Cape Air Update Saipan Chamber of Commerce Andrew Bonney Senior Vice President of Planning 0
In 1989 Cape Air began airline service with a single route between Provincetown and Boston Original Cape Air route map Boston Provincetown November 1989 schedule 1
Havre Glasgow Wolf Point Sidney Glendive Billings Massena Ogdensburg Saranac Lake Augusta Bar Harbor Rutland Lebanon Rockland Now serving 44 cities! Kirksville Quincy Albany Boston Providence Provincetown Hyannis White Plains Nantucket Manhattan Block Island Martha s Vineyard New Bedford St. Louis Ft. Leonard Wood Marion Cape Girardeau Owensboro Cape Air Routes September 2014 Denotes seasonal service Micronesia Saipan Guam Rota San Juan St. Thomas Culebra Tortola Virgin Gorda Mayaguez Anguilla Vieques St. Croix Nevis Map inset not to scale
Cape Air has grown from a single aircraft and route in 1989 into America s largest commuter airline Key facts Cape Air: Leading the pack nine at a time First route was Boston Provincetown, begun in October 1989 with one aircraft Today s fleet 76 Cessna 402s in four regions Four Britten-Norman Islanders Two ATR-42s in Micronesia Operating up to 550 flights daily In 2013 flew 728,000 passengers Stable, mature and growing company Photo courtesy Mark Garfinkel (August 7, 2000, Boston) 3
Cape Air 2014 Annual revenue of $120M Financially stable 44 airports served, 20 in EAS 83 aircraft Captain Krista Poppe Augusta based 4
Cape Air MICRONESIA 5
Cape Air has been proud to serve Micronesia since 2004 6
Cape Air s turboprop service connects Guam, Rota and Saipan, and dovetails with United s worldwide network Cape Air s Micronesia route map Nautical miles Key facts about Cape Air Micronesia Up to 5 flights daily Guam - Saipan 4x weekly Rota service Daily Rota service planned 114 miles 60 employees in the region Saipan: 23 In-sourcing investment 2014 Rota: 7 64 miles Two aircraft: ATR-42 46 seats Flight attendant service Lavatory 51 miles 7
Why this Cape Air business model in Micronesia? Geography: Distances between Guam, Rota and Saipan are optimum for regional prop aircraft Market size Market size does not support multiple frequencies operated by larger B737 aircraft Multiple flights per day for community convenience Limited other destinations to increase flying and therefore fleet size Mission: Local service and connecting opportunities: Up to 5 flights per day Result One aircraft flying multiple round trips each day A second aircraft a spare ensures reliability Scales poorly: two aircraft in Micronesia 8
Why don t you keep extra aircraft in the region? Spare aircraft economics New Used ATR Purchase Price $17,500,000 $5,000,000 Loan term 7 7 Interest rate 7.0% 7.0% Monthly Payment $264,122 $75,463 Passengers per month 10,000 10,000 Increase in ticket $26.41 $7.55 Excise tax rate 7.5% 7.5% Excise tax $1.98 $0.57 Total fare increase $28.39 $8.11 Each way 9
Safe airline operations require periodic scheduled maintenance at a dedicated facility Summary Our Ship 834 has been on the mainland for scheduled maintenance since March Ship 834 is expected to return to Micronesia in the near future Ship 836 will cycle out to the mainland for scheduled maintenance in 1Q15 These scheduled maintenance events leave one aircraft in Micronesia, with no spare 10
Cape Air and United are focused on promoting reliability while Ship 836 is on the mainland for its scheduled maintenance in 2015 Key points for reliability Ship 836 underwent significant work during the last heavy check Cape Air Saipan station Ship 834 is freshly overhauled ATR factory representative will be on hand during discovery to expedite parts ordering United agrees to operate a Boeing 737-800 as a back-up to the ATR if needed Communication: Saipan@capeair.com 11
Cape Air s COMMITMENT TO THE CNMI AND OUR EARTH 12
Cape Air s Commitment to the Earth is 1. Partnering with our communities on local environmental initiatives. 2. Implementing energy conservation improvements and renewable energy technologies at our facilities 3. Using new technologies and procedures to improve the energy efficiency of our aircraft fleet operations. 4. Helping our employees to save energy and go green at their homes. 5. Using environmentally responsible product sourcing, reducing our waste stream, recycling. 13
Alive in The Northern Marianas Saipan- Adopt-A-Place-- Oleai Park- Rota- Ocean Conservancy World Wide Beach Cleanup We re doing things for the earth that will make our grandchildren proud. 14
Alive in The Northern Marianas Rota Coastal Beach Clean Up 15
Thank You! 16