BECAUSE the administration of Gov. Arnold I. Palacios and Lt. Gov. David M. Apatang wants to help airlines, the Commonwealth Ports Authority is giving them discounts on landing and terminal rental fees.
In an interview on Wednesday, CPA Executive Director Leo B. Tudela said they have come up with a “formula” in response to the administration’s request to give airlines some sort of “relief.”
Tudela said for the first quarter of fiscal year 2024, the airlines can pay CPA the old rates that were in effect from Oct. 1, 2023 to Dec. 31, 2023.
Then, for the Jan. 1, 2024 to March 31, 2024 period, the airlines will get a 50% discount on the new rates, and from April 1, 2024 to Dec. 31, 2024, they will receive a 25% discount, provided that there is a 10% increase in the number of their passengers.
Tudela noted that prior to the beginning of fiscal year 2024, the previous CPA board increased the airport fees, and it took effect on Oct. 1, 2023.
Last year, CPA’s consultant, Ricondo & Associates advised the previous board that the debt service ratio requirement of 1.25 would not be met unless additional revenue was generated or expenditures were reduced.
In consideration of the consultant’s recommendation, CPA’s previous board increased the terminal rental rate at Francisco C. Ada/Saipan International Airport to $34.92 from $19.49 or a 79% increase, and the landing fee to $15.25 from $8.01 or a 90% increase. These increases, according to the previous board, were necessary to meet the debt service ratio of 1.25, which CPA is required to maintain under the 1998 bond indenture agreement with the Bank of Guam.
Then-CPA attorney Robert T. Torres said if CPA failed to meet its debt service ratio requirement, it could be placed under receivership.
Tudela said he and the other new CPA officials want to reduce the airport fees so they can be “more reasonable or acceptable to the airlines.”
“So we have been addressing this with the governor, who [wants us to] help the airlines. We should reduce the rate or bring back the old rate that was there before Oct. 1, 2023. The governor wants to make sure that airlines should be given some sort of reasonable rates,” Tudela said.
He said CPA has been working with the airlines on this issue for the last five months.
