THE Commonwealth Ports Authority board of directors, by a vote of 5 to 1, approved CPA Resolution 2024-4, an emergency regulation to exempt commercial airlines from paying terminal rental fees.
The emergency regulation will take effect for 120 days.
Prior to the vote, airlines were exempted from paying only the landing fees.
The resolution also scrapped the previous board’s decision to increase the airport rates.
In August last year, the previous board was advised by its consultant, Ricondo & Associates, that CPA must meet its debt service ratio requirement of 1.25 by generating additional revenue and reducing expenditures.
The previous board then voted to suspend the discount program. As a result, starting on Oct. 1, 2023, the terminal rental fee at Francisco C. Ada/Saipan International Airport went up to $34.92 from $19.49 or a 79% increase, and the landing fee increased to $15.25 from $8.01 or a 90% hike.
Prior to the vote on Thursday, the exemptions in terminal rental and landing fees applied to commercial aircraft operators only.
Those who voted in favor of the emergency regulation on Thursday were board chairman Jose C. Ayuyu, vice chairman Antonio B. Cabrera board members Steve Mesngon, Dolores Kiyoshi and Joseph Diaz.
Board member Thomas P. Villagomez voted against the resolution while another board member, Ramon A. Tebuteb, voted “present.”
The resolution states that “with the concurrence of Governor Arnold I. Palacios…, it is in the public interest to immediately allow the exemptions currently applicable to landing fees to also apply to terminal rental rates, rent for preferential use premises, common use charges and turn fees.”
However, the exemptions require aircraft operators to submit a valid written agreement with CPA that provides for terminal rental rates, rent for preferential use premises, common use charges and turn fees.
The resolution also authorizes CPA to enter into a written agreement with airlines, on a non-discriminatory basis, to “re-implement the rates that were in place prior to Oct. 1, 2023, as a temporary measure while the special committee constructs an airline incentive program.”
CPA Resolution 2024-4 was on the agenda Tuesday, but Villagomez moved to defer action so they could further discuss the proposed rate exemptions, the re-implementation of old rates and the incentive program.
On Thursday, Tebuteb wanted to open the table for another discussion, saying they should make sure that the board actions were “in order.” He noted that on March 22, 2024, the board voted to give airlines a 50% discount on airport fees, “and now, we are going back to the 2023 rates.”
Tebuteb wanted to know the exact issues the board was acting on.
He also said that the board’s decision on March 22, 2024 to use an updated methodology and give airlines a 50% discount may have violated CPA’s procurement regulations.
He said the discount is also “discriminatory” because it applies only to the airlines that will bring in additional passengers.
Assistant Attorney General Gregory Cenac, for his part, said CPA Resolution 2024-4 “overrides” the board’s March 22, 2024 decision.
Villagomez echoed Tebuteb’s concerns, saying that there was a need to further discuss the matter because there were things he also wanted to clarify.
Ayuyu said the board “can continue to discuss the issues to death. In the meantime, our economy is slowly dying because we are too busy talking and [not making a] decision.”
He added, “I think I gave you a lot of chance to ask questions, and I believe Greg Cenac has done his best to answer them, so I think it’s clear already. And I’m wondering, are we just going to keep talking and talking or what?”
Ayuyu then ended the discussion and called for a roll call vote.
On Tuesday, the CPA board also adopted resolutions to allow 1) CPA to use funds collected from the U.S. Air Force for the lease of land on Tinian designated as divert airfield; and 2) to deposit up to $6 million to the Bank of Guam to pay CPA’s debt under a 1998 bond indenture agreement that committed CPA’s revenue to service the bond’s principal interest.
Paying the debt will allow CPA to reduce its airport fees.
Commonwealth Ports Authority Board Chairman Jose C. Ayuyu gestures as he speaks during a special meeting in the Aircraft Rescue and Firefighting classroom at the Francisco C. Ada/Saipan International Airport on Thursday.
CPA board member Ramon A. Tebuteb listens during a special meeting.
CPA board member Thomas Villagomez speaks
