{"id":413202,"date":"2024-09-17T14:00:00","date_gmt":"2024-09-17T14:00:00","guid":{"rendered":"https:\/\/www.saipantribune.com\/?p=413202"},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-29T14:00:00","slug":"Star-Marianas-seeks-FAA-probe-into-CPA-fee-structure","status":"publish","type":"post","link":"https:\/\/www.saipantribune.com\/index.php\/Star-Marianas-seeks-FAA-probe-into-CPA-fee-structure\/","title":{"rendered":"Star Marianas seeks FAA probe into CPA fee structure"},"content":{"rendered":"

The plot thickens in the ongoing \u201cfees\u201d feud between Star Marianas Air, Inc. and the Commonwealth Ports Authority with the airline now in the process of demanding an investigation into CPA\u2019s fee-setting practices arguing that CPA is coercing airlines to pay unfair fees.<\/p>\n

Yesterday, Star Marianas board chair Robert Christian sent a letter to CPA board chair Jose Ayuyu informing the agency that Star Marianas will no longer be tolerating its \u201cscheme to bypass federal fee setting regulations\u201d by \u201ccoercing airlines into compliance with non-compensatory fees.\u201d<\/p>\n

\u201cI am writing to formally and unequivocally object to the unethical and coercive tactics employed by the CPA under the Commonwealth of the Northern Mariana Islands Administrative Code Title 40, Subchapter 40-10.1: Airport Rules and Regulations (NMIAC 40-10.1). It is abundantly clear that the CPA, in coordination with its legal counsel and consultants, has engaged in a deliberate scheme to bypass federal fee setting regulations, coerce airlines into compliance with non-compensatory fees, and subvert the principles of fairness mandated by the Federal Aviation Administration. This egregious behavior cannot and will not be tolerated,\u201d he said.<\/p>\n

Christian informed Ayuyu that Star Marianas intends to file a formal complaint with the FAA and will be demanding an investigation into CPA\u2019s fee-setting practices.<\/p>\n

\u201cWe will be filing a formal complaint with the FAA, calling for an immediate investigation into the CPA\u2019s fee-setting practices, its use of the Letter of Authorization process, and its clear violations of Grant Assurances 22 and 24. The FAA has the authority to launch a comprehensive investigation into these practices,\u201d he said.<\/p>\n

Christian adds that Star Marianas will be urging the FAA to take corrective action to include sanctions and penalties.<\/p>\n

\u201cWe will be urging the FAA to take corrective action, including but not limited to: the invalidation of NMIAC 40-10.1, the imposition of penalties or sanctions on the CPA for its abusive fee-setting practices, and a requirement that the CPA return to a transparent, compensatory fee model that complies with FAA standards,\u201d he said.<\/p>\n

In his letter, Christian explains that CPA\u2019s requirement that airlines must accept all CPA rules and regulations, including the fee setting methodology, upon issuance of a Letter of Authorization, is a blatant act of coercion designed to eliminate any opportunity for airlines to negotiate or challenge its terms.<\/p>\n

By linking operational access to this acceptance, Christian said, CPA has created a scenario in which airlines are left with no choice but to accept CPA\u2019s demands or risk losing access to critical airport infrastructure.<\/p>\n

\u201cThis is not only coercive but represents an abuse of regulatory power and authority. FAA Order 5190.6B, Chapter 18, explicitly mandates that non-compensatory fee-setting models must be mutually agreed upon. The CPA\u2019s approach, which forces airlines to accept terms under duress, flagrantly violates this requirement. CPA\u2019s insistence that airlines automatically accept these terms upon receipt of the LOA, without any opportunity for review, negotiation, or objection, is nothing short of a violation of the FAA\u2019s regulatory framework,\u201d he said.<\/p>\n

In addition, Christian claims CPA, its legal counsel, and its outside consultants are \u201ccolluding\u201d to impose a fee structure that not only circumvents federal regulations but also serves their mutual financial interests at the expense of the airlines.<\/p>\n

\u201cThe issuance of a rate book that lacks transparency and bundles arbitrary costs, combined with the unilateral imposition of terms through the LOA, is clear evidence of a coordinated effort to force airlines into accepting inflated and unjustified fees. The CPA\u2019s consultants, who have consistently provided flawed and misleading advice under the guise of \u2018industry standards,\u2019 are complicit in this effort. Their role in crafting a rate book that is deliberately opaque and lacking in detail further supports the conclusion that this is a calculated effort to obscure the true costs being imposed on airlines. Moreover, the fact that CPA\u2019s legal counsel has facilitated this process by drafting and enforcing regulations like NMIAC 40-10.1 only underscores the degree to which this collusion has been institutionalized,\u201d he said.<\/p>\n

FAA violations<\/p>\n

Furthermore, Star Marianas claims that CPA\u2019s actions represent clear violations of several FAA regulations, specifically Grant Assurance 22: economic nondiscrimination, Grant Assurance 24: fee and rental structure, and FAA order 5190.6B.<\/p>\n

For Grant Assurance 22: economic nondiscrimination, Christian claims the CPA\u2019s fee-setting process (which he alleges forces airlines into accepting non-negotiable terms) is a violation of this assurance as it requires that all airport users be treated fairly and without discrimination.<\/p>\n

\u201cCPA\u2019s conduct creates a two-tiered system: One where the CPA dictates the terms, and another where airlines have no recourse but to comply or face operational restrictions,\u201d he said.<\/p>\n

As to Grant Assurance 24: fee and rental structure Christian explains that the FAA mandates that airport fees must be compensatory and tied to the actual costs incurred by the airport.<\/p>\n

However, Star Claims that CPA\u2019s rate book is filled with inflated charges and bundled costs for services airlines may not even use, and this flies in the face of this requirement.<\/p>\n

\u201cThis is not only a breach of FAA rules but a deliberate attempt to extort airlines through hidden charges and unjustified fees.<\/p>\n

Lastly, touching on FAA Order 5190.6B, Christian claims that the CPA\u2019s systematic effort to \u201cforce airlines into accepting its non-compensatory fee structure\u201d without mutual agreement or transparency is a direct violation of this FAA order.<\/p>\n

\u201cThe requirement for mutual consent is not optional, and the CPA\u2019s use of the LOA process to impose terms without negotiation shows a blatant disregard for federal oversight and accountability,\u201d he said.<\/p>\n

Christian states in his letter that should the CPA fail to take immediate corrective action, Star Marianas and other affected airlines will pursue litigation to challenge the legality of NMIAC 40-10.1 and the CPA\u2019s alleged coercive tactics.<\/p>\n

\u201cWe will argue that NMIAC 40-10.1 is invalid due to its coercive nature and failure to comply with federal aviation law; the CPA\u2019s fee-setting practices are in violation of FAA guidelines (particularly the requirement that fees be compensatory and mutually agreed upon); and the collusion between the CPA, its legal counsel, and its consultants represents an unlawful scheme to extract excessive fees from airlines,\u201d said Christian.<\/p>\n

Christian further states that Star Marianas is demanding immediate corrective action on CPA\u2019s part by stopping the use of the LOA process; provide full transparency in its rate book, with a detailed and itemized breakdown of all fees and services in line with the compensatory fee model; initiate a formal negotiation process with airlines regarding any non-compensatory fee structures in compliance with FAA Order 5190.6B; and discontinue the use of any practices or regulations that involve collusion with consultants or legal counsel to obscure the true costs being imposed on airlines.<\/p>\n

\u201cFailure to take these actions will result in immediate FAA complaints, litigation, and a coordinated effort by the affected airlines to seek full regulatory and legal remedies,\u201d he said.<\/p>\n

Saipan Tribune has reached out to CPA for a comment, but they have yet to issue a statement.<\/p>\n

<\/p>\n

A file photo of one of the planes of Star Marianas Air, Inc.<\/p>\n

-KIMBERLY ESMORES
<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

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