Note: Lifted from the author’s book “Fighting for a Cause …and More”
Six hundred dollars ($600) round-trip airfare from Guam to the U.S. Wow! Yes, most of us will go. I foresee everyone in Guam rejoicing.
This could have been real if not for an unwelcome culprit—Mr. Cabotage Law. It’s a “sabotage” law that works against the welfare and interest of the people of Guam. It contributes to the high cost of living and has adverse ripple effects on the island’s economy.
Philippine Airlines (PAL) has returned to Guam this year. Presently, it offers an average $800 round-trip from the Philippines to US mainland via Honolulu. If Guam has airline competition, PAL could pass by, pick-up passengers on Guam, and proceed to the West coast. Pro-rating, passengers from Guam would then cost around $600. Continental Micronesia and Northwest, which are virtually merged, charge an average of $1,400 per passengers. As shown above, this could be reduced by $800. With around 200 passengers flying daily to the US on Continental and Northwest aircraft, there are around 73,000 passengers going annually to the US. Guam passengers perhaps, are overpaying a whopping $59 million (73,000 x $800) per year to these two airline companies.
Now, PAL, to stay competitive, offers $305 round-trip to Manila. Later, Continental counters with $295. As it is, Continental plans to “put down” its lone competitor so that once again it becomes a monopoly. Continental and Northwest have already the undue advantage, courtesy of the Cabotage Law, Guam’s population of 150,000 is only 0.05% of the 288 million US population that they both service. The people of Guam is just a drop in their buckets.
These two airlines claim that the low volume of passengers from Guam drives up the price. Yes, indeed, because with their exorbitant price of $1,400 many could hardly afford it. Our Asian neighbors are luckier because their airlines charge them $750 to $800 only.
It is paradoxical that our own fellow American businessmen in the airline companies offer us travel to our nation at a higher price despite the fact that Guam is nearer to the US than other Asian countries.
If cost is at “globalized” pricing and with competition from other airlines, travelers’ volume will surely increase. The return flights of PAL will bring in more US mainlanders and Canadians to Guam because fare will be very much cheaper.
Then Guam Visitors Bureau could target our 288 million fellow Americans and 30 million Canadians as tourism markets. It will be a win-win situation for the airline industry, the people of Guam, and fellow Americans in the mainland. The problematic tourism equation for Guam will change for the best.
It is surprising that other insular areas such as the Virgin Islands, American Samoa, and the Northern Marianas are exempted from this law, but Guam and Puerto Rico are not. What did our political leaders do all these decades? Didn’t they fight hard enough for Guam or did they succumb to strong and generous lobbies of the airlines (including shipping companies that lobby for the Jones Act)?
But will it be too much for American airlines to share their social and moral responsibilities to their fellow Americans on Guam? Thanks for employing some of our local people here but we deserve our fair airfare in this part of the world where globalization, fair competition, and free enterprises must prevail. Guam does not need to beg for increased federal money. We just ask simply: Free us from federal restrictions that limit our economic growth!
This has been going on for a long time. Must we allow it to continue any longer?
In conclusion, I suggest that the Guam Legislature does the following:
*Create a local agency that will study and control unfair pricing not only airline companies but also of shipping lines (a victim of Jones Act), cables, telephones, power, petroleum prices, etc.
*Prohibit government officials to get involved directly and indirectly with businesses that could be in conflict with the people’s interest.
*Further, the people of the Pacific should all push for and support airline competition in our region.
It is high time that our people, led by our political and business leaders, ask exemption from these oppressive and overstaying twin towers—Mr. Cabotage Law and his brother, Mr. Jones Act.
If we will not fight now for our rights, who else will?
Since year 2002 when this article was written, nothing has changed much except Northwest is now merged with Delta, Continental is merged with United. The airfare is still pretty much the same; and ouch, Pat’s suggestions for the Guam Legislature is, to this date, still a suggestion.-Ed