TO REDUCE AIRPORT CHARGES $1.7-M in annual gov't subsidy needed
The Commonwealth Ports Authority needs at least $1.7 million in annual legislative appropriations to reduce current airport charges which carriers claim make air transport service to the Northern Marianas more costly than in other destinations in the region.
Executive Director Carlos H. Salas said CPA is mandated by existing laws to administer all three airports in the Northern Marianas which reflect a reasonable amount in fees collected from airline companies servicing Saipan.
Because of the agency’s mandate, Mr. Salas admitted that Saipan International Airport is currently subsidizing the expenses incurred in the operation of both Tinian and Rota air transport facilities.
He explained the ports authority is required by local laws to cover the expenses for the administration and operation of the three NMI airport facilities, adding that current enplanement and deplanement figures warrant the adjustment in CPA aviation fees.
“CPA need to find ways to sustain the operations of airports on Saipan, Tinian and Rota, meaning we have to look for revenues in order to finance the cost of running all three facilities,” he said in an interview.
Mr. Salas said CPA Board of Directors and management are likely to reduce current airport fees if it is able to receive funding from the CNMI government to subsidize the expenses for operating Rota and Tinian airports.
Mr. Salas added that unless passenger and aircraft traffic increase or the CNMI Legislature earmarks at least $1.7 million in annual subsidy to the agency, CPA’s hands are tied in reducing landing and terminal fees at the Saipan International Airport.
Before deciding on proposals from its financial consultants to raise airport fees, CPA officials sought the support of the CNMI Legislature to help alleviate the agency from a deeper financial crisis.
CPA has actually suspended the implementation of the new rates from October 1999 to March 2000, pending pledges from the Legislature of annual government subsidy.
CPA Board Chair Roman S. Palacios said they will be meeting with the leadership of the Legislature to discuss the inevitable need by the ports authority to obtain funding from the government or it is not likely to heed to the carriers’ request for a reduction in landing fees.
Mr. Palacios, who is also a member of the Aviation Task Force, said CPA is also trying to protect the interest of the program initiated by the Marianas Visitors Authority and the task force to increase visitor arrivals and encourage other foreign carriers to service the CNMI respectively.
CPA has been urged to increase its current $0.85 landing fee at the airport to $1.40 per thousand pounds for signatory airlines. The financial consultants said this is necessary as this is one of the two options left for the Ports Authority to pay its bond by 2008.
Tourism and aviation task force officials have persistently opposed the idea, contending that this would discourage airline companies to increase flights to the Commonwealth, and eventually result to increase in airline tickets.
CPA is not capable of paying its debt service with the current level of revenues it generates.
Mr. Salas said CPA is now looking at generating additional non-aviation revenues like increasing rental and lease charges by concessions at the airport and other tenants at CPA properties
Also, to mitigate the impact of the rate increase, CPA implemented the 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 from their current traffic load.
To qualify under the CPA Airline Incentive Program, airline companies need not increase flights between Saipan and foreign countries but bring in more people through upgrade in equipment or increase seating capacity.
