Cape Air is soaring - Brockton, MA - The Enterprise
It’s an interesting time to be Dan Wolf. As president of Cape Air, the independent regional airline that got its start in 1990 flying just one route from Boston to Provincetown, he is facing a potentially dicey summer vacation season.
But he is also overseeing the largest route expansion in the company’s history, moving into 14 new cities in the past year alone. And he is trying to figure out how the company will replace its signature nine-passenger plane that Cessna has stopped manufacturing.
All in a day’s work, he says, projecting infectious optimism about Cape Air’s future. He is performing a balancing act to determine what level of service reductions should be implemented in the Provincetown market, which has seen a 30 percent drop in advance bookings for June, July and August.
Part of that decline has been caused by the drop in European vacationers expected this summer, scared off by the global recession and the increase in the value of the dollar against the Euro.
“(The European market) was huge last year for Cape Air because they all flew into Boston. Even if Provincetown does well this year, if it’s a drive market, that won’t help us,” Wolf said, referring to projections that Cape Cod may actually fare well this summer as people decide to take their vacations closer to home, driving instead of flying.
Still, he is optimistic that the fall in advance bookings for travel to Provincetown may not come to pass.
More travelers appear to be waiting until the last minute to book their vacations. Tourists who normally make reservations three months in advance are now booking three weeks ahead, Wolf said. While Provincetown passengers in May dropped 10 percent compared with last year, the number of Memorial Day weekend passengers was even with 2008.
Wolf is moving airplanes into busier routes from the Provincetown routes; the small size of the airline gives it the flexibility to implement nimble changes. Provincetown’s loss is New Hampshire’s or Baltimore’s or White Plains’ gain because the planes can be moved to match the demand.
As a result, there have been no layoffs at Cape Air and the airline is coming off one of its best years ever in 2008. The falling price of fuel has helped, but the company’s second highest cost is personnel. It maintains a staff of about 700 people, including 250 on Cape Cod, where Cape Air operates its headquarters, reservations system and airplane maintenance services.
It’s the maintenance operation that has become an even more critical element in the airline’s success, Wolf said. Cessna has stopped making the 402, which is the only airplane Cape Air uses. As a result, the company is spending millions buying used 402s to use for parts to maintain its fleet of 58 planes. Wolf said he expects Cape Air has 10 to 15 years left in the 402 fleet.
He has been talking to manufacturers about developing an airplane to replace the 402. Wolf has decided that a nine-passenger aircraft is the right fit for Cape Air. Wolf and his staff are on the lookout for new routes that will help the airline grow, perhaps a route to Cuba if U.S. travel restrictions are eased, using Cape Air’s Key West facility. Expansion into the Dominican Republic and more mid-Atlantic routes using the company’s new hub in Baltimore are also on the table.