Aviation
Opportunities Ahead
Continental Micronesia’s New CEO Is Ready To Act
It’s a safe bet that some changes are in store for Continental Micronesia. On September 10th, Mark A. Erwin became president and chief executive officer of the Guam-based, wholly-owned subsidiary of Continental Airlines. Since 1995 Erwin has been Continental’s senior vice president of Airport Services based at the Houston headquarters of the fifth largest U.S. airline.
Erwin is not a stranger to the region. From 1987 to 1990 he was general manager and regional director for Hawaii. He was a management board member for Air Micronesia Inc., the owner of Continental Micronesia until 1990, a joint venture with United Micronesia Development Association. (Continental purchased 91 percent of UMDA shares in 1990 and the rest of the shares in 1997.) Erwin will report to Continental Airlines President Larry Kellner.
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Significantly, while Erwin succeeds William Meehan as the Continental Micronesia president, the previous CEO of Continental Micronesia was Continental Chairman Gordon Bethune. “He had never given that (CEO title) up,” said Erwin. “So it’s quite an honor for him to offer that to me.”
One of Erwin’s tasks is to consolidate all aspects of Continental Micronesia’s business as well as Continental’s Pacific/Asia division, trans-Pacific services. The two entities represent a $650 million business, he says. Previous presidents were responsible for operations, while passenger revenue generation was overseen elsewhere and cargo somewhere else. “My responsibility with my team will be to set up an organizational structure that looks truly like a stand-alone airline,” he says.
As for talk of new regional carriers, specifically in Palau and in the FSM, Erwin says he isn’t too worried. “We will always compete vigorously and fairly with anyone who’s in the marketplace,” he says. “That’s who we are.” He also pointed out the risks in the airline business. “In the best times, this is a low margin business,” he notes. Continental’s ability to bring passengers and revenue, from Japan, North America and elsewhere in Asia facilitates its continued service in the region.
In addition, Continental spends more than $100 million in the local regional economy, including employment of more than 1,450 people at its Guam hub alone. “There may be some concerns with regard to the fares but on a relative basis, I think they’re fair,” he says. “I don’t think the politicians understand the commitment that myself and all the persons here at Continental Micronesia have and the money we provide this economy. If it got to the point that we had to make different decisions, I would make those difficult decisions.”
Another of Erwin’s goals is to explore opportunities for additional revenue generation, specifically, maximizing business in Japan — “Continental’s largest customer base in the region” — as well as upcoming routes from Hong Kong and China. In Micronesia, Erwin says he is satisfied with the response to the seventh weekly flight, added in December, between Guam and Palau. The airline is assessing the traffic between Guam and Chuuk, and elsewhere, to see if additional flights are warranted. “I’ve got people working on more opportunities than you can imagine,” he says.
Other tasks on Erwin’s agenda include meeting the heightened federal security mandates, working with local entities to market regional destinations and developing a three to five year vision for Continental Micronesia. “We think the framework of the airline industry is going to change substantially,” he says. “We’re going to be poised to make any changes with that.”
Another issue, particularly for Guam and the Northern Marianas, is cabotage, the restriction of non-U.S. carriers from carrying passenger or cargo between U.S. destinations. Many argue the regulations limit competition and inflate fares. The larger issue is reciprocity, Erwin says. “We would love to fly Tokyo to Sapporo, one of the most lucrative markets in the world. But I don’t think the Japanese government would allow that."
