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New $5 airport fee takes effect July 1
by The Daily Herald
Posted: May 31, 2007 15:18 UTC
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AIRPORT - The Princess Juliana International Airport operating company N.V. PJIAE will introduce an Airport Improvement Fee (AIF) effective July 1.
The AIF, a temporary charge of US $5 per passenger, is meant to help offset the cost of the improvement of the infrastructure and services at Princess Juliana International Airport and is expected to remain in place until December 31, 2011, “subject to the development in passenger traffic,” PJIAE President Eugene Holiday announced in a press release Tuesday.
The fee applies to departing domestic and international passengers. To facilitate a smooth passenger flow, it will be collected via the airline tickets. It will be withdrawn when passenger levels increase to sustain the investment.
Holiday told The Daily Herald the projected increase in passenger levels had been set at three per cent per year and that in case of a substantially bigger increase per year, the AIF would be withdrawn. The airport received just under1.7 million customers in 2006.
The introduction of the AIF will increase the total amount in fees a passenger has to pay before boarding international flights to $44.35.
The St. Maarten Airlines and Handlers Association (SAHA) had protested against the collecting of the $5 AIF, which originally had been scheduled to go into effect on April 1. SAHA was concerned that PJIAE had not involved SAHA members – its partners and stakeholders - in the decision-making process.
In a brief comment Wednesday, SAHA president Michael Cleaver noted that while the introduction of the fee had been delayed, the airport management had now followed the legal path and therefore had every right to impose the additional fee.
“We are disappointed, but we won’t go crying over sour grapes,” Cleaver said.
However, he once again expressed his concern that the airport was becoming too expensive and he pleaded for lower fees, and measures to attract more tourists to the island.
“The real engine of the economy is when tourists rent hotel rooms, cars, buy food and gifts,” he said.
While passengers with the introduction of the AIF will have to pay some $44.35 in fees before boarding international flights, Holiday said that amount included a security fee that was not passed on by all airlines to the passenger. “So you can say that the passenger has to pay $35 for sure. On domestic flights the amount is $15,” Holiday said.
Cleaver was also sceptical about the possible withdrawing of the AIF. “Seeing is believing,” he said, pointing out that airport fees could be compared to taxes and that once a revenue stream had been established by introducing either a fee or a tax, it hardly ever was withdrawn.
In his press release Wednesday, Holiday explained that the new terminal building and related works of the Phase II Capital Investment Project that were put into operation in October 2006 represented an investment of some $92 million. The project was financed on the international capital market via a commercial loan.
He said that, as was customary, airports usually introduced a special charge in addition to regular rates and charges to cover new capital investment. In the case of PJIAE, the AIF will go towards helping the company meet its financial obligations, including the payment of interest and the principal on the loan.
He said PJIAE maintained a rates and charges policy that reflected the cost of the airport infrastructure and the services rendered and was competitive with other regional airports in terms of value for money.
And, contending that while preparing its business plan PJIAE had made extensive studies to ensure that the improvements would be executed considering its competitive position, Holiday also noted that the company had “received endorsement from government with its approval of the Phase II Capital Investment Project.”
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