Insurance firm reinstates Freedom Air’s coverage: Airline will be told to vacate airport facilities due to $1.2M debt

The insurance company that earlier cancelled the coverage of Freedom Air’s aircraft on Aug. 16 has reinstated its coverage of the local carrier after the company paid its unpaid liability insurance premiums.

Highly-placed sources told Saipan Tribune that Houston Casualty Company London Insurers (Marsh Aviation) formally notified concerned agencies about the reinstatement of Freedom Air’s coverage over the weekend.

The insurance firm earlier notified the U.S. Federal Aviation Administration, the Guam Ports Authority, and the Commonwealth Ports Authority about the insurance cancellation beginning Aug. 16 due to Freedom Air’s failure to pay the premium coverage for 10 of its aircraft.

Saipan Tribune learned that Freedom Air’s insurance certificate was issued on March 8, 2013, and is supposed to expire in March next year. Due to the nonpayment, it was cancelled last Friday, Aug. 16.

While Freedom Air has successfully rectified its insurance problem, another blow is coming its way after the CPA board adopted a decision on Friday to issue a “notice to vacate” to the company. The reason: some $1.2 million it owes CPA since 2011.

Freedom Air owner and president Joaquin Flores has yet to comment on the issue as of press time.

Saipan Tribune learned that Freedom Air has been delinquent since September last year in paying the aviation fee and this has ballooned to $533,594. The firm also owes $616,777 in passenger facility charges and $52,761 in other fees like badges, lease, utility usage, and promissory note account.

The CPA board’s decision to evict Freedom Air was reached after an hourlong executive session with its legal counsel, Robert Torres.

Freedom Air will be asked to vacate the premises of all CPA ports within 30 days after receiving the board’s letter.

During the board’s deliberation on Friday, it was learned that CPA first issued a “termination letter” to the company several months ago.

In an interview with acting CPA executive director MaryAnn Lizama, she disclosed to Saipan Tribune that since the board’s last meeting in June when Freedom Air executives appealed to the board for consideration, the company has yet to come up with a concrete plan to settle its aging accounts.

Lizama disclosed, however, that after the June meeting, Freedom Air has been paying the passenger facility charge on a daily basis, the amount of which depends on the number of passengers each day.

As a process, before a notice to vacate is issued by CPA, the company involved must be notified and issued a “termination notice” first and this was issued much earlier by the ports authority, according to CPA officials.

Freedom Air has been servicing the three islands and Guam for 39 years.

Source:   http://www.saipantribune.com