COMMONWEALTH Ports Authority Executive Director Leo B. Tudela is reminding Gov. Arnold I. Palacios about the $965,486 that the Francisco C. Ada/Saipan International Airport did not collect from Jeju Air due to the restoration of the old landing and terminal fee rates.
On July 2, 2024, the governor made a commitment to reimburse CPA the difference between the old and new rates invoiced to Jeju Air from Oct. 2023 to May 2024.
The invoiced amount based on the new rate was $2 million. But CPA allowed Jeju Air to pay only $1,133,009 following the CPA board’s decision, as recommended by the governor, to reimplement the airport rates charged to commercial airlines prior to Oct. 1, 2023.
In his follow-up letter to the governor last week, Tudela said as the final year approaches its end, CPA “finds itself at a substantial deficit. Therefore, CPA respectfully requests a timeframe for the assured reimbursement.”
He also informed the governor that Asiana Airlines and T’Way Air Co. Ltd. have inquired whether they may avail themselves of the lower rates provided to Jeju Airlines.
But Tudela said “without similar assurances for other airlines, CPA must start collecting on the unpaid balances, in the near future.”
In August 2023, the previous CPA board, heeding the advice of Ricondo & Associates, increased the airport fees, which took effect on Oct. 1, 2023.
Ricondo & Associates had told the board that the debt service ratio requirement of CPA’s bond would not be met unless additional revenue was generated or expenditures were reduced.
In May 2024, as suggested by the governor, the CPA board approved a resolution reimplementing the airport rates charged to commercial airlines prior to Oct. 1, 2023.
In June 2024, the CPA board adopted a resolution allowing CPA to use funds collected from the U.S. Air Force for the lease of land designated as a divert airfield on Tinian to pay for CPA’s $8 million debt so it could reduce its airport fees.
