CPA revenues soared 17% in May

Spurred by the additional flights deployed by Taipei-based Mandarin Airlines and the increased participation of foreign carriers in the Airline Incentive Program, aviation revenues generated by the Commonwealth Ports Authority soared 17 percent in May, reaching close to $200,000 from last year’s $830,000.

Since the beginning of the Fiscal Year 2000 in October, CPA revenues from its aviation division jumped 16 percent to $7.796 million from the previous year of the same period’s $6.731 million.

A financial statement prepared by CPA Comptroller Dave S. Demapan attributed the increase in revenues to the implementation of the new schedule of airport charges, which witnessed an increase in landing and departure fees.

The report also cited the Airline Incentive Program, which has been implemented since last year to entice carriers to increase seating capacity and arrival figures, as one of the biggest contributor in CPA’s financial recovery.

For the month of May 2000, aviation income shot up by 38 percent compared with the same period last fiscal year, with landing fees increasing by a whooping 60 percent; enplanement and deplanement fees collection by 46 percent and 29 percent respectively.

Because of the positive performance of its revenue-generating measures in May, the ports authority managed to exceed the required 125 percent coverage ratio for its 1998 airport bonds by 286 percent, reaching 411 percent in the same period.

Working Capital Reserves also jumped six percent to $6.840 million while cash and equivalents, which include cash assets in banks and other investments, amount to about $13 million.

Over two years since its coffers reached zero-level, the ports authority came on the rebound improving its May 2000 net loss by a significant 25 percent and reducing operating expenses, excluding non-cash items, by another seven percent from October 1999 to May 2000.

However, the ports authority’s operating expenses increased by a dramatic 37 percent from last year of the same period’s $522,260 to $715,738 in the month of May 2000.

The implementation of the two-step employees’ salary increase has been identified the main contributor to the 37 percent increase in the month’s operating expenses although CPA officials said it could have been higher had the wage adjustment been made one-time.

Salaries and wages increased 55 percent while employee benefits soared 21 percent in the period under review. At the same time, travel expenses registered a 19-percent increase and costs for legal services shot up by 61 percent.

The improvement was brought about 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.

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.