”DFS cuts work hours

DFS Galleria, the biggest shopping venue in the Northern Marianas, has cut employee hours in anticipation of the economic impact of Japan Airlines’ pullout from Saipan.

Marian Aldan-Pierce, president of DFS Galleria Saipan, said yesterday that the duty free store has trimmed the work hours of its employees from 36 hours down to 32 hours weekly. The reduction was implemented two to three weeks ago, as part of DFS Saipan’s contingency plan for its business.

“We’ve been looking at areas to cut our costs, or contain our costs. One of the first things that we have already done is to cut our employees’ hours. We continue to find ways to mitigate the loss that we expect we will have,” Aldan Pierce said.

JAL will cease operating its regular, scheduled flights from Tokyo and Osaka to Saipan—and vice versa—effective Oct. 4, 2005.

A June 2005 study by Economists.com, a U.S.-based economic and financial consulting firm, showed that JAL’s pullout could mean a loss of $216.2 million in economic output annually if none of JAL’s airlift capacity is picked up by other carriers.

Such a scenario could also result in the loss of 2,550 jobs and $38.8 million in personal income annually, according to Economists.com.

Northwest has announced a plan to replace the Osaka service in October. But the new flight would not be enough to fill the vacuum that will be left behind by JAL.

The new service, which will provide direct daily access from the Kansai International Airport, will be serviced by 182-seat aircraft—a downsize from the 240-seater Boeing 767 currently used by JAL.

Northwest’s flight represents 66,430 seats annually, a 24-percent drop from JAL’s current capacity of 87,360 seats per year.

JAL’s Tokyo-Saipan flight operates daily using DC 10 aircraft, with 260 passenger seats. The service provides the CNMI a capacity of 94,640 seats.

Aldan-Pierce, who also serves as co-chair of the Strategic Economic Development Council and vice chair of the Marianas Visitors Authority board of directors, said that many people are still unaware of the impact that JAL’s pullout will have on the local economy.

In view of this, she said, DFS Galleria had been meeting with all its business partners and sharing with them the study by Economists.com.

“We’ve also met with all the taxi [companies] and we’ve explained to them what to expect because I think sometimes, people forget to talk to the industry partners out there who may not have access to this type of information,” she said. “So we’re educating the people basically—that it was critical, it continues to be critical, and it will be critical for the next two years and people have to realize that and buckle down.