Airport revenue takes a hit from North Korea threat in 2017

Guam airport

The Guam International Airport Authority’s revenue dipped 1.6 percent in 2018 as a result of heightened North Korean missile threat in August 2017 that took its toll on Guam’s brand as a safe destination.

The regional anxiety had caused air traffic to shrink as several airlines pulled out of Guam, the airport authority said Friday.

“As a result, the number of enplaned passenger arrivals decreased from 1.86 million to 1.76 million in FY 2018, a 4.2 percent decrease from the previous year,” the airport authority said, citing Ernst & Young’s audit report.

Arrival numbers quashed President Donald Trump’s prediction that global attention on Guam at the height of tension would boost the island’s tourism “tenfold.”

On the contrary, the Guam Visitors Bureau later reported mass cancellations of bookings. “The island has had a 3.1 percent decline in total visitor arrivals in FY18, primarily due to the negative effects of the North Korea news and a loss of air seats from Japan include the exiting of Delta from Guam, Saipan and Palau,” GVB said in a September 2018 report. “The Japan market was the most negatively impacted with a 30 percent loss of seat capacity in June, resulting in a 23.9 percent decrease in arrivals.”

Delta Air Lines announced its corporate decision to cancel Guam service route. Low cost carrier HK Express followed with its suspension of direct services to Hong Kong. Cape Air’s code share operations with United Airlines was terminated for service to Saipan.

“Less passenger traffic and fewer flights negatively affected operational revenue derived from facilities and system use charges assessed per passenger and concession fees that include retail, ground transportation, food and beverage and in-flight catering,” the airport authority said.