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Austerity pares CPA aviation losses
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Posted on Dec 08 1998
The aviation division of Commonwealth Ports Authority registered a four percent increase in operating revenues amounting to $702,298 for the month of October compared to September 1999.
Although the aviation division incurred a net loss of $312,402 for the month of October it was still a 41 percent improvement over September’s record.
Operating expenses in October totaled $1,063,369 or a 23 percent drop from the month of September primarily due to austerity measures carried out by management.
Enplaned passengers declined by 6 percent or a total of 38,589 while deplanement dropped by 4 percent or a total of 30,785 passengers. Despite the slowdown in tourism economy, operating activities in the airport generated cash inflows of $75,919.
Visitor arrivals from Japan, the CNMI’s main market, continue to plunge brought about by the economic crisis besetting the Asian region. Japan, the world’s second biggest economy, has been experiencing its worst recession in decades.
On the other hand, the marine division’s operating revenues declined by 26 percent or a total of $310,227 for the month ending October compared to September which was attributed mainly from the gross receipts income, dockage fees, other labor and wharfage fees.
Operating expenses for the marine division resulted in the 49 percent decline from $241,337 to $123,488. Net income, likewise, reduced by 81 percent which was due to the payment of bond interest. As of Oct. 31, 1998, the balance of the working capital reserves amounts to $4,604,447 or one percent increase over September.
As a result of the continuous decline in working capital reserves, the ports authority must look for other sources of revenue to enable CPA to meet the sinking fund requirements, according to Dave Demapan, comptroller of the agency.
Based on the comptroller’s analysis, the working capital reserves will be depleted by September 2000. Demapan said the agency should cut down on personnel costs to be able to cover bond payments.
