Senate supports unlimited air services from China

The CNMI Senate has sent to the U.S. Department of Transportation a letter of support for the reinstatement of a provision of the U.S.-China Air Transport Agreement, stating that the airlines of the People’s Republic of China may provide unlimited scheduled air services between the People’s Republic of China and Guam and the Northern Mariana Islands.

The Senate’s letter also supports the Commonwealth Ports Authority’s request for U.S. DOT to exempt the CNMI from federal limitations on scheduled Chinese air service from China to the CNMI.

Senate President Edith E. DeLeon Guerrero (D-Saipan) wrote the letter dated Jan. 18, 2024 and addressed to DOT secretary Pete Buttigieg.

DeLeon Guerrero wrote to Buttigieg that with no U.S. airline providing scheduled passenger service between China and the CNMI and no other economic industry present to support employment, commercial activity, and government revenues, the imminent collapse of the tourism industry will have repercussions for the future of the CNMI that will last for years.

She said the U.S.-China Air Transport Agreement of 2007 states the desires of both the U.S. and China to increase travel and tourism between their countries, promote liberalization of their transport market, and facilitate cooperative agreements between their air carriers.

The president said Article 6 of the 2007 Agreement created a new Annex 6 that also stated that the airlines of the U.S. may provide unlimited scheduled air services between three points in the PRC and Guam and the NMI.

The points selected by the U.S. in the PRC shall not include either Beijing or Shanghai.

The U.S. shall notify the PRC in writing of the points it has selected with at least a 30 days’ advance notice.

The points selected may be changed at the discretion of the U.S. with no less than 30 days’ written notice.

Annex 6 also stated that air services provided shall not be subject to limitations as to the number of designations or frequencies.

DeLeon Guerrero said pursuant to Annex 6, Chinese carriers gradually increased air service to the CNMI since 2007 and the Chinese tourists comprised about 40% of the total tourist market by 2018.

She said subsequently, the COVID-19 pandemic disrupted air transportation and both the U.S. and China restricted international flights to and from their countries.

The U.S. DOT suspended all Chinese air carriers operating from China to the U.S. on June 16, 2020. China resumed its internationals passenger flights on Dec. 30, 2022.

Subsequently, the U.S. DOT authorized 12 flights per week from China to the U.S. on May 23, 2023, increased the flights to 18 flights per week on Aug. 11, 2023, further increased the flights per week by Oct. 29, 2023.

DeLeon Guerrero said, however, the limited number of authorized China to U.S. flights per week makes it difficult for the CNMI to compete against destinations like Los Angeles and New York, and therefore, CPA is requesting an exemption from the flight limitations.

She noted that as highlighted by CPA, the direct impact of losing the Chinese tourism market based on the year 2019 number of Chinese visitors is approximately $126.4 million and the direct economic impact loss is $204.7 million, for a total of $331.2 million economic impact loss for the year.

The president said the direct economic impact loss of $126.4 million from the Chinese tourism market represents almost half of the CNMI’s pre-pandemic general revenues each year.

DeLeon Guerrero noted that this revenue shortfall made it impossible for CNMI government to fully fund its personnel and operations for fiscal years 2023 and 2024.

She said the loss of Chinese visitors to the CNMI impacts all sectors of the economy including the hotels and resorts.

Edith E. DeLeon Guerrero