The big news out of the Seacoast last week carried a heavy tinge of disappointment. The plan to bring commercial airline service back to Portsmouth International Airport at Pease died suddenly after Streamline Air, LLC pulled out of the deal. Granted, the plan was less full-service and more along the lines of a token route–Portsmouth to Trenton-Mercer Airfield–but it was still a feather in the regional cap.
But that wasn’t what caught StateImpact’s attention. What we wondered is, why haven’t we ever heard of Streamline Air, and why in the world would they think Portsmouth-to-Trenton was a potentially profitable route? So we talked with Streamline Air’s Managing Director, Mark Cestari.
Part of Cestari’s job is figuring out potential new routes, and how to break into new markets. He describes Streamline as an “indirect air carrier.” That means unlike a major commercial airline, along the lines of United or even JetBlue, Streamline enters into multi-year contracts with charter carriers to fly specific routes.
But here’s where Streamline Air gets interesting. It’s not just a new air carrier. It’s very new, as Cestari explains, “Our first flight was in April of this year, and we’re now in our fifth month, and business has been growing between 20 and 30 percent a month. We’re very happy with that, because that growth took place during some of the typically slower summer months, and now that September’s here, we’re seeing some really strong velocity in growth on our current routes.”
Well…it’s probably more accurate to say “route.”
“Currently we fly just one route,” Cestari says, “from suburban Boston, Hanscom Air Field, which is 12 miles northwest of Boston, and we fly from there to the Philadelphia area. We actually fly to an airport in Trenton, New Jersey, that’s about 35 miles north of Philadelphia. So our current operation is just one airplane, one route, four times a day.”
Now, after the problems Portsmouth International had with another young airline–Skybus, which collapsed in 2008 under a multi-million dollar mountain of debt–they could be forgiven for being a bit gun shy about startup carriers.
But the thing is, they weren’t.
“Part of the reason we liked Portsmouth was the Portsmouth Development Authority had a very aggressive and very progressive approach to doing business that included some rebates, against our rent, provided we stayed there and provided our service for a specified period of time, and also some cooperative marketing support…So I think for a small airport, they were really very good to us at every touch-point.”
And Cestari’s very clear on this point. It’s not Portsmouth. It’s Streamline.
“The air carrier and air service environment is very dynamic, and at the eleventh hour, we needed to shift the aircraft that we were planning to use for Portsmouth into other service that we were already running, and it was unfortunate, but we have to service the markets that we’re already in before we go into a new market.”
In other words, suburban Bostonians needed more planes.
But really…how many people in the Portsmouth area want to go to New Jersey, anyway?
“You know,” he says, “there aren’t a whole lot of people queuing up to travel from Portsmouth to Trenton, proper. But if you draw a 15 mile circle around Trenton-Mercer Airport, there’s a million and a half people, and that goes into suburban Philly, central New Jersey, the Princeton area, Rutgers. So it’s a pretty metropolitan area, and basically Trenton-Mercer is a satellite airport for the Philadelphia area, the same way, to some extent, Manchester is a satellite airport for, say, the Boston area.”
Ok, so with Streamline at Portsmouth, Seacoast travelers could have theoretically caught the company’s standard priced $199 round-trip flight to the Greater Philadelphia area. Cestari tells StateImpact the plan was to run two 30 seat flights a day out of Portsmouth. Now, anyone who’s flown a large commercial carrier knows airlines really, really hate flying without full planes. It’s why they’re constantly fudging reservations, overbooking, and then begging for volunteers to spend a few more hours hanging around the airport. And this is where the small, indirect carrier business model of Streamline Air differs wildly from more established airlines.
“Our projections [for Portsmouth travelers] were fairly modest. We have a fairly fuel-efficient and green aircraft, and [would] start making money after only…10 passengers on board each flight. So we’re talking about a fairly small-scale operation, and obviously hope to grow that operation to more flights and more cities.”
If those 10 passengers all paid the $199 Streamline Air fare, that works out to $1,990. So for two daily flights out of Portsmouth, that’s $3,980. If that’s a profit, Streamline must have a very, very good contract with its carrier, very, very low overhead, or some combination of the two. At any rate, Cestari hopes Portsmouth will be on back on Streamline’s flight plan soon.
“We’re thinking the first quarter of 2012. We’re hoping not just [to] do the Trenton-Philly, but perhaps another route or two. You know, no one’s been in that airport for three years, and part of our thinking is coming in with more service, rather than less, might give us an easier time of recapturing some of the travelers who’ve found other airports to use instead of Portsmouth.”
And if you think that’s ambitious for a five-month-old airline…think again.
“The Streamline Air business plan calls for our serving probably six to eight cities in the next 24 to 36 months, probably as far west as Chicago and as far south as the Carolinas, with our regional product. And we’re also looking long-term ultimately at possibly serving longer-haul destinations like Myrtle Beach or Florida in the 2012 time frame as well.”