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CPA eyes November implementation of terminal charge
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Posted on Aug 23 2004
The Commonwealth Ports Authority may start implementing the $4.50 passenger facility charge a month later than its October target.
CPA executive director Carlos Salas said the Federal Aviation Administration has already accepted the ports authority’s application to start imposing the additional charge. But while CPA has been getting indications that an approval is forthcoming, FAA has yet to grant its formal consent.
According to Salas, the earliest time that CPA could start collecting the PFC is November. This is based on the assumption that FAA would give its approval by the end of this month. FAA regulations require airport authorities to provide airlines at least 60 days notice before implementing the charge.
Under CPA’s proposal, departing passengers from the CNMI would pay a $4.50 passenger facility charge. Airlines companies would collect the fee through sold airline tickets. The fee is similar to the departure or terminal fees collected by other airports abroad.
Salas reiterated that PFC collection would provide the 10 percent matching fund required of CPA for its airport improvement projects under the U.S. Department of Transportation and the Federal Aviation Administration.
“We can get our 10 percent matching funds for our AIPs from the PFCs and it would also help us meet our debt service obligation, in which we are experiencing shortfall in the last two years,” said Salas.
The implementation of the PFCs is part of the rate study conducted by Ricondo & Associates in an effort to help CPA meet its debt obligations. In the last two years, CPA was placed on credit watch by the Fitch and IBCA rating agency for its failure to meet its obligations.
Also, the new fee is intended to mitigate the possibility of another year of shortfall on the airport side and to finance the 1.25 bond ratio being implanted by the Franklin Fund.
The rest of the money generated would be used to fund CPA’s 10 percent share of all grants that it would be getting in the next 10 years.
