JAL, tour operators oppose hiked fees

Japan Saipan Travel Association and Japan Airlines have objected to the plan of the Commonwealth Ports Authority to increase airport fees because this will contribute to the downturn of the island’s tourism economy.

Kiyoshi Aikawa, president of JSTA, said the increase in airport fees would be passed on to consumers, pushing travelers to choose cheaper destinations such as Hawaii, Guam and Bali, Indonesia.

Instead of raising fees, Aikawa said all efforts must be geared toward satisfying the tourist at a lower cost and promote the Visit the Marianas ’99 Campaign.

Members of JSTA are not optimistic that there will be a substantial increase in the number of Japanese travelers coming to the island as consumers remain gloomy. Japan, the island’s main market, has been battling its worst recession since World War II.

Yukiharu Enomoto, district manager of JAL, warned that the airline will be forced to downsize its operation by using smaller aircraft. Enomoto noted that JAL has already made a commitment to lower its fares between Japan and Saipan in an effort to lure more tourists to the CNMI.

In a move to raise the needed revenue to pay its $53 million debt, the cash-strapped ports authority has proposed a 64 percent hike in landing rates and 38 percent increase in departure facility charge.

This will mean an additional $547,000 payment of JAL to the ports authority every year.

Instead of raising the fees, Enomoto proposed the following measures for the ports authority to undertake:

Restructure its organization, downsize its operation to lower cost of operation to avoid layoffs;

Introduce airport sales by inviting other airlines from neighboring Asian countries specifically Taiwan to provide service to the CNMI; and

• Consider parking fee as an additional source of revenue.

For the past weeks, the ports authority has been consulting various government officials and airlines before implementing a decision to increase the airport fees.

CPA’s move to carry out a rate hike was one of the conditions imposed by the bond rating agencies before giving an investment grade bond rating to the $53 million bond it issued in March 1998.

Without any increase by March 15, 1999, the bond interest rate will go up from 6.25 percent to 6.70 percent. Failure to acquire an investment grad rating would make it difficult for the agency to float successive bonds.