Boston-Maine to focus on charter services to save airline

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Portsmouth, New Hampshire-based Boston-Maine Airways has revised its business plan to focus primarily on charter services.

The carrier in a July 18 US DOT filing also says its now wants permission to operate five Boeing 727-200 instead of the seven it has requested for more than three years.

Boston-Maine’s new business plan comes less than a month after the DOT requested an update on the airline’s financial fitness to continue operations, saying its own investigation showed that the airline needed $22 million to continue to meet this requirement.

“[T]he circumstances affecting [Boston-Maine’s] initial application for large aircraft authority have changed substantially,” says the carrier.

“As the [DOT] is well aware, aviation fuel prices have increased dramatically over the past two years, and that cost impact is particularly severe in the case of relatively small-volume purchasers of jet fuel, like Boston-Maine,” adds the company.

Because of this, the carrier says it now plans to add two 727s to its current fleet of three such aircraft, and all but end scheduled service. For the next 12 months, the carrier will rely on just two aircraft to maintain its operations.

“[Boston-Maine] believes that it can operate passenger charter flights at a lower total operating cost than the higher level of fixed operating expense necessitated by scheduled-service operations,” says the carrier after telling the DOT it has recorded significant losses for the past three years.

“Second, [the airline] believes that its shift in emphasis to 727 charter operations, including both ad hoc charters and longer-term contract charters, will enable [Boston-Maine] to generate the same or greater annual revenues with 727 aircraft resulting from increased average daily hours of utilization with its 727 fleet,” adds Boston-Maine.

It is unclear if Boston-Maine intends to return to its initial plan to operate seven 727-200s. However, this expansion has been hindered by a lawsuit by the Air Line Pilots Association claiming a breach of labor laws when Boston-Maine transferred 727 operations when it liquidated its Pan American Airways subsidiary, and a separate federal investigation in to fraudulent accounting practices.