Continental decision to cost CPA $43K

The Commonwealth Ports Authority stands to lose some $43,000 in annual revenues as a result of Continental Micronesia’s decision to suspend nonstop service between Saipan and Taiwan.

The direct flight has brought in over 2,500 passengers to the Northern Marianas over the 10 months that it has been in operation. “In terms of dollar value, the termination of this flight will cost us about $43,000 annually,” CPA executive director Carlos Salas said.

Continental launched the service on Nov. 3, 2004 and has announced a plan to terminate it effective Oct. 31, 2005. As an incentive for flying from a previously “unserved” market, Continental received 50 percent discount on airport fees during the entire year it operated the Taipei service.

Salas said that Continental realized savings of about $21,000 through CPA’s airline incentive program.

While Salas had yet to receive an official notice from Continental regarding the flight suspension, he said he had several flight proposals that the airline could explore as replacement for the Taiwan service.

CPA will ask Continental to start direct flights from Pusan or Seoul in Korea; increase the frequency of the existing twice-weekly Manila service; introduce new flights from Japan; or increase jet service between Saipan and Guam.

“We hope we can get Continental to sit down with us to discuss these other opportunities,” Salas said.

For its part, the Marianas Visitors Authority announced a plan to use Taiwan funds for promoting CNMI in other markets.

“Due to this unexpected suspension by Continental Micronesia, the MVA will allocate the existing Taiwan promotions to potential markets such as China and Russia,” MVA said.

The tourism agency cited its efforts to stimulate demand in the Taiwan market since the Taipei service was introduced in November 2004. MVA said it had joined Continental Taiwan with destination promotions such as travel agent and media familiarization tours, advertising in several publications, and the Continental Taiwan Golf Tournament.

Still, MVA said that, although visitor arrivals from Taiwan were minimal, the market still had a potential through other routes.

Continental said the suspension of the Taiwan service was a result of various factors including the increasing fuel costs, declining fares, and weak market demand.

Japan Airlines has also cited the same reasons for deciding to cease regular service from Japan to Saipan beginning Oct. 4, 2005.