Continental mulls flight to S. Korea

Encouraged by the improvement in the Korean market and the easing of economic slowdown in South Korea, Continental Micronesia may begin charter service to that Asian country by the end of the year, according to company president Bill Meehan.

“We’re back there, analyzing the market. We potentially will start some charter service. We’re analyzing that,” he said in a television interview. Continental will use the more efficient 737-800 type of aircraft to compete with Korean Air and Asiana Airlines.

Since the beginning of the year, visitor arrivals from Korea have shown considerable increase, which fueled Asiana’s decision to boost daily flights six times a week using B 767.

Korean Air also has raised the possibility of a Seoul-Saipan charter flight before the end of the year, a decision buoyed by the increase in travel by Koreans.

Although the Japanese economy is still in slump, Meehan said Continental will not abandon the destination because the airline believes that the Japanese tourists would come back to Guam, Saipan and the Micronesian Islands.

But when they come back, Meehan said, they will be smarter just like their Asian neighbors who are confronted with economic difficulties Japanese have changed their spending habits, comparing prices in department stores and choosing the cheapest tour packages, as they battle their worst recession in decades.

“The downturn in Asian economy has put a lot of emotional thought in everybody’s mind and has created a lot of competition within the Pacific Region. It may never rebound to where it once -1995 or 1996 figures — but it really doesn’t have to,” said Meehan.

Having been in Micronesian region for the past 31 years, Continental will treat each destination like a business so that the airline can still be around for another 31 years, he said.

In changing the schedule of non-stop flights, Continental analyzed and compared the operations between Saipan and Guam, said Wally Dias, staff of the vice president for sales and marketing.

When Continental was then flying the DC10 and B747 in Narita, about 20 percent of the people flying on the Narita-Saipan flight were actually going to Guam. “It really costs us to double our maintenance expense to carry only 20 percent,” he said. The new hub schedule has skipped Saipan as a main destination, but allows Guam-bound
Continental flights originating from key cities in Japan to unload travelers visiting Saipan.

Despite the nonstop service in Nagoya and Osaka to Saipan, passenger numbers declined by 24 and 39 percent, respectively. On the other hand, passengers coming from Narita to Saipan grew by at least one percent in 1998 even if there was no nonstop service.

“This was another indication to Continental Micronesia that the connecting service isn’t really the issue to the downturn in passengers to the CNMI,” said Dias.

Continental has been giving the same rates to its wholesalers for Saipan and Guam the past six months, but the package prices to Saipan are still 2000 to 5000 yen higher than the Guam rate.

This may be due to the cost of hotel package or transfers, said Dias. “It is not the higher airline cost. We’re actually flat, and when we first started the service, we were actually giving a discount to come to Saipan,” he said.