CPA exceeds debt coverage requirement by 309%

The Commonwealth Ports Authority is beginning to show indications of resiliency with current level of aviation revenues empowering the agency’s ability to comply with the requirements of the $20 million airport bond indenture.

CPA records showed revenues generated by the agency’s airport operations during the month ending April 2000 exceeded the required debt coverage ratio of 125 percent by 309 percent, after several months of falling short to meeting the requirement.

During the period under review, CPA’s airport division bagged $1.042 million in total operating revenues which registered a 12 percent improvement from the previous year of the same month’s figures recorded at $927,441.

The growth was spurred by the increase in enplanement and deplanement figures at the Saipan International Airport mainly attributed to CPA’s Airline Incentive Program which grants 50 percent reduction in arrival and departure fees to CNMI signatory airlines which are able to bring up their arrival figures by 15 percent.

According to a report prepared for the members of the CPA Board of Directors, international landing and enplanement fees soared 38 percent while international deplanement jumped 20 percent in the fourth month of the year.

At the same time, collection from domestic enplanement fees climbed 17 percent while landing fees improved by 82 percent, which was complemented by a 92 percent growth in revenues from fuel flowage charges.

In his financial report to the Board and the Management, CPA comptroller Dave Demapan noted significant recovery based on the analysis of the trend recorded on the operating revenues from the Fiscal Year 1996 to the Fiscal year 2000.

“So far, the trend shows that in FY-2000, it has exceeded the levels of FY 1998 and FY 1999 significantly. When we look at the trend on the operating revenues through April 30 from 1996 to 2000, we observe that the levels in FY-1998 and FY-2000 have pretty much bottomed out,” the report pointed out.

By the first month of the year, CPA was able to cut down salaries and wages by 22 percent, contractual services by 93 percent, employee benefits by 25 percent, board expense by 32 percent, and membership dues by 88 percent.

The agency’s operating activities net loss in January this year improved by 54 percent at $121,639 from the year-ago level of $265,213.
This was primarily linked to the recognition of the $119,546 deferred revenue and the continued positive result of the Airline Incentive Program.

CPA faced serious financial problems since 1998 when the level of revenues it generated could not allow the agency to comply with its $53 million airport and seaport bond indenture.

By July 1999, CPA was at minus 1.76 from being able to meet the bond indenture requirement.