‘CPA gave partners $817,019 in discounts using ARPA funds’
King-Hinds claims that Star Marianas Air owes CPA $4.7M in aviation and other fees as of Jan. 31, 2023
The Commonwealth Ports Authority gave all its tenants/partners a total of $817,019 aviation discounts covering the period from July 2020 to December 2021 using CPA’s American Rescue Plan Act funds, according to CPA board chair Kimberlyn King-Hinds yesterday.
Appearing before the Senate Public Utilities, Transportation and Communications hearing yesterday, King-Hinds said that CPA did provide everybody a discount from July 2020 to December 2021, under their COVID-19 Tenant Relief Program-Aviation Discounts, once CPA received its ARPA funds.
Senate PUTC chair Sen. Paul A. Manglona (Ind-Rota) called for the public hearing to discuss with CPA and the Marianas Visitors Authority what they’re doing to address the CNMI’s air transportation challenges with regards to interisland travel. Manglona wants to know from the existing interisland airline companies how the government and Legislature can assist them.
Senate President Edith E. DeLeon Guerrero (D-Saipan) said the hearing is a great opportunity to have a candid and open conversation regarding the issues facing the CNMI’s interisland transportation with all the service providers.
“I think the Senate is open, and I personally would like to hear from all the parties and see we could address the issue once and for all,” said DeLeon Guerrero at the start of the hearing.
On the issue of aviation discounts, King-Hinds said that from July 2020 to May 2021, they gave everybody 50% aviation discount, and from June 2021 to December 2021 they gave everybody 100% discount.
“So we took whatever ARPA funds that we had, and gave everybody a 50% discount initially, and then a 100% discount,” she said.
King-Hinds said from the period of July 2020 to December 2021, they gave United Airlines a discount of $281,214; Star Marinas Air, $346,471; Jeju, $346,471; Asiana, $47,855; POI, $817; MACS, $45,420; and T’Way, $50,729—for a total of $817,019.
With the $346,471 discount given to Star Marianas Air, Senate President DeLeon Guerrero asked SMA board chair Bob Christian how much the passengers benefited from this discount.
Christian said the discounts that CPA is alluding to weren’t really discounts as the port is only allowed to charge them for the costs they incur.
“Therefore if they received ARPA funding, they don’t have those costs, they therefore can’t pass those costs on the airlines,” Christian said.
He said CPA characterizes that as giving discounts.
As to how much the passengers benefit, Christian said it’s hard to say because they still record everything on their books. “So it’s generally just a bookkeeping issue,” he pointed out.
King-Hinds disagreed with the characterization that this is not a discount. She said they are one of the very few airports in the United States that took those ARPA funds and passed it on as savings to their partners.
“Because we saw that we all needed to get through the pandemic together,” King-Hinds said.
King-Hinds said the record is clear: Star Marianas Air didn’t pass on any savings to the consumers and the record is clear that the company owes CPA over $4.7 million in aviation fees, miscellaneous fees, airline settlement, and interest, as of Jan. 31, 2023.
The CPA chair said their job is basically is to keep the airports open.
She said they hope that they all try to work together to figure out how to find alternatives sources of funding or support Marianas Visitors Authority in their efforts to bring back the tourist markets.
“We need the airport for airlines to land and the more airlines that land, the cheaper it is for everybody who is doing business with CPA. It’s just basic economics,” King-Hinds pointed out.