Star Marianas, CPA to meet to discuss airport fee structure

After much back and forth regarding fees for the use of the Francisco C. Ada/Saipan International Airport, Star Marianas Air, Inc. and the Commonwealth Ports Authority have finally agreed to meet to discuss concerns raised regarding CPA’s fee-structure.

Following multiple letters from Star Marianas regarding concerns about CPA’s free structure and its intent to ask the Federal Aviation Administration to investigate CPA’s rates, CPA board Chair Jose Ayuyu wrote back to Star Marianas agreeing to meet for a discussion with Gov. Arnold I. Palacios in attendance.

“I, alongside the executive director of CPA and staff have met with the governor. CPA is open to meeting and discussing any outstanding issues that you may have. I have asked the governor to reach out to you to coordinate a meeting with representatives from both Star Marianas and CPA,” Ayuyu said in his letter.

In response, Star Marianas chair Robert Christian said he appreciates CPA’s willingness to meet and discuss their concerns.

“Thank you for your letter acknowledging receipt of our concerns regarding the CPA’s fee-setting practices under NMIAC 40-10.1 and the related allegations of collusion. We appreciate your willingness to meet and discuss these important issues, and we look forward to engaging in a constructive dialogue with representatives from the CPA, as well as Gov. Palacios. Please let us know the time and date that works best for the meeting so we can coordinate accordingly,” he said.

Last week, Christian sent a letter to Ayuyu informing the agency that Star Marianas will no longer be tolerating its “scheme to bypass federal fee setting regulations” by “coercing airlines into compliance with non-compensatory fees.”

“I am writing to formally and unequivocally object to the unethical and coercive tactics employed by the CPA under the Commonwealth of the Northern Mariana Islands Administrative Code Title 40, Subchapter 40-10.1: Airport Rules and Regulations (NMIAC 40-10.1). It is abundantly clear that the CPA, in coordination with its legal counsel and consultants, has engaged in a deliberate scheme to bypass federal fee setting regulations, coerce airlines into compliance with non-compensatory fees, and subvert the principles of fairness mandated by the Federal Aviation Administration. This egregious behavior cannot and will not be tolerated,” he said.

Christian informed Ayuyu that Star Marianas intends to file a formal complaint with the FAA and will be demanding an investigation into CPA’s fee-setting practices.

“We will be filing a formal complaint with the FAA, calling for an immediate investigation into the CPA’s fee-setting practices, its use of the Letter of Authorization process, and its clear violations of Grant Assurances 22 and 24. The FAA has the authority to launch a comprehensive investigation into these practices,” he said.

Christian adds that Star Marianas will be urging the FAA to take corrective action to include sanctions and penalties.

“We will be urging the FAA to take corrective action, including but not limited to: the invalidation of NMIAC 40-10.1, the imposition of penalties or sanctions on the CPA for its abusive fee-setting practices, and a requirement that the CPA return to a transparent, compensatory fee model that complies with FAA standards,” he said.

In his letter, Christian explains that CPA’s requirement that airlines must accept all CPA rules and regulations, including the fee setting methodology, upon issuance of a Letter of Authorization, is a blatant act of coercion designed to eliminate any opportunity for airlines to negotiate or challenge its terms.

By linking operational access to this acceptance, Christian said, CPA has created a scenario in which airlines are left with no choice but to accept CPA’s demands or risk losing access to critical airport infrastructure.

“This is not only coercive but represents an abuse of regulatory power and authority. FAA Order 5190.6B, Chapter 18, explicitly mandates that non-compensatory fee-setting models must be mutually agreed upon. The CPA’s approach, which forces airlines to accept terms under duress, flagrantly violates this requirement. CPA’s insistence that airlines automatically accept these terms upon receipt of the LOA, without any opportunity for review, negotiation, or objection, is nothing short of a violation of the FAA’s regulatory framework,” he said.

In addition, Christian claims CPA, its legal counsel, and its outside consultants are “colluding” to impose a fee structure that not only circumvents federal regulations but also serves their mutual financial interests at the expense of the airlines.

“The issuance of a rate book that lacks transparency and bundles arbitrary costs, combined with the unilateral imposition of terms through the LOA, is clear evidence of a coordinated effort to force airlines into accepting inflated and unjustified fees. The CPA’s consultants, who have consistently provided flawed and misleading advice under the guise of ‘industry standards,’ are complicit in this effort. Their role in crafting a rate book that is deliberately opaque and lacking in detail further supports the conclusion that this is a calculated effort to obscure the true costs being imposed on airlines. Moreover, the fact that CPA’s legal counsel has facilitated this process by drafting and enforcing regulations like NMIAC 40-10.1 only underscores the degree to which this collusion has been institutionalized,” he said.