Micronesian Air Connection Secures Tax Break for Expansion

The Commonwealth Economic Development Authority (CEDA) of the Northern Mariana Islands has awarded Micronesian Air Connection Services (MACS) a qualifying certificate, granting the start-up a 100% tax break on gross revenue, corporate income, and individual income taxes.

The tax waiver, unanimously approved by CEDA’s board on December 19, enables MACS to reinvest the funds into its operations. The application, filed by MACS’ parent company, J&P Holdings, emphasized the need for this tax break to support the airline’s viability and expansion plans.

According to a US Department of Transportation filing, another J&P Holdings subsidiary, Szabo Aerospace, plans to operate Cessna C208B Grand Caravans under the MACS brand. The airline will provide three daily flights, seven days a week, connecting Saipan with Rota International, Tinian, and Guam International. This will challenge Star Marianas Air’s monopoly on two of these routes, offering residents a new alternative.

J&P Holdings has pledged to invest $8.2 million in MACS during its first three years. The qualifying certificate is valid for 22 years, contingent upon MACS maintaining scheduled flights and providing financial and traffic data to CEDA.

John J. Stewart, co-owner of J&P Holdings, expressed satisfaction with the approval, stating that MACS will deploy a nine-seat C208B for Saipan-Rota and Rota-Guam routes, and an eight-seat version for Saipan-Tinian.

“This is a good public benefit,” said David Guerrero, CEDA’s economic development manager, highlighting MACS’ potential to enhance regional connectivity and competition.

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