Cover Story
Clipping Saipan's Wings
Is it Lack of Seats or Absence of Visitors?
Air transportation and visitor arrivals remain a chicken-and-egg problem in the Northern Marianas. Tourism officials say fewer airline seats have caused declining arrival statistics, while the air carriers say lower market demand determines the number of flights deployed to Saipan. Before its resumption of the Nagoya-Saipan and Osaka-Saipan flights early this year, Continental Micronesia received much of the flak for the plunging number of visitors, especially Japanese.
Commonwealth government and tourism officials say Continental Micronesia’s decision to downsize its air transport services to the Northern Marianas by 572 flights in the first eight months of 2000 severely impacted the islands' travel industry. This number of flights translates into about a 19 percent drop in international traffic between Saipan and major cities in Asia.
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Between 1997 and 1999, Continental Micronesia reduced its services to Saipan by 64 percent, bringing only about 74,000 passengers into the Northern Marianas in 1999. In 1997, the carrier had more than 700 direct Japan-Saipan flights each year. It halted direct services to Saipan in 1999 and resumed two nonstop services to the island in February and April of this year.
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Walter Dias, Continental Micronesia’s Guam-based staff vice president of sales and promotions, says the carrier held off downsizing until 1999, even while the airline was flying half-filled flights from Asia to Saipan beginning in 1996.
The commonwealth’s tourism industry continues to suffer from hard economic times, with April's hotel occupancy rate showing a 7.5 percent decline, an 11-month low. The Hotel Association of the Northern Mariana Islands reported that the occupancy rate declined from 60.65 percent in March to under 56 percent in April — as visitor arrivals from Asia remained low.
While Continental Micronesia has only recently resumed Japan-Saipan flights, Japan Airlines, decision to continue serving the island has given it commanding control of the commonwealth’s air transport market, with 39 percent of all passengers traveling to the CNMI.
Although it has resumed nonstop services from Japan to Saipan, Continental Micronesia remains non-committal to requests for direct international services to the islands of Tinian and Rota, whose airport runways are currently undergoing major upgrading.
Continental Micronesia President Bill Meehan says the carrier will initially focus on improving air transport services in Guam and Saipan, as well as work at strengthening the promotion of the islands as a major destination.
Meanwhile, South Korea-based Asiana Airlines expects Saipan-bound travelers from Seoul to grow by 35 percent in the next two years, signaling the possibility of a strong comeback of the CNMI's second largest tourism market. Asiana’s Saipan Station Manager Hong Seong Min says the projected growth in CNMI-bound Korean travelers is the basis for the deployment of two additional flights between Seoul and Saipan.
But while Continental Micronesia’s resumption of non-stop Japan flights and Asiana’s focus on Seoul traffic have increased visitor industry optimism, it wasn't all good news for the CNMI. Saipan's aviation sector witnessed yet another blow in March with Mandarin Airlines' cancellation of nonstop flights between the island and Taipei.
Mandarin Air suspended its flights to the Northern Marianas due to severe revenue losses since November 2000, following the termination of a charter agreement it signed with the Tinian Dynasty Hotel and Casino. Since November last year, Mandarin Air says it incurred $12,000 in losses per roundtrip flight.
Meantime, the Northern Marianas is going to have to live with the reduced air service and hope that actions such as the Marianas Visitors Authority June hiring of Hawaii public relations firm Star Siegle to a 18-month, $2.6 million promotion contract — focused on Japan — will begin producing the numbers that the airlines say they need to increase flights to the Northern Marianas.
Photo: Floyd K. Takeuchi
