Delegate-elect King-Hinds support MACS’ quest for qualifying certificate

Delegate-elect Kimberlyn King-Hinds has expressed her support for J&P Holdings (CNMI) LLC’s application for a qualifying certificate that would exempt them from paying CNMI taxes so they can invest in their start-up aviation company, Marianas Air Connection Services, in order to provide inter-island air service in the CNMI.

In an interview with King-Hinds last week after she was named the victor in the CNMI delegate race following the 2024 CNMI general elections, she addressed questions regarding her support for J&P Holdings’ request for a QC with the Commonwealth Economic Development Authority in order to push forward with the establishment of an inter-island air service which will also be known as MACS.

“I’m in full support of their application to get a QC. Competition is good for the airline industry. I hope the application is considered because starting up an airline passenger service is very expensive. They’re bringing in new planes to service inter-island (travel) and I hope the community comes out to support it,” she said.

J&P Holdings is looking at investing over $8 million on this start-up inter-island service.

King-Hinds, who was also former Commonwealth Ports Authority chairwoman, shared that based on her experience working with J&P Holdings, they have showed their commitment to the CNMI.

“MAC Air and J&P Holdings’ John Stewart is just an outstanding, phenomenal human being. He is fully committed to the CNMI. He’s made a lot of investments here at the ports. During my time in CPA, J&P Holdings was one of CPA’s best paying customers. He was always on time and in terms of lease negotiations, he’s made significant investments. He built a whole new hangar, a beautiful one, and his planes are brand new,” she said.

When asked about concerns raised regarding the request to waive CNMI taxes, King-Hinds simply said it’s not about government revenue but rather to provide a service desperately needed by the residents of the CNMI.

“It’s a service that we need, and everyone is talking about the cost of airfare between Saipan, Tinian, and Rota and having competition keeps everyone honest and in check. It’s not supposed to benefit the government, it’s supposed to benefit the public and what the public is crying for is for relief from these high-ticket costs between these islands and an alternative. Competition is healthy and this is one way to help level airfares, and we should all be in support of it,” she said.

According to Saipan Tribune archives, should the Commonwealth Economic Development Authority grant J&P Holdings (CNMI) LLC a qualifying certificate—essentially to waive certain local taxes for J&P Holdings, its subsidiaries, and its owners—Micronesia Air Connections Services could start providing regular inter-island air service as early as December.

A long standing CNMI investor, J&P Holdings, owned by John and Paula Stewart, has decided to branch out from air cargo, charter, scenic flight, and skydiving services by establishing a new airline in the CNMI focused on safe and reliable inter-island travel as well as direct air service from Saipan to Guam.

J&P Holdings’ endeavor comes at a time when inter-island travel faces uncertainties due to ongoing legal battles between the Commonwealth Ports Authority and the CNMI’s sole inter-island service provider Star Marianas Air.

However, providing this kind of service is no easy feat as it would cost upwards of $8 million to cover the costs of acquiring planes alone (specifically nine 9-seater planes, with plans to expand into 19-seater planes).

According to J&P Holdings tax attorney Tina Azarvand, to ensure the airline’s viability and sustainability, the company has applied for a qualifying certificate with the CEDA for abatement and rebate of certain CNMI taxes.

Essentially, the certificate would waive certain taxes MACS would need to pay to the local government for a certain number of years.

Azavand explained that the qualifying certificate’s benefits extend beyond just helping the new airline (MACS) and its parent company (J&P Holdings). Her trickle-down economics explanation contends that the certificate helps MACS avoid financial losses in its early years, when startup costs are high, and profits are low. This financial support enables J&P Holdings to invest in new aircraft, pay landing fees, and take on the risks of providing air service.

MACS intends to offer competitive fares for flights between Saipan and Tinian, Rota, and Guam. Final fares will depend on landing fees and the outcome of the qualifying certificate. MACS will also provide discounts to locals, seniors, and veterans.

Azarvand shared that should MACS be granted a qualifying certificate, the airline could begin operating as early as December of this year.