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From $3.9M, CPA now projects loss at $6.4M
From 72 hours, CPA now implementing 64 work-hours
The Commonwealth Ports Authority’s estimated revenue loss due to the coronavirus outbreak was initially projected at $3.9 million but that amount has now climbed to nearly double, at $6.5 million. That prompted the CPA board yesterday to approve a plan to implement another cut in the work-hours of all employees.
Effective March 29, all CPA employees will have a 64-hour work schedule. Last Feb. 14, the board approved a 72-hour work schedule for all employees, reducing by eight hours the work-hours of employees per pay period. This time, the cut is 16 hours from the regular 80 hours per pay period.
CPA now estimates the total revenue loss at $6,478,735 if all flights suspensions are extended to the end of the fiscal year. More airlines have suspended flights to the Francisco C. Ada/Saipan International Airport, lowering CPA’s projected total revenues by an amount significantly greater than originally projected.
At the CPA board meeting yesterday at the Aircraft Rescue and Fire Fighting classroom at the Francisco C. Ada/Saipan International Airport, board director Pete P. Reyes described cutting the work-hours of employees as “the most painful part” about being a board member.
Board director Barrie C. Toves urged the CPA management to look into possibility of tapping its reserve account but CPA executive director Christopher S. Tenorio said that doing so will cause CPA to default on its loans.
In a later interview, board chair Kimberlyn-King Hinds said that, when they made the initial cuts last Feb. 14, they knew that it was inevitable they were going to have to go back to the table, given the anticipated reduction in flights.
King-Hinds said they voted to implement more austerity measures to ensure that they are able to maintain their operating expenses but, far more importantly, to be able to pay employees at the bare minimum of 64 hours biweekly.
“We are also cutting other operational expenses,” said King-Hinds. Even with that, they’re still short $200,000, she added.
King-Hinds said they have taken a very conservative approach in coming up with the estimated amount of losses and are anticipating a worst-case scenario. “And that is basically for the month of April and the rest of the fiscal year. We anticipate zero international flights,” she said.
In terms of revenue, King-Hinds said they’re basically relying on the United Airlines’ Guam-Saipan route, given the proliferation of the coronavirus in South Korea and Italy, and the uncertainty of what’s going to happen with Japan and how that’s going to impact the traveling public.
Despite efforts to sell the CNMI as a coronavirus-free destination, “people are just not wanting to travel these days,” she added.
Other measures that are being taken is that CPA has halted all projects and contracts, and terminated contract services with the parking, among other contracts.
“We’re just looking at every single avenue to be able to reduce costs,” she said.
