Economic council eyes air service woes

Airline service in the Commonwealth was a key issue Tuesday in a closed-door conference of a key economic council tasked with advising Gov. Benigno Fitial, with one key voice calling for incentives to entice carriers to revive Continental’s now cancelled Saipan-to-Manila route.

The Strategic Economic Development Council heard a briefing during the conference by Northwest Airlines executive Jeffery Bernier who detailed the severe obstacles—such as skyrocketing fuel prices—the airline is now facing, attendees said, noting that Bernier and tourism sector officials project weak demand for air tickets to Saipan and Guam over the remainder of the summer.

The talks also addressed the consequences of the Continental cancellation and the early benefits local businesses have seen after Northwest’s recent boost in flights traveling to Saipan from Tokyo.

Council co-chair Bob Jones said the added tourists brought to Saipan by the new Narita flights, a nighttime service that began earlier this month, appear to have already given some businesses a much needed boost. Yet a factor “off-setting” these benefits is the fallout over the loss of the Continental flights, which stopped last week.

“Tourism is the only thing the islands have left with the garment industry gone,” Jones said. “We might be able to quantify the benefits of the flights by the end of the year if we don’t lose any more flights.”

In addition to the economic impacts of Continental’s cancellation of the Saipan-to-Manila route, a move the airline has said previously was due to fuel costs and diminished ticket sales, is the fallout it will have for medical patients in the Commonwealth, Jones said. To compensate for this loss, the Fitial administration, he added, has begun some early talks with other airlines in a bid to restart the service but those have yet to yield any final agreements.

Manila was one of the primary destinations for patients in need of advanced medical care prior to the Continental cancellation, Jones noted, and now that the direct service has ceased, local health officials have scrambled to arrange referral agreements with hospitals in Japan. Health officials, however, have yet to resolve issues critical for those agreements to work, such as whether those hospitals can accept U.S. health insurance. Meanwhile, foreigners in the Commonwealth are often barred from traveling to Guam for medical treatment due to visa restrictions.

Consequently, a key SEDC member urged the council to consider incentives to entice other airlines to begin direct service between Saipan and Manila. Rep. Diego Benavente (R-Saipan), formerly the lieutenant governor and a prospective gubernatorial candidate, reported that he suggested the council’s air services committee should open talks with airlines “to see what is possible, what it would take” to get the Manila-bound flights back.

The Commonwealth once offered a waiver of landing fees to airlines as an incentive, Benavente noted in an interview, but pulled that measure due to financial problems with the Commonwealth Ports Authority. Returning that incentive or some similar measure, he said, could a way to get “an airline to fly the Manila to Saipan route again.”

Such incentives, he added, are critical because options like transporting patients to Manila via Japan or Korea requires a lengthy layover and is too expensive to be cost effective.

“In the end, the medical referral program could end up footing the bill,” he said.