Airline to drop Manila-Saipan direct flights due to fuel hike, low demand

SAIPAN – Thousands of Filipinos living and working in the US territory of the Commonwealth of the Northern Mariana Islands (CNMI) would lose the only direct air service between Saipan and Manila following Continental Micronesia Inc.’s announcement Friday that it would discontinue its Saipan-Manila direct service. Effective on July 16, 2008, the Continental Micronesia would no longer provide direct flights from the Manila to Saipan, blaming skyrocketing prices of oil and the low demand for the flights. Continental Micronesia’s business decision will force thousands of Filipinos relying on the airline to take connecting flights in Guam, Japan and South Korea. At present, travel time between the CNMI’s capital of Saipan and Manila through Continental Micronesia’s direct flight takes only about three hours. Without a direct flight, visitors to the islands would have to endure an eight hour travel time with stop-overs to Japan or Guam. But for passengers with US visas, they can have a shorter layover time of two hours if they take Continental Micronesia flights via Guam, and then to Manila. But most of the estimated 10,000 Filipinos and their families living and working in the CNMI do not have US visas. The CNMI is the only US territory that does not require foreigners to secure US visa for entry into the islands. “It’s a hassle, especially when you have a child traveling with you. You have to wait for many hours in Japan or Korea due to the layover. It’s a big inconvenience," Ruby Gozom, a 37-year-old collection agent on Saipan, told GMANews.TV. Gozom, of Caloocan, is also worried that her mother who is on tourist permit to Saipan will have difficulty coming home to Manila in July. Continental Micronesia will also suspend its flights from its Guam hub to Hong Kong and to Denpasar, Bali effective on July 28, 2008 and Oct. 2, 2008, respectively. Fuel hike, low demand Since January 2007, jest fuel costs have spiked dramatically, increasing almost $100 per barrel or more than 140 percent. Each dollar of oil increase has an annual impact to Continental Airlines of $45 million, the airline said. Continental also said it was “severely impacted" by the loss of Manila customers traveling to Saipan to take the National Council Licensure Examination (NCLEX) required for registered nurse licenses by US states and territories. Effective August 2007, nurses and nursing graduates in the Philippines could take the NCLEX in Manila instead of traveling to Saipan or Hong Kong to take the test. This caused Saipan to lose hundreds of visitors from Manila every month. “Despite our best efforts working with the Marianas Visitors Authority and the government of the CNMI, we were unable to generate sufficient customer demand from the Philippines to replace the loss of our customers traveling to Saipan to take the NCLEX," said David Kendell, Continental Micronesia Inc. Asia and Micronesia director of sales and marketing. Longer travel time, higher fare Irene Tantiado, president of the Coalition of United Workers (CNMI), told GMANews.TV that Continental’s business decision will result in inconvenience not only to Filipinos but to local residents who go to Manila for medical or other purposes. “The remaining airlines, Northwest and Asiana, take a longer travel time because of the number of hours of layover. Besides, with one player out, air fare might go high because of lesser competition," Tantiado, of Cebu, said. “We don't have choice here but to accept it." Others hope that Continental will rescind its decision to discontinue its Saipan-Manila flights. Mayette Delos Reyes, a 49-year-old computer technician, said she and her husband will go on vacation in the Philippines in October to attend the college graduation of their son. “We will have no choice but to travel for longer hours. I’ve always taken direct flights to Manila," said Delos Reyes. “Sayang ang apat hanggang walong oras na paghihintay sa loob ng airport sa Japan o Korea. Wala naman kaming US visa para sa Guam na lang ang connecting flight (It’s a waste of time to wait for four to eight hours at the airport in Japan or Korea. But we don’t have a US visa either to take the connecting flight in Guam)," she said. Difficult decision Mark Erwin, Continental Micronesia chief executive officer and president, said the suspension of these services due to record fuel costs combined with low customer demand is a “very difficult decision" to make." “These schedule changes in Asia Pacific will result in a 4 percent year-over-year decline in CMI mainline capacity and combined with the April 2008 suspension of Nagoya – Honolulu service will result in 21 percent year-over-year decline in a CMI mainline capacity (available seat miles, or ASMs) in the fourth quarter," he said in a statement. These changes, he added, are part of the worldwide mainline system capacity reduction announced by Continental Airlines last week. Passengers who are currently booked on flights affected by the capacity reductions will be contacted by Continental Micronesia to arrange alternate flights or, at the election of the customer, a ticket refund. Continental Micronesia is headquartered in Guam where thousands of Filipinos also live and work. - GMANews.TV