Facade of Star Marianas main building and hangar in Tinian.
THE Commonwealth Ports Authority’s decision to evict Star Marianas Air from a facility at Francisco M. Borja/Tinian International Airport’s commuter terminal jeopardizes inter-island air services, SMA President/Director of Operations Shaun Christian said.
In an email interview, he said SMA is deeply concerned about CPA’s decision to proceed with the eviction of SMA from its hangar on Tinian.
“This action, if carried out, will have severe consequences, effectively terminating inter-island air service and leaving residents of the Northern Mariana Islands without reliable transportation between Saipan, Tinian, and Rota,” Christian said.
SMA is the only airline that provides inter-island flight service in the CNMI.
This eviction decision, Christian added, “jeopardizes the essential air services that residents and businesses in the Northern Mariana Islands rely on.”
He said SMA is committed to resolving this matter “in a manner that ensures compliance with federal regulations and protects the interests of our communities.”
“We call on CPA to reconsider this action and work collaboratively with STAR to address these critical issues for the benefit of all stakeholders,” he added.
Regarding acting CPA Executive Director Frederick Pangelinan’s letter on CPA’s efforts to provide SMA with detailed financial disclosures and improve fee-setting transparency, Christian said, “While we appreciate CPA’s acknowledgment of past deficiencies, we must address the broader implications of these deficiencies, particularly their effect on prior billings, CPA’s notice of non-renewal of STAR’s hangar lease due to alleged non-payment of fees, and CPA’s obligations under its own regulations.”
Christian said CPA’s notice of non-renewal of STAR’s hangar lease, citing non-payment of fees, “is directly undermined by CPA’s admission of fee-setting deficiencies” and its non-compliance with the following regulations:
–Invalid fees. SMA’s decision to withhold payment of disputed fees is justified as these fees were not established using compliant methodologies.
–No legal basis for eviction. CPA’s reliance on alleged non-payment of invalid fees to justify the non-renewal of SMA’s lease lacks legal standing.
–Retroactive corrective action prohibited. Any attempt by CPA to retroactively adjust fees to justify past claims or eviction actions would violate Federal Aviation Administration regulations and legal precedent.
Christian told Variety that throughout more than 15 years of operation in the CNMI, SMA has “consistently fulfilled its financial obligations to … CPA. This includes timely remittances for passenger facility charges, hangar leases, property leases for fuel storage, office rentals, security badges, and other agreements.”
Notably, he added, SMA also remitted disputed fees for airfield and terminal use for nearly a decade. However, he said SMA ceased payment of these disputed fees when CPA “refused to reconcile the payments with its actual costs, as required under the Airport Use Agreement ….”
No transparency, equity
Christian said CPA’s decision to deny the renewal of the hangar lease is based on disputed fees, which SMA has contested due to significant deficiencies in CPA’s fee-setting methodologies.
“These deficiencies, acknowledged by CPA itself and confirmed by a Superior Court ruling, highlight CPA’s failure to ensure that fees align with the standards mandated by regulatory authorities having jurisdiction over the airport,” Christian said.
Instead, CPA “has imposed fees based on its own initiatives, taken without the consent of the airlines or adherence to federally established requirements for transparency, proportionality, and equity,” Christian added.
Unjustified and unenforceable
He said despite SMA’s repeated requests for a detailed, transparent breakdown of fees to ensure compliance, CPA has provided no timeline or specifics about when this information will be made available.
He said until CPA corrects these deficiencies and adheres to the regulations required by federal authorities, the collection of disputed fees and actions based on those fees, including the eviction notice, are both unjustified and unenforceable.
According to Christian, “Fees must be compensatory, equitable, and directly tied to services required by any regulatory authority overseeing airport operations — not based on unilateral local initiatives that lack airline agreement.”
In defense of eviction notice
CPA board member Antonio Cabrera defended Pangelinan’s notice, saying under CPA policy, those leasing CPA facilities have to clear all outstanding debts before CPA can entertain a request to renew or extend the lease contract.
“So, SMA has to first clear its outstanding accounts,” Cabrera said adding that it has been the previous board leadership’s position that SMA must pay its outstanding debts in the amount of $1.2 million.
Pangelinan issued the eviction notice even though CPA board member Steve Mesngon urged SMA to continue its dialogue with CPA.
On July 24, 2024, SMA notified Gov. Arnold I. Palacios, Tinian Mayor Edwin P. Aldan and Rota Mayor Aubry Hocog that the airline would stop its inter-island flights effective Oct. 15, 2024, due to the “unsustainable airport fee structure imposed by the Commonwealth Ports Authority, which renders continued service economically unviable.”
On Aug. 27, 2024, SMA said it was rescinding its notice of intent to terminate air services to Tinian and Rota “after a constructive meeting” with the governor, Lt. Gov. David M. Apatang and their legal counsel.