Micronesia chief executives urged to invite air competition, bid all government travels
Tag: CNMI, Guam, Saipan Chamber, United Airlines
Former KMCV News reporter/anchor turned Hawaii State Senator Glenn Wakai has encouraged five entities in Micronesia, including the CNMI, to come together and put out a bid from airlines all government travel between their islands to significantly reduce airfare price, which he described at present as astonishing.
“Complaining for decades has gotten nowhere and made the airlines rich at the expense of residents,” said Wakai in an interview.
Instead of just accepting the status quo, Wakai said, it’s about time for Micronesian leaders to “play offense.”
The senator came to Saipan two weeks ago with former Honolulu mayor Mufi Hannemann, who is the founder of the Pacific Century Fellows Program and established the PCF CNMI Chapter three years ago. In addition to talking to PCF fellows, Wakai also spoke to the Saipan Chamber of Commerce board of directors about casino growth.
Last year, the Hawaii State senator offered this idea to invite air competition to Palau President Tommy Remengasau by having the chief executives of Palau, CNMI, Guam, Federated States of Micronesia, and Republic of the Marshall Islands sign a memorandum of agreement stating that all government travels between their islands should be put out to bid.
“If you guarantee revenues for an established carrier they would come,” he said.
Wakai said the Request for Proposal could require that all bids have to come in 50 percent below the current regular fares.
Wakai cited an example that his recent eight-hour flight from Honolulu to Saipan cost $1,700.
He said he was on an eight-hour flight on United Airlines from Honolulu to Chicago two weeks before going to Saipan and the cost of airfare was $800.
The senator said United Airlines uses older planes and veteran staff to traverse Micronesia, so customers are not paying for better service.
“It’s disturbing for the consumers. It’s a pot of gold for United,” Wakai said.
Under his proposal, Wakai said, his trip to Saipan two weeks ago should be $850 instead of $1,700.
He said Micronesia chief executives should make it a five-year contract with the chosen airline so it’s worth a new airline’s investment in the region.
The minimum wages for the five entities in Micronesia are $6.05 for the CNMI; $8.25 for Guam; $3.50 for Palau; $2 for RMI; and $1.25 for FSM.
At these wages, Wakai said he believes that 85 percent of off-island travel is funded by the governments or grants.
Wakai noted that there have been attempts to start small airlines to service the region, but they all failed because of the need for an established carrier to compete with Continental/United.
“If any of the chief executives balk at this idea, ask them to share a better plan,” he said.
Wakai described United’s pricing for flights throughout Micronesia as “astonishing.”
“They are making significant profits on the backs of people who are economically challenged,” the senator pointed out.
Wakai is currently the chairman of Hawaii State Senate’s Committee on Economic Development and Technology and vice chairman of the Committee on Health. He is a member of the Committees on Agriculture, Commerce and Consumer Protection, and Higher Education and the Arts.
Wakai is founder of Reach Out Pacific, a Hawaii-based non-profit organization.
In June 2012, the Saipan and Northern Islands Municipal Council presented Wakai with a commemorative resolution for shipping, through Reach Out Program, over $350,000 worth of medical and school supplies to the CNMI for nearly a decade.