Jet fuel tax earnings rise

Extensive efforts to increase passenger traffic in the Northern Marianas showed positive results in terms of revenues collected from jet fuel taxes during the past four months.

Quoting reports provided by the Department of Finance, the Commonwealth Ports Authority disclosed revenues from jet fuel tax registered a modest growth to $108,000 from October 2000 to January 2001, compared to last fiscal year’s the same period of $106,000.

CPA Board Chair Roman S. Palacios assured that efforts will be beefed up to improve the Commonwealth’s relationship with signatory airline companies, in addition to the Airline Incentive Program that is currently implemented by the ports authority.

The same recommendation was also voiced out by Air Service Committee Chair Robert H. Jones. In a letter to Senate President Paul Manglona, the committee chair urged the Legislature to intensify efforts in order to prevent airlines from discontinuing services to the CNMI.

“It is much easier to keep an existing airline flying to our shores than to get air carriers to start new services,” said Mr. Jones.

Mr. Jones also encouraged the Senate to map out effective proposal to provide the Marianas Visitors Authority additional funding assistance to promote the CNMI to other markets in Asia, including Taipei.

Recently, CPA decided to extend the implementation of an incentive program that gives signatory airlines 50 percent discount on departure facility charge for bringing in visitor traffic 15 percent above their current passenger haul.

CPA Executive Director Carlos H. Salas said major signatory airlines flying Saipan route made an estimated $200,000 savings after the 50 percent rollback implemented by the ports authority.

He said CPA ordered a 50 percent off on departure facility charge since November last year. Signatory airlines usually pay the departure facility charges in advance and CPA has to credit it back to airline companies after the extension of the program.

The CPA Board of Directors approved the adjustment to existing 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.

CPA officials said the new rate reflects the financial outlook for the ports authority, which is currently servicing a multi-million bond floated in 1998 to support improvements projects at both air and sea transport facilities.

The board chair said the adjustment of the airport facility charge per passenger will result to substantial savings on the part of the airline companies without adverse impact on CPA’s capabilities to meet its airport bond indenture.

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 proposal is one of the two options left for the Ports Authority to pay its bond by 2008. (EGA)