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CPA: Terminal fee to greet New Year
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Posted on Nov 21 2004
Passengers departing from any Northern Marianas airport will pay a new $4.50 charge starting next year.
Commonwealth Ports Authority executive director Carlos Salas disclosed on Friday that the U.S. Federal Aviation Administration has authorized CPA to impose the passenger facility charge.
CPA will institute the new fee on January 1, 2005, Salas said. It will apply to both international and inter-island flights departing from any CNMI airport.
Airlines companies would collect the fee through sold airline tickets. The fee is similar to departure/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 FAA and the U.S. Department of Transportation.
Funds that would be generated through the passenger facility charge would also help CPA meet its debt service obligation.
“The federal government approved this because the passenger facility charge will make sure that we can implement all airport improvement projects that FAA has funded or will fund until 2014. The money we will collect from the PFC will ensure the growth of the airport,” Salas said.
He added that the $4.50 charge is “minimal,” as compared with the multi-million-dollar projects CPA is able to undertake using federal funds.
“CPA does not get any appropriation from the [CNMI government’s] general fund. We have to generate our 10-percent share somehow,” Salas added.
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 of 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 for the next 10 years.
The charges are similar to terminal/departure fees that are being collected in the Philippines and Palau, which collect $10 and $20, respectively.
