MACS Aims to Break CNMI Flight Monopoly

Micronesian Air Connection Services (MACS) is set to shake up the CNMI inter-island travel market by launching scheduled passenger services within the next 30 to 60 days, according to owner John Stewart, as reported by Marianas Variety. This bold move could end Star Marianas Air’s long-held monopoly over inter-island flights in the Commonwealth of the Northern Mariana Islands (CNMI), igniting concerns and debate among industry players.

MACS’s planned service expansion comes on the heels of a significant incentive from local authorities. The airline recently secured a 100% tax break for 22 years from the Northern Marianas government, a subsidy intended to boost new market entrants and enhance connectivity in the islands. In Stewart’s view, these additional flight options will be pivotal in revitalizing the CNMI tourism market, which had been adversely impacted by the Covid-19 pandemic. “Additional flight options will support our hotels, restaurants, tour operators, and local businesses as we work to re-establish our islands’ pre-Covid position in the Pacific tourism market,” Stewart said.

In an effort to build a competitive edge, MACS has partnered with Guam-based Szabo Aerospace to operate its flights. Szabo Aerospace is a wholly-owned subsidiary of Micronesian Air Cargo Services LLC, a company controlled by Stewart and his wife, Paula Stewart. Micronesian Air Cargo Services currently offers regular on-demand air freight services around Guam and the CNMI using a fleet of Cessna 208Bs, a model renowned for its reliability in island operations. Ch-aviation research indicates that MACS’s current fleet includes four Cessna 208Bs, with one aircraft, registered N829JP (msn 208B2429), owned directly by Micronesian Air Cargo Services.

The renewed focus on scheduled passenger services signals a clear intent by MACS to capture market share and bring fresh competition to the CNMI air travel landscape. Stewart also revealed plans to secure a lease for essential hangar space at Guam International Airport, a critical step in ensuring smooth operational logistics as the new services launch.

However, the proposal has not been without its detractors. Star Marianas Air, which has enjoyed a dominant presence in the CNMI aviation market for over 15 years, has openly criticized the tax breaks and subsidies granted to new entrants like MACS. Star Marianas President Shaun Christian raised concerns with the Marianas Business Journal, noting that such government-sponsored incentives could disturb market stability and impact public interest. “It raises the question – if Star Marianas has provided sufficient, reliable, and unsubsidised air service to the CNMI for over 15 years, why must new entrants rely on local government-sponsored economic advantages to compete with Star Marianas?” Christian argued.

Furthermore, CNMI Governor Arnold I. Palacios is yet to sign off on the qualifying certificate for the tax breaks. Palacios stated that he is waiting on further details from the Attorney General’s Office, emphasizing a cautious approach. “I believe we should incentivise businesses where we can, especially businesses that will provide invaluable service for the CNMI. I’m supportive of the qualifying certificate, but I have not seen details of it yet so I will hold off on giving my position on the matter,” he commented.

As MACS prepares for its service launch, the aviation market in the CNMI faces the possibility of significant change. With increased competition, improved connectivity, and a boost to the local tourism sector, the stage is set for MACS to play a major role in re-defining inter-island air travel in the Northern Mariana Islands. The unfolding story continues to garner attention, as all eyes remain on how these developments will reshape the CNMI aviation landscape.

Related News: https://airguide.info/category/air-travel-business/airline-finance/

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com