its “final” notice, CPA indicated that failure to vacate its premises may lead to legal action against the company.
If Freedom Air wishes to continue operations on CPA premises in the future, it must “fully satisfy its outstanding obligations today.”
Saipan Tribune learned that Freedom Air has three lease agreements with CPA: One for the Rota airport premises, the second for the former PIA hangar, and the third for the general area at CPA premises. The company is delinquent in these lease agreements by $15,378 and $3,024, respectively.
For airline use agreement, Freedom Air is delinquent for aviation charges amounting to $554,268 as of Aug. 14. CPA also found that the airline wrongfully withheld passenger facility charges collected from passengers: Saipan ($273,500); Rota ($148,392); and Tinian ($202,275).
On the promissory note account, the delinquency is at $36,411 as of Aug. 14, 2013; miscellaneous fees including badge and fingerprinting services amount to $500, and its share of the utility cost at the Rota airport, $1,099.