PIA plans to buy B727 airplane

Pacific Island Aviation plans to buy a B727 aircraft to provide direct service from Saipan to Manila and Taipei as part of its expansion project.

Robert F. Christian, PIA chief executive officer, has informed the Aviation Task Force about the airline’s plan to service new destinations and inquired about the possibility of acquiring incentives.

Amid the decline in tourism economy brought about by Asia’s financial crisis, the Commonwealth Ports Authority has decided to provide a 50 percent cut in departure and arrivals fees for all airlines servicing the Northern Marianas in a move to entice them to increase traffic and revive the ailing tourism economy.

“We hope the airlines would take advantage of the incentive that we are offering. We would have wanted to give more but we have to think of our financial obligations,” said Roman S. Palacios, board chairman of CPA.

But Aviation Task Force chairman JM Guerrero wanted a reduction in landing fees to entice airlines to serve new markets and use bigger aircraft.

However, the incentive which shall take effect on May 1 1999 to February 29, 2000 will only be given to carriers that can provide an additional 15 percent increase from the current number of passengers that they bring in to the CNMI.

Beginning March 1, 2000, the ports authority will implement the new rates for the airport which was suspended in a move to help the island’s main source of revenue recover. This means that passenger facility charge shall increase by 39 percent from $5.79 to $8.00 per passenger and the landing fee shall jump by 65 percent hike from $.85 to $1.40 per 1,000 pounds.

The board did not grant the request of the Aviation Task Force to reduce the landing fees because of the difficulty in providing equal incentives as the four airlines currently servicing the CNMI are using various types of aircraft. Northwest is using DC10, Continental is using a B727 and B757, Japan Airlines is using a B747,
DC10 and B767 and Asiana is using a B767.

CPA legal counsel Jose dela Cruz warned the board against providing a 50 percent reduction in landing fee just to encourage airlines that are using smaller aircraft to use a B747 since it will become discriminatory and may encourage lawsuits.