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Airline incentive OK’d to expire to forestall feds
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Posted on Mar 29 2005
The Commonwealth Ports Authority will have to stop offering discounts to airlines that serve new markets as the federal government might start questioning the incentive program’s continued implementation.
CPA executive director Carlos Salas urged airlines yesterday to avail of the 50-percent discount on all airport fees before the incentive program expires on Sept. 30, 2005.
“We’re pressed for time to make this program work. If we continue to extend this kind of discount to the airlines, the federal government will start looking at us and saying this is no longer an incentive, but a revenue diversion [tactic]. They will say we’re not truly implementing the right rate structure,” Salas said. “So there’s a timeline for this program and we’re expecting to let it expire on Sept. 30.”
Meantime, Salas bared plans to introduce a new incentive program for airlines wiling to operate flights during non-peak periods at the Saipan International Airport.
Currently, most flights depart or arrive either in the afternoon or after midnight, causing congestion at these periods.
“We’re looking at offering discounts for flights operated outside these peak hours,” Salas said.
CPA started with two airline incentive programs in 1999, providing carriers a 50-percent discount on airport fees when they surpass their average load factor or establish nonstop flights to “unserved” markets.
Fees waived under these programs are the $8 departure facility service charge and the $2 passenger arrival charge.
The load factor-based program expired on Sept. 30, 2004.
Carriers that recently benefited from the new-market incentive program are Continental Airlines, when it established direct flights from Manila, Hong Kong and Taiwan; Northwest Airlines, when it started daily flights from Nagoya; and China Eastern Airline, when it started charter flights from Shanghai.
Salas said CPA would like to see airlines establishing direct service from new markets such as Haneda, Fukuoka, and Sendai in Japan; Pusan, Korea; and Beijing, China.
