CPA criticized for dragging its feet on incentives

Senate Vice President Thomas P. Villagomez yesterday criticized the Commonwealth Ports Authority for being “slow” in providing incentives to airlines servicing the Northern Marianas, saying the government has been requesting them this package since last year.

While CPA has agreed to slash by half the arrival and departure fees paid by the airlines, the senator believed this is not enough as the Aviation Task Force has been asking also a cut in the landing fees.

“CPA has been very slow in providing these incentives,” Villagomez told in an interview, noting the task force, of which he is a member, has prodded ports authority to offer incentive package to airlines since last year to help them cope with the economic crisis.

“It has taken them so many months only to come up with this proposal,” he said. Villagomez also chairs the Senate committee on Public Utilities, Transportation and Communications.

Under the plan, CPA will grant the reduced rate beginning May 1 until February next year to carriers that can provide an additional 15 percent increase in seating capacity.

The cash-strapped agency has suspended earlier decision to raise airport fees to improve its revenue collections in efforts to entice airlines to bring in more tourists into the Northern Marianas.

Although other members of the Legislature have welcomed the move in view of the dire situation of the tourism industry, Villagomez said these incentives are critical in persuading airlines to maintain and upgrade their services on the island.

He stressed CPA could have earned more revenues had it lower its fees and other airline charges earlier when international carries, like Northwest and Continental, had been requesting the CNMI government for some financial relief amid declining passenger traffic.

“It’s better to provide incentives because it won’t hurt the airlines. In fact, these will help them promote the island to tourists and eventually improve the revenue collections of CPA,” the senator pointed out.

Villagomez added that had the ports authority address the situation earlier, the impact on its income would not have been “very bad” as now when it is trying to raise funds to meet its various obligations, including repayment of $53 million bonds it borrowed for facility improvement.

The Northern Marianas is reeling from the worst crisis to hit the island in 50 years spawned by the prolonged recession in Asia, its main source of tourists and investments.

Hotels, airlines and other tourist-related businesses have asked the government for tax breaks and other incentives to help them cope with the economic downturn.