February 21, 2005
On a wing and a prayer | Kevin Waters bets his Penobscot Bay aviation company can succeed where others have failed
By Dorothy Ogrodowczyk
When pilot Kevin Waters lost his job during Maine Atlantic Aviation's collapse, he didn't waste any time getting flight service to the Penobscot Bay islands back up and running. Maine Atlantic, a fixed base operator and air taxi service based at Knox County Airport in Owl's Head, announced in mid-December it would discontinue flight service to the islands, which it said was losing money, and laid off its pilots, including Waters.
Just two days after the announcement, Waters and his business partners began looking to form their own flight company. And 10 days after that, the new company, Penobscot Island Air, began offering its first flights ˆ on-demand air taxi service; mail and grocery delivery; and medical evacuations ˆ to Vinalhaven, Matinicus, Deer Isle and North Haven from its temporary headquarters at the Knox County airport. The firm leases two six-passenger Cessnas, and charges $44 to $90 a passenger for service to the islands. Waters, 45, serves as the company's only pilot.
A Northampton, N.H., native, Waters began flying in 1975. He operated commercial and corporate aircraft before settling in South Thomaston in the mid-90s, and he's worked for companies providing air taxi service in Penobscot Bay since 1995. While he has reason to be cautious about his new company's future, given the failure of Maine Atlantic's air taxi service after less than a year in business, he says he's optimistic about Penobscot Island Air's viability. "We think this will work," he says, because his business plan differs from Maine Atlantic's in areas he says are key.
For starters, Penobscot Island Air has fewer expenses than an FBO like Maine Atlantic, says Waters. "Our primary focus is servicing the islands ˆ moving freight and people," he says. "Servicing airplanes, renting fuel trucks and staffing [for an FBO] is a lot of overhead for the lean times of the year, December through May." In addition, he says, the islands now maintain their own airstrips, an expensive task that Maine Atlantic Aviation used to do. Waters estimates the maintenance costs of Vinalhaven's airstrip alone to be about $6,000 a year.
Not only is Penobscot Island Air saving money on operating costs, but Waters and his team don't have a challenge faced by most new businesses: building a customer base. "People that have flown with us over the years have called," he says. "We have a personal relationship with our customers." The company also has five freight contracts, including deals with Federal Express and the U.S. Postal Service, that make up almost half of its revenues.
Neither Waters nor his partners have taken a salary, choosing instead to finance the company's initial stages with personal funds. "I've put house equity monies into the business," Waters says, "and the four core guys" ˆ former Maine Atlantic employees ˆ "have made sacrifices also." He said he hopes to pay himself and his partners a stipend in March but, for now, all revenues are going back into the company, which already has plans to expand. Waters says he wants to lease additional planes and hire several more pilots, and add sightseeing flights. He estimates the changes will allow the company to gross about $800,000 in 2005. Will he get there? "Weather is our biggest variable," he says.
Despite his ambitious plans, Waters admits the odds are stacked against him. "Aviation is a tough business," he says, "especially in Maine." But he says he's received a lot of community support, and a few people have even offered to invest in the company, which Waters says he may consider in coming weeks. "There's a lot of people in our corner, and a lot of people who think we can't do it," he says. "But we provide a service, and we take pride in what we do."
Just two days after the announcement, Waters and his business partners began looking to form their own flight company. And 10 days after that, the new company, Penobscot Island Air, began offering its first flights ˆ on-demand air taxi service; mail and grocery delivery; and medical evacuations ˆ to Vinalhaven, Matinicus, Deer Isle and North Haven from its temporary headquarters at the Knox County airport. The firm leases two six-passenger Cessnas, and charges $44 to $90 a passenger for service to the islands. Waters, 45, serves as the company's only pilot.
A Northampton, N.H., native, Waters began flying in 1975. He operated commercial and corporate aircraft before settling in South Thomaston in the mid-90s, and he's worked for companies providing air taxi service in Penobscot Bay since 1995. While he has reason to be cautious about his new company's future, given the failure of Maine Atlantic's air taxi service after less than a year in business, he says he's optimistic about Penobscot Island Air's viability. "We think this will work," he says, because his business plan differs from Maine Atlantic's in areas he says are key.
For starters, Penobscot Island Air has fewer expenses than an FBO like Maine Atlantic, says Waters. "Our primary focus is servicing the islands ˆ moving freight and people," he says. "Servicing airplanes, renting fuel trucks and staffing [for an FBO] is a lot of overhead for the lean times of the year, December through May." In addition, he says, the islands now maintain their own airstrips, an expensive task that Maine Atlantic Aviation used to do. Waters estimates the maintenance costs of Vinalhaven's airstrip alone to be about $6,000 a year.
Not only is Penobscot Island Air saving money on operating costs, but Waters and his team don't have a challenge faced by most new businesses: building a customer base. "People that have flown with us over the years have called," he says. "We have a personal relationship with our customers." The company also has five freight contracts, including deals with Federal Express and the U.S. Postal Service, that make up almost half of its revenues.
Neither Waters nor his partners have taken a salary, choosing instead to finance the company's initial stages with personal funds. "I've put house equity monies into the business," Waters says, "and the four core guys" ˆ former Maine Atlantic employees ˆ "have made sacrifices also." He said he hopes to pay himself and his partners a stipend in March but, for now, all revenues are going back into the company, which already has plans to expand. Waters says he wants to lease additional planes and hire several more pilots, and add sightseeing flights. He estimates the changes will allow the company to gross about $800,000 in 2005. Will he get there? "Weather is our biggest variable," he says.
Despite his ambitious plans, Waters admits the odds are stacked against him. "Aviation is a tough business," he says, "especially in Maine." But he says he's received a lot of community support, and a few people have even offered to invest in the company, which Waters says he may consider in coming weeks. "There's a lot of people in our corner, and a lot of people who think we can't do it," he says. "But we provide a service, and we take pride in what we do."
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