CPA to seek subsidy from US DOT for operational needs
The Commonwealth Ports Authority will be asking the U.S. Department of Transportation this week for supplemental assistance so it could continue operating.
During a CPA general board meeting last Thursday, CPA addressed its plans to submit a letter for assistance to the US DOT, with the letter intended to address CPA’s need for supplemental assistance for operations this coming fiscal year, according to CPA chair Kimberlyn King-Hinds.
“Right now, we are way below our revenue collection to be able to be self-sustainable for the next fiscal year. Given the current levels of arrival, and the new policy that the government has issued…not to support the reopening of the China market, we’re going to have to fill that hole from somewhere,” she said.
King-Hinds said it’s imperative that CPA find an alternate source of funding to ensure that the cost to land in the CNMI does not deter other airline partners from doing business in the CNMI.
“CPA does not take a position in regards to which markets [we have] but our job is to be able to run the ports for the airlines to land. So, in the absence of the China market, there needs to be an alternative answer and until such time that we find an answer, we need assistance because we cannot grow the Japan or Korea market if we’re still at the current level and we’re not getting additional subsidy. It would make the cost of landing here cost-prohibitive. That’s the gist of the letter, basically to ask for supplemental assistance with regards to the operations under the current authority,” she said.
King-Hinds stated that it would take roughly $9 million for CPA to carry on it operations at its current rates, so that is the amount they are seeking.
“This year, about $9 million is what’s supporting our operations and that is what remains of our [American Rescue Plan Act] funds so what we’re hoping for is the same amount for next fiscal year. That would be ideal and that would allow us to pass on the savings to our partners,” she said.
During a previous Senate session, CPA stated that, faced with a significantly decreased revenue and its ARPA funds nearly depleted, the most viable option so it could survive would be to impose higher rates, which could lead to a loss in the number of the CNMI’s airline partners.
CPA fears that, if no subsidy can be provided for CPA to continue operations, it may have to soon increase its airport rates just to get by, possibly risking the loss of airline partners.