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MVA, CPA differ on landing fees
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Posted on Dec 22 1998
The Marianas Visitors Authority and the Aviation Task Force have expressed concern on the planned rate increase of the Commonwealth Ports Authority amid the continuous decline in tourist arrivals.
“This is not the time to discuss increases in fees,” said Dave M. Sablan, board chairman of MVA, adding that this would be counterproductive to the plan of the tourism office to entice more airlines provide additional flights to the CNMI.
Likewise, board members Marian Aldan-Pierce and Bart Jackson questioned the timing of raising the fees as MVA has been struggling to increase visitor arrivals since Asia’s financial crisis began in July 1997.
J.M. Guerrero, head of the aviation body, said he will meet with the ports authority to discuss the issue and help the agency look for ways on how it can raise money needed for its operations.
The task force has proposed to provide airlines 50 percent reduction in landing fees for every additional flights they make in the Northern Marianas.
While the CPA board has yet to make a decision on the rate increase, two studies on the financial condition of the airport and the seaport have recommended the raising of fees so that the ports authority can repay its $53 million debt.
Carlos H. Salas, executive director of CPA, said the government would have to subsidize the operations of the ports authority if it will not raise its fees. “Unfortunately, this alternative is highly unlikely since as we all know, the government is also grappling with its own financial problems,” he said.
Based on the airport study made by Ricondo & Associates, it is necessary for the ports authority to raise its landing fee from 85 cents to $1.40 since the projected 4.5 percent growth of the aviation division this year will not be enough to repay its debt.
On the other hand, the study conducted by Booz, Allen & Hamilton noted the adverse impact on the seaport earnings if the garment industry decides to pullout of the CNMI due to the implementation of international trade agreements.
According to the study, the seaport rate must increase by 30 percent in the year 2000 to 2002 and additional five percent every five years.
