MACS - Micronesian Air Connection Services intends to begin scheduled passenger services in 30 to 60 days, owner John Stewart told the newspaper Marianas Variety this week. The airline recently received a 100% tax break for 22 years from Northern Marianas (CNMI) authorities. Once operating, it will break the monopoly in CNMI inter-island flights currently enjoyed by Star Marianas Air (S2, Tinian), raising the ire of that carrier.
"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,” said Stewart. He also hopes to secure a lease for the necessary hangar space at Guam International, according to a report in the Marianas Business Journal.
Guam-based Szabo Aerospace will operate the MACS flights. As previously reported in ch-aviation, Szabo is a wholly-owned subsidiary of Micronesian Air Cargo Services LLC, a Guam entity controlled by Stewart and his wife Paula Stewart. Micronesian Air Cargo Services provides regular on-demand air freight services around Guam and the CNMI using a fleet of Cessna (single piston) 208Bs.
ch-aviation research shows the airline operates four C208s, of which one, N829JP (msn 208B2429) is owned by Micronesian Air Cargo Services directly.
CNMI Governor Arnold I. Palacios still needs to sign off on the qualifying certificate awarding the tax breaks. He told Marianas Variety that the Attorney General's Office was reviewing it.
"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 said.
Meanwhile, the CNMI's Commonwealth Economic Development Authority's decision to award the tax breaks has drawn heavy criticism from Star Marianas President Shaun Christian.
“This follows a troubling pattern where new entrants into the CNMI aviation market, including both MACS and the now-defunct Marianas Southern Airways, have sought substantial government subsidies as a precondition to entering the market," he told the Marianas Business Journal. "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?"
He added: "It is concerning that, instead of improving market conditions or addressing regulatory issues, the CNMI government appears focused on replacing Star Marianas with subsidised alternatives, despite the evident risks to market stability and public interest."
