By Bryan Manabat
Saipan--CNMI Gov. Arnold I. Palacios is seeking to resolve the long-standing fee dispute between the Commonwealth Ports Authority and Star Marianas Air Inc., which has threatened to end its air service by Oct. 15.
Robert Christian, board chair of the Star Marianas, notified CNMI officials of its intention to shut down after receiving a letter from CPA demanding the payment of $1.2 million in arrears for the use of the airport facilities on Saipan, Tinian and Rota.
Star Marianas is a commuter airline that provides interisland service in the CNMI and Guam.
In a statement on Sunday, Palacios said the fee dispute has been a longstanding issue inherited from the previous CPA board, and, unfortunately, has remained unresolved.
"The letter from Star Marianas stating its intent to cease operations is deeply troubling, as air service plays an essential role in our community. The airline’s services are not merely a convenience for our people, but a necessity that impacts the Commonwealth’s economic growth and development, residents’ access to healthcare, education, and overall quality of life," Palacios said.
According to the governor, he had initiated discussions with the CPA board of directors seeking a comprehensive briefing and to see how a mutually beneficial agreement can be reached with Star Marianas so the Commonwealth, especially residents of Rota and Tinian, are not deprived of essential air connectivity.
"I am also reaching out to Star Marianas and plan to meet with the company soon," he added.
Palacios said, "Maintaining and improving air service, along with improving and enhancing port infrastructure, remain a key priority for this administration. Lt. Governor Apatang and I will continue to keep the community informed of developments on this matter."
Tinian Mayor Edwin Aldan has asked the Star Marianas board chair to reconsider his decision to terminate interisland transportation services.
"This announcement has raised significant alarm within our community, and I urge you to reconsider this decision, as it will have a profund impact on the Tinian economy and the livelihoods of our residents," Aldan said in a letter dated July 24.
Tinian is home to over 2,000 residents who rely on Star Marianas Air for their daily commute, including accessing essential services such as hospitals, businesses, and government and judicial institutions in Saipan, the Tinian mayor said.
"The termination of your services would not only disrupt these vital connections but also jeopardize the well-being and economic stability of Tinian families," Aldan added.
In response, Christian said: "The primary challenge we face is not a lack of willingness on Star's part to continue providing vital air services but rather the unsustainable fee structure imposed by the CPA.
"These fees make it economically unviable for us to operate under the current conditions. Our decision to suspend services stems directly from the CPA's actions and fee assessments, which are not aligned with the principles of compensatory fees," Christian said.
He said the current fee methodology lacks transparency, detailed cost allocation, and fair treatment of common-use areas.
All these factors combined have resulted in charges that "do not accurately reflect our actual usage of airport facilities and services," Christian said. "These practices impose a disproportionate financial burden on STAR, jeopardizing our ability to sustain operations."
Rota Mayor Aubry Hoco in a letter to both CPA and SMA urged resolution of the issue. "This dispute directly impacts the lives of every resident, business owner, and visitor to our island," she said.
Hocog noted that Rota is a small community that relies on air travel for economic survival, healthcare and essential supplies.
"Our residents, especially those needing critical medical care through the inter-island medical referral program, depend on reliable air transportation to access vital services on Saipan," Hocog said.
"The disruptions caused by this dispute are placing an immense strain on our community and hindering our progress toward economic recovery," she added.
In its response, Christian said, "The lack of movement toward resolution is beyond the control of Star Marianas.:
He said CPA has refused to provide Star Marianas with the details of its billings.
"The ratebooks presented to Start Marianas and all other airlines for fiscal years 2022, 2023 and 2024 state that the content of those documents, in its introduction section, is not binding on the airlines or the CPA and yet go on to detail how they might move forward with billing the airlines once certain amendments to CNMI Regulation 40-10.1 are approved by the CPA’s board," the Star Marianas executive said.
He said the amounts that the CPA sought to collect from Star Marianas were "unsupported by any detail, and seemed to be similar to the amounts that were very generally presented in the ratebook which merely lumped total CPA expenses into terminal and airfield categories."
"The CPA, for whatever reasons it has, is either unwilling or unable, or perhaps both, to provide a detailed financial document that justifies its fees, and until such time as the CPA finds a solution to their responsibility to do so, Rota and all of the communities that require air services will be faced with uncertain consequences," Christian added.
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