The fate of Freedom Air—whether or not it will be allowed to continue operating inside Commonwealth Ports Authority premises beyond Sept. 19—will be tackled in today’s special CPA board meeting.
Saipan Tribune sources disclosed that, in anticipation of the local carrier appealing once more for reconsideration, both the management and the board were advised by its legal department to stand firm on its decision to evict Freedom Air from all CPA premises if it fails to pay its long overdue $1.23 million arrears.
As of Tuesday, the airline company has not paid a cent for this obligation.
The CPA board is composed of seven members: board chair Jose Lifoifoi, vice chair Benigno Sablan, Fermin Sakisat, Thomas Kiyu Villagomez, Barrie Toves, Frances Mafnas, and Michael San Nicolas.
Saipan Tribune also learned that CPA has been subsidizing Freedom Air for some years now in paying for its passenger facility charges, a requirement by the U.S. Federal Aviation Administration.
Based on FAA regulations, an airline is required to remit the PFCs it collects from passengers to the federal agency—through CPA—every first week of each month. Freedom Air has not been doing this, resulting in an unpaid obligation of $1.23 million.
Saipan Tribune learned that, since FAA monitors the PFC charges being collected and CPA regularly remits PFC charges to the federal agency, the ports authority has in effect been subsidizing the airline company.
It was learned that the board was also advised that the CPA board may cancel the eviction notice against Freedom Air only if the airline company become current on its obligation and comply with all CPA requirements.
Saipan Tribune also learned that holding off or canceling the eviction notice issued to Freedom Air may potentially expose CPA to an adverse FAA ruling.
Sources privy to the issue disclosed that the federal agency has started receiving complaints from other carriers about the alleged favored treatment given to Freedom Air for not paying its passenger facility charges.
Freedom Air has operations both in the CNMI and in Guam.
In a June board meeting, Freedom Air owner and president Joaquin Flores claimed that the decline in the number of local travelers in the CNMI and the down economy are among the factors that has hampered the ability of his company to fulfill all its obligations on time.
Freedom Air just recently reinstated the liability insurance for all its 10 aircraft.