THE federal government, through the Coronavirus Aid, Relief and Economic Security Act, kept the Commonwealth Ports Authority’s airport operations alive during and after the Covid-19 pandemic restrictions implemented in the CNMI in 2020, according to an independent auditor report prepared and released by Ernst & Young (CNMI) Inc.
CPA operates the Francisco C. Ada/Saipan International Airport, the Francisco Manglona Borja/Tinian Airport, the Benjamin Taisacan Manglona/Rota International Airport, the Seaport of Saipan, the Tinian Seaport and the Rota Seaport.
According to the audit report for the year ended Sept. 30, 2022, CPA had a net position of $224 million for both airport and seaport operations. Net position represents the amount of total assets minus total liabilities.
The report stated that the Covid 19-pandemic continues to have a negative effect on international passenger traffic activity, which has decreased significantly, as flights were suspended indefinitely in February 2020. Operations have not recovered to pre-pandemic levels since then, the report stated.
But CPA was able to fund its airport operations and debt service requirements mainly due to the receipt of a CARES Act grant from the Federal Aviation Administration, which awarded the CNMI $22.7 million in May 2020.
In addition, the report said, CPA also received $5.6 million in Coronavirus Response and Relief Supplemental Appropriations, and $8.5 million in American Rescue Plan Act funds.
The report said these grants have four-year performance periods, and were made available at 100% federal share. They can be used for any purpose that is authorized by law for airport revenues.
The report noted that as of July 2023, four airlines were operating out of Saipan airport, three of them servicing the Korea-CNMI route and one servicing Japan-CNMI and Guam-CNMI routes. One carrier provided inter-island passenger cargo services in the CNMI.
In her report to the board last week, CPA comptroller Skye Lynn A. Hofschneider said actual airport revenues for the past three fiscal years, “have been slowly increasing for aviation and non-aviation activities.” However, she added, “projected revenues remain significantly below pre-pandemic revenue levels.”
She said contractual expenses for fiscal year 2024 are forecast to increase due in part to the anticipated addition of new contracts for the preventive maintenance for generators and incinerator as well as environmental consulting. Additionally, as insurance premium expenses are still unknown for FY 2024, “we are conservatively budgeting an estimated 2% increase,” Hofschneider said.
Last week, the CPA board approved a $13.6 million budget for FY 2024 that includes an eight-hour cut per pay period, the suspension of the airline incentive program, an increase in public parking fees at the Francisco C. Ada/Saipan International Airport, and an increase in terminal rental and landing fees.
In a resolution last week, the CPA board said it had exhausted all other means within its reach, including making multiple requests to the U.S. Department of Transportation and the FAA for supplemental funding.
CPA “deeply regrets the painful necessity of implementing any measure that adversely affects any of its employees, and only does so with great reservation and empathy for its employees.”
