But despite the looming global oil crisis, Jerry Tan, board chairman of the Marianas Visitors Authority, assured that Northwest Airlines’ plan to add flights to Saipan from Tokyo next month will push through as scheduled.
“They (Northwest) will launch the July 1 (inaugural flight for the daily flights) as scheduled,” he told Variety yesterday during the MVA general membership meeting.
However, he noted that with the global tourism industry becoming more competitive due to the oil crisis, destinations like the CNMI must offer some incentives to airlines to ensure that they recoup their expenses.
There are only two international airlines left serving the islands’ major tourism markets of Japan and South Korea — Northwest Airlines and Asiana Airlines.
Tan said they are now communicating with these airlines to see how the government tourism agency can assist them to continue sending tourists to the islands.
He said aviation fuel is a major factor in the operation of any airline. Each time the price of crude oil in the international market rises, the prices of aviation or jet fuel also increase.
“We’re extremely concerned because fuel is the biggest component of any airline’s overhead so with soaring fuel prices we have already started to see bankruptcy and most of the major airlines have announced reduction of their flights, in other words, reducing their capacity, laying off employees and that translates to cutting off flights,” Tan told Variety.
“Every destination, not just the CNMI ought to be concerned about this. We are communicating very closely with our two major airline partners namely Northwest and Asiana,” added Tan. “We’re doing whatever we can to make sure that we give them the support that they need and we talked about raising our yields on the package. It would allow better margin for the airlines.”
MVA officials have asked the Legislature to increase their promotional funds to help the remaining airlines serving the Saipan route effectively promote the destination in Japan and South Korea.
“We have appeared twice on the budget hearing and we explained to them that because of additional flights, we need additional marketing dollar…. But we’re still waiting for the result,” said Tan.
More flights this year
Starting next month, Northwest which recently merged with Delta Airlines making them the world’s biggest carrier, will have a total of 28 flights between Japan and Saipan.
The move is projected to bring about 30 percent more or roughly 60,000 more Japanese tourists to the islands who could potentially infuse about $80 million in economic activities in a year’s time.
NWA will use Airbus A330 jet for its additional flights.
A Japanese tourist typically spends about $1,332 per travel to the CNMI, thus, the increased tourist arrivals rate is projected to yield to that much.
Although there are fewer flights from Japan coming to Saipan, Japanese tourists still account for more than 60 percent of visitors to the islands.
MVA records show before Japan Airlines abandoned the route in Fiscal Year 2005, a total of 529,557 tourists came to the islands — majority of them from Japan.
A year after JAL left, the islands’ tourist arrivals rate plunged to 443,812.
In FY 2007, tourist arrivals rate further dropped to 395,360.
MVA said the limited airline seats are not the only challenges facing the local tourism industry but promotional funding is also an issue.
With limited resources available, MVA said it continues to explore publicities through different media outlets in Japan, South Korea, China and Russia.
About $18 million worth of advertising exposure were gained by the CNMI through this strategy.
Tan said Asiana Airlines remains committed on the Saipan route.
The airline is scheduled to increase its four times a week day-time flights to nonstop seven days a week starting Oct. 1.
“They (Asiana) are now looking at increasing their day time flights from four times a week to daily starting Oct. 1,” said Tan.
Asiana, however, said this plan is contingent upon the price of aviation fuel and the demand for the destination.
