Star Marianas Air has filed a lawsuit in U.S. District Court against the now-defunct Marianas Southern Airways and its president Keith Stewart for violations of the Sherman Act, which outlaws monopolistic business practices.

In 2023, Marianas Southern Airways ended its operations after the NMI government, under Gov. Arnold Palacios, terminated its $8-million American Rescue Plan-funded contract, which was signed during former Gov. Ralph Torres’ administration, due to its deficit. Star Marianas returned to being the only inter-island airliner for residents to rely on for critical services.

Attorneys for Star Marianas wrote in their filing, “Marianas Southern Airways, by executing said Contract, entered into a predatory pricing scheme with the other Defendants, to use ARPA funding to fix prices below costs in the markets served by Star Marianas with the intent of causing injury to Star Marianas's business, and with the goal of running Star Marianas out of its free market business.”

Star Marianas says the actions created unfair competition.

In a February 2023 interview before this lawsuit, MSA president Stewart told KUAM News, "There is no odd deals here…The situation was there was an emergency issue and what the administration at that time was doing was going and solving the issue to ensure that there would be another airline here that could go and provide services if something ever happened." He added in the February 2023 interview, “There's no other airline in the entire world that would have come and done what Southern and us have done."

KUAM News has reached out to both parties for comment. Stewart declined to comment on Tuesday.