Jeju offered rate subsidy, T’way and Asiana want in

Gov. Arnold I. Palacios has committed to providing a rate subsidy to Jeju Air but has yet to make payments. In addition, Asiana Airlines and T’Way Air Co., Ltd have inquired whether they can get in on the rate subsidy offered to Jeju by the central government.

Last July 24, Palacios sent a letter to Commonwealth Ports Authority board chair Joe Ayuyu committing the central government to reimbursing the differential between old and new rates invoiced to Jeju Air from October 2023 to May 2024.

According to a breakdown from CPA, the invoice amount billed to Jeju Air reflecting the new rates is equivalent to $2,098,478.15.

When calculated based on CPA’s old rates, the invoice billed was $1,133,009.36.

For Jeju not to pay the invoice based on the new rates (as implemented last October 2023), the central government must reimburse CPA and pay the difference of $965,468.79 as committed by Palacios.

However, in a letter addressed to Palacios from CPA dated Aug. 21, the promised reimbursement has yet to be paid to CPA.

“As the fiscal year approaches its end, CPA finds itself at a substantial deficit. Therefore, CPA respectfully requests an expected timeframe for the assured reimbursement,” said CPA executive director Leo Tudela.

In addition, Tudela said Asiana and T’way have expressed interest in availing of the rate subsidy offered to Jeju.

“Asiana Airlines and T’way Air have inquired whether they may avail of the same offer as Jeju Airlines. Without similar assurances for other airlines, CPA must start collecting on the unpaid balances, in the near future,” said Tudela.

According to Saipan Tribune archives, back in September 2023, the previous CPA board adopted a new rate methodology that reflected a 90% increase in landing fees and a 79% increase in terminal rental fees which makes up CPA’s fiscal year 2024 budget.

The increase took effect in October 2023.

With the adopted budget, the CPA terminal rental rates for the Francisco C. Ada/Saipan International Airport’s main terminal went up from $19.49 per square foot to $34.92. Meanwhile, the terminal rental rates for all CNMI commuter terminals went up from $7.79 to $13.97.

As for landing fees, with the 90% increase, CPA charges international airline carriers $15.25 per thousand lbs of certified maximum gross landing weight of the aircraft; they were previously being charged $8.01. As for CNMI commuter terminals, the 90%-increase brings landing fees up from $4.81 to $9.15.

Gov. Arnold I. Palacios