CPA backs economic revitalization plan

Posted on Jan 08 2001

The Commonwealth Ports Authority strongly supports the economic revitalization plan of the CNMI government, as it ensured cooperation so long as the agency’s capability to meet its debt requirements is not compromised.

Board Chair Roman S. Palacios said a detailed analysis of the ports authority’s projected revenues and expenditures was specifically made to determine whether CPA can heed to calls for lower airport charges.

According to Mr. Palacios, the financial review showed a modest increase in actual revenues compared to budgeted expenses which allowed CPA to adjust airport rates and extend the implementation of the Airline Incentive Program.

He pointed out that CPA’s responsibility to maintain the operation of three air transport facilities in the Northern Marianas, without the legislative appropriations, restrains the agency’s capability to further reduce airport charges.

The CPA official stressed, however, that the agency has been consistently willing to explore alternative means in which it can help revitalize the CNMI economy in accordance with the economic blueprint prepared by the administration of Gov. Pedro P. Tenorio.

In December 2000, CPA reinstated the Airline Incentive Program retroactive from Nov. 1, 2000 to Sep. 30, 2001, while adopting a gradual increase on the departure facility charge from Jan. 1, 2001 to the Fiscal Year 2004.

The Airline Incentive Program gives signatory airlines 50 percent discount on departure facility charge if they are able to bring their visitor traffic 15 percent above their current passenger haul.

Mr. Palacios said CPA can only do so much. “While we are not able to heed to the calls by the Strategic Economic Development Council, CPA, in its own little ways, has always been willing to help revive the economy.”

CPA has also decided to adjust departure facility charge from the current $8 per passenger to $6.35 beginning Jan. 1, 2001. The new rate will be in effect until Sept. 30, 2001.

Mr. Palacios stressed that the new rate was agreed upon in consideration of the extension of the Airline Incentive Program until Sept. 30, 2001 and the agency’s current financial obligations including repayment of the $53 million bond floated in 1998.

The Airline Incentive Program will also be extended to airline companies that are servicing new routes, including those recently launched like Mandarin Airline’s service to Taipei, Asiana’s Pusan route, and Japan Airlines’ Osaka and Fukuoka service.

The CPA Board decided to extend the Airline Incentive Program and roll back the $8 departure facility charge to $6.35 due to presentations made by financial consultant Rex Palacios who noted that CPA’s actual revenue is higher than the projected yield.

The SEDC earlier lauded efforts by the ports authority to strengthen the CNMI’s competitiveness as a prime tourist destination, by rolling back airport charges that made it easier to sell the Northern Marianas as a destination to airline companies.

The decision also came following projections by airline companies plying the Northern Marianas route that passenger haul from major cities in Japan and South Korea is showing good promise of growth in the next months.

Most carriers disclosed an average of five percent increase in the projected number of passenger traffic to the Northern Marianas this year.

Continental Micronesia stressed it will maintain its current schedule with the deployment of four nonstop Saipan-Osaka flights per week starting February 1, 2001 to accommodate the expected influx of Japanese tourists during the summer.

Japan Airlines and Northwest Airlines both projected an increase of five percent in passenger traffic, while Asians Airlines anticipates visitor arrivals from Seoul and Pusan in South Korea to grow by a whooping 35 percent.

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