CPA chief: Freedom Air has to stay current with all its debts

Tuesday, November 12, 2013

More than a month after Freedom Air filed for bankruptcy, the Commonwealth Ports Authority is still waiting for any development on the matter, which is now under the guidance of the bankruptcy court.

CPA executive director MaryAnn Lizama disclosed to Saipan Tribune yesterday that the agencys legal counsel, Robert Torres, is on top of the situation.

The Commonwealth Ports Authority legal counselhas been assigned to keep in communications with regards to the bankruptcy process and progress, she said.

Due to the bankruptcy filing, there is currently an automatic stay on all creditors of Freedom Air while they reorganize.

Freedom Air, which owes the ports authority some $1.23 million in passenger facility charges and facility use, filed for Chapter 11 bankruptcy in Guam in late September, to allows the carrier to reorganize while it continues operation.

Lizama said yesterday that CPA, like all other creditors of the airline, will respect the process. She admitted that all amounts owed CPA is not being addressed to date.

However, Freedom Air has to stay current with all its current debts, i.e., PFCs [passenger facility charges], land leases, etc. Until we hear from the courts or the assigned trustee, Freedom Air continues its operations, according to Lizama.

Airports in the U.S. may impose PFC on enplaning passengers, to be used to fund Federal Aviation Administration-approved airport improvement projects. Once the FAA has approved a PFC, it requires airlines and travel agents to collect PFCs from their passengers. Air carriers may be subject to financial penalties for non-compliance.

Saipan Tribune learned that of the $1.2 million total debt to CPA, Freedom Air is behind in PFC payment for Saipan amounting to $273,500; Rota with $148,392; and for Tinian $202,275.

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CPA chief: Freedom Air has to stay current with all its debts