Low arrivals push CPA revenue down

The Commonwealth Ports Authority’s operating revenues in the aviation division for the first quarter of fiscal year 1999 amounted to $2,330,157 or a 29 percent decline compared to the same period of 1998.

According to the monthly financial report, the airport losses in operation was primarily due to the significant drop in passengers of various airlines, namely, Continental, Northwest and Asiana Airlines.

More than a year since Asia’s financial crisis began, CPA’s operation and capability to pay for its financial obligations are threatened with the plunge of the island’s tourism economy.

As a result, the ports authority plans to increase the passenger facility charge by 39 percent from $5.79 to $8.00, as well as the landing fees from $.85 to $1.40 or a 55 percent increase per thousand pound to be able to repay its debt.

Since 58 percent of the $9.73 million airport budget goes to the salaries and wages of employees, Dave S. Demapan, comptroller of CPA, said the ports authority must reduce personnel costs by 23 percent.

Demapan warned that if the decline in revenues will continue, the working capital reserves amounting to $4,377,089 will be depleted within 14 months or by January 2000.

During the first quarter of FY 99, CPA’s operating expenses amounted to $3,419,449 or a 14 percent cut from the same period of 1998 primarily due to the cost-cutting measures carried out by management and staff.
from the previous year of the same period.

CPA’s net loss amounted to $979,670 or an 11 percent increase from the previous year. However, the December’s net loss alone of $248,534 is a 41 percent drop over November’s record of $418,735.

The ports authority’s marine division, on the other hand, registered a $954,100 operating revenues, or a slight two percent increase from the same period of the previous year.

Combined revenue tonnage for Saipan reduced by seven percent or a total of 172,724. The marine division also incurred operating expenses amounting to $374,926 or a 13 percent increase from the same period of fiscal year 1998.

Net income jumped by 35 percent or a total of $878,764 for the first quarter of fiscal year 1999 due to the interest in income earned from its investments. However, based on the first quarter of this fiscal year, the ports authority still has a shortfall of $24,086 to meet its 1.25 debt service ratio.