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Airlines’ incentive program faced with possible suspension
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Posted on May 11 2008
The Commonwealth Ports Authority may stop granting discounted fees to airlines that introduced new flights to the Northern Marianas.
The CPA board of directors is expected to vote today on a resolution suspending the port authority’s airline incentive program, which allows airlines to get 50 percent to 100 percent discount on airport fees for flying to the Commonwealth.
CPA executive director Lee Cabrera said the ports authority cannot afford to give discounts anymore. The $2 million appropriation granted in 2005 for the incentive program ran out at the end of 2007.
“Previously, for every dollar that we gave up as discount, we got a dollar from the central government. But that funding has been exhausted,” said Cabrera.
Fees waived under these programs include the $8 departure facility service charge and the $2 passenger arrival charge.
The Legislature appropriated the funds after Japan Airlines pulled out from the Northern Marianas in late 2005, taking away about half of the market’s airlift capacity. The intent of the legislation was to encourage airlines to fill the vacuum left by JAL.
At least three airlines received the incentive: Northwest Airlines, Asiana Airlines, and most recently, Air China, which got 100-percent discounts on the passenger departure charge, international arrival fee, and aircraft landing fee from Oct. 1, 2007 to March 31, 2008. A 50-percent discount will apply on the same fees and charges from April 1, 2008 through Sept. 30, 2008.
It is not clear whether Northwest will receive incentives from the daily nighttime flights between Tokyo and Saipan that the carrier will introduce in July 2008.
