In the wake of Pacific Island Aviation’s cessation of scheduled service in the Mariana Islands the three Shorts Brothers SD 360-200s parked on the tarmac at Saipan International Airport most likely will be flying in the Southwest by the end of March.

For Northwest Airlines’ passengers PIA’s departure means some 600 Japanese vacationers transiting Saipan to Rota over the next few months will have to put up with bad connections and long airport waits in Saipan.

James W. Stowell vice president and director of safety for Pacific Island Aviation said “We are looking to place all of our aircraft in something economically profitable. They will probably be out of here by the end of March. We’re looking at places to put them to earn money. If opportunities crystallize we would operate under our certificate somewhere else in the U.S.”

Robert F. Christian PIA’s chief executive officer said in a Feb. 10 press release that the company is not declaring bankruptcy and will honor its commitments. “As a company it will continue on with interests in aviation though substantially reduced in this market.” Stowell said there are no plans to sell the aircraft.

PIA’s 30-seater Shorts Brothers planes are undergoing inspections and receiving engine upgrades. Stowell said there are good opportunities for the three aircraft in the U.S. mainland because about 400 communities in the United States lost air service in the aftermath of 9/11. “It’s tied to post-9/11 security needs and the new economics of running an airline.” He said some communities that lost service are offering subsidies to entice airline companies.

Pacific Island Aviation ceased its commuter operation in the Mariana Islands on Feb. 9 after 17 years. In doing so it let go 38 staff and closed airport facilities and offices on Saipan Guam and Rota. PIA provided scheduled and charter service between the Northern Mariana Islands and Guam and was named the essential air service carrier to Rota shortly after starting service in 1988. PIA cited strong competition with Cape Air rising fuel insurance and regulatory costs and loss of the U.S. Postal Service contract as reasons for ending its service in the Marianas.

It was also the Northwest Airlink partner in the Marianas with connections to Northwest Airlines flights in Guam and Saipan and delivered an average of 24 vacationers a day to Rota Resort & Country Club. The 600 code-share reservations for Northwest passengers that plan vacations in Rota over the next few months will have to wait in Saipan for connections at least one hour and 30 minutes longer and as much as four hours longer each way to catch other commuter flights. A visitor industry official surmised that many of them would cancel trips rather than spend up to eight hours in airports of their short vacations which average four days.

Mary Stanik manager of corporate communications for Northwest Airlines said “Northwest has no plans to replace PIA but we will seek to work with existing carriers in this market with regard to our presence in the region.” Northwest has daily flights to Guam from Narita Japan and twice daily flights to Saipan from Japan — from Narita and Nagoya. PIA’s code-share agreement with Northwest began in 1995.

Cape Air is telling visitor industry customers it plans to pick up the slack April 1 when a reconfigured schedule to Rota will match up better with flights in Guam and Saipan. Cape Air is also considering putting at 42-seat ATR aircraft on the route in addition to its nine-seat Cessna 402s.

PIA maintained its corporate office in the Cabrera Center in Saipan and Stowell said it retained 12 employees to be able to run charters primarily for the Tinian Dynasty Hotel & Casino. PIA which has been running five to six night charters a month between Saipan and Tinian has several charters lined up in March for a famous baccarat tournament that is expected to draw hundreds of high rollers from Asia. Tinian which is a mile away from Saipan does not have scheduled flights with large aircraft and is otherwise connected through a ferry and light aircraft.

PIA lost the federal mail contract in the Marianas in late 2003 when Continental Airlines was awarded a regionwide contract to deliver all of Micronesia’s mail to Honolulu.

“We saw a death spiral ” Stowell said. “We couldn’t lower our prices because everybody else would lower theirs. We couldn’t raise our prices because no one would fly us at all. As an aftermath rates have risen. Already Cape Air has raised rates and fares are going up. It’s what needed to happen. Now they may be able to get up to where they are profitable.”

Stowell said Northwest was willing to raise PIA’s share of the portion of a ticket that a person in Japan buys but new passenger facility charges of about $8 per passenger in the Northern Marianas that the Commonwealth Ports Authority began charging airlines in January to pay for capital improvements were more than the offered share.

“The charges keep on rolling and rolling up ” Stowell said explaining an airline operator’s axiom: “When there’s not enough capacity the passenger pays for airport charges because airlines can raise rates; when there’s a lot of capacity the airline has to keep rates below its cost of operation and the owners of the airline pay for airport charges.”

“Everyone wants to know when we’re coming back which is real nice.” Stowell said. “We raised the bar little bit in terms of service level — computerized reservations connectivity large-carrier connections. At the same time when flying between Saipan and Guam we kept fares down. They came down to our level. PIA did a number of things for which it was silently appreciated.” MBJ