CNMI FILES PROTEST AGAINST CONTINENTAL AIRLINES

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By Aldwin R. Fajardo

SAIPAN, Northern Mariana Islands (April 17, 2000 – Saipan Tribune)---The Commonwealth Ports Authority on Friday wrote the U.S. Department of Transportation decrying Continental Micronesia's treatment of Saipan and Guam as co-terminals, which CNMI officials claimed has adversely impacted CNMI's tourism industry.

This is the first formal protest lodged by the CNMI government against the decision of the Continental Micronesia to drop direct international flights to and from the Northern Marianas.

In a letter addressed to the federal transportation department, Ports Authority Board Chair Roman S. Palacios said CPA could not rally behind Continental's application to renew its regular flights to Sapporo and Sendai in Japan.

The Micronesian islands' flag carrier is seeking to renew its five weekly Saipan-Guam-Sapporo flights and daily Saipan-Guam-Sendai air transport service.

While Continental Micronesia expresses the intention to operate five weekly Sapporo and daily Sendai flights in its renewal application, CPA officials said this does not mean there will be direct flights between Saipan and Sapporo or Saipan and Sendai.

This is because the carrier's renewal application continues to treat Guam and Saipan as co-terminals.

Under its existing authority obtained from the Department of Commerce, Continental Micronesia can operate air transport service between Saipan and Guam as co-terminal points and Sendai and Sapporo.

The current arrangement makes it appear that from the point of view of the U.S. and Japan, a service to either Saipan or Guam is a service to both islands.

"We wish to register our strongest disappointment in no uncertain terms, with the practical effect of the certificate which treats Guam and Saipan as co-terminals," said Mr. Palacios and CPA Executive Director Carlos H. Salas in a signed letter.

The ports authority is asking the transportation department to instead recognize that Guam and Saipan are separate destinations, with each deserving of independent service by Continental Micronesia.

While CPA admits that CNMI, Guam and the carrier have taken advantage of the arrangement in the past through direct flights to both Guam and Saipan, Continental Micronesia has since stopped providing direct international flights to and from the Northern Marianas.

"Continental Micronesia has since unilaterally decided to serve only Guam directly, leaving the CNMI with no alternative, no direct service and a dramatic loss in passenger arrivals over the past three years," Mr. Palacios and Mr. Salas said.

Visitor arrivals figures into the Northern Marianas plunged by 27 percent from a peak period growth of 647,945 in 1997 to 471,880 in Fiscal Year 1998.

In 1997, Continental Micronesia had more than 700 direct Japan-Saipan flights each year. The carrier does not currently have even a single direct flight between Saipan and Japan.

Mr. Palacios said Continental Micronesia's decision to drop all direct international flights to and from Saipan resulted in an economic tumble, which continues to have a profound and lasting effect in the CNMI's ability to function as a tourist destination.

Mr. Salas said granting a blanket authority to any U.S. carrier to provide service to Guam and Saipan as co-terminals is a genuine disservice to the people of the CNMI who should be allowed to have direct service from any U.S. carrier willing to accept Saipan-only authority.

"The Commonwealth is not Guam. It now more than ever needs to have its own air service, separate and distinct from the air service of Guam. [The existing arrangements with Guam and Saipan as co-terminals] truly hurts the Northern Marianas' economy, which is almost entirely dependent on direct air service for its tourist industry," the CPA officials said.

Continental Micronesia officials previously claimed that public debate on the effectiveness of the connecting service between Guam and Saipan is discouraging tour wholesalers in Japan from booking their customers in Saipan packages.

They said the situation hurts Saipan, helps Guam and does not affect the airline at all.

At the same time, Continental Micronesia's Japan Distribution System indicates that the retail rate for Saipan tour packages is higher by at least 2,000 yen to 5,000 yen than the Guam rate, although the airline sells both destinations to wholesalers at the same rate.

For additional reports from The Saipan Tribune, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The Saipan Tribune.

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