Monday, July 30, 2012

Freedom Air needs an additional $600,000 loan from the Commonwealth Development Authority to allow the inter-island carrier to continue its operations for the next six months, according to spokesperson Amjad Farhoud.

Farhoud told members of CDA's Development Corporation Division board Friday that Freedom Air will use the money to procure airplane engine spare parts to avert the shutdown of its service in the CNMI.

Along with airline station manager Dennis Cruz, Farhoud said from the original loan proposal of $2.9 million, the CDA division only approved $900,000 in March this year.

He said the amount is not enough to cover the priority expenditures of the carrier including obligations to vendors.

Freedom Air's attempts to seek loan assistance from private banks, according to Farhoud, were also unsuccessful due to lack of asset/collateral that would backup the loan proposal.

The carrier is said to have placed $6 million worth of collaterals for the $900,000 loan extended by CDA to the company which it utilized in immediate repairs of aircraft that resulted in the restoration of flights in Rota.

It was late last year when Freedom Air suspended and reduced its flights to Rota to give way for regular maintenance of its aircraft.

It was also forced to use seven-seater aircraft in lieu of 30-seater planes it formerly used and the switch negatively impacted the tourism industry on island. It also affected local travelers and medical referrals.

Because of the $900,000 loan from CDA, the carrier was able to bring back to normal Rota flights in March this year.

Read more here:

Freedom Air needs $600K loan to stay afloat