PROVINCETOWN — Cape Air’s decision to cancel all flights between Provincetown and Boston from Nov. 5 to May 15, announced in an Aug. 30 letter from CEO Linda Markham to Provincetown Airport Commission chair Brian Orter, has officials calculating what the company owes the town — and hoping for a renegotiation of terms.
In a letter sent to Markham on Sept. 27, Orter and Town Manager Alex Morse wrote that Cape Air’s “reduction in service will constitute a breach of its lease with the Town.”
The existing lease, signed in 1997 and extended several times since then, “fundamentally requires” that Cape Air provide year-round service, wrote Morse and Orter.
Because the company will no longer do so, it owes the town landing fees of $100 for each Cessna flight and $150 for each Tecnam P2012 flight that arrived at Provincetown Airport starting Aug. 31, the letter says.
There were 329 such flights between Aug. 31 and Sept. 27, amounting to $34,750 in landing fees for just those four weeks, Morse and Orter’s letter says.
The town is also seeking $117,126 in back rent from Cape Air because the lease says the company’s rent was supposed to increase every year by the amount of the annual Consumer Price Index or 3 percent, whichever is lower.
The company has been paying the same rent for its use of Provincetown Airport, $3,555 per month, since “at least 2011,” Orter and Morse wrote. The company’s current rent should actually be $4,915 with those annual adjustments, they wrote, and the town is now seeking to recoup 13 years of underpayments.
The town’s letter also says that Cape Air will still have to pay rent for several months of this coming winter, because it’s obligated to pay for six months after breaching its lease.
In all, the town is seeking at least $170,000 from the company — although the letter concludes by saying the town is “willing to negotiate in good faith the terms of continued Cape Air service without interruption, including at least one round-trip flight per day” at Provincetown Airport.
On Oct. 8, Morse told a meeting of the airport commission that the town hoped to get Cape Air “back to the table to have a conversation about this winter.”
The town could try to negotiate Cape Air’s six-month cancellation down to just three months, Morse said.
“At the end of the day, it’s very possible we don’t have service this winter,” Morse told the commission. “But rest assured, we are going to do everything we can to make sure this is the last winter that we don’t have service.”
Cape Air CEO Linda Markham declined a request for comment from the Independent, stating through a spokesperson that “since we are engaged in ongoing discussions with the Town, it would be premature and inappropriate for us to comment at this time.”
Lots of Concessions
For the entire 35-year period that Cape Air flew the Provincetown-to-Boston route, the town’s “minimum standards for operation” at Provincetown Airport have been written so that an air carrier that flies here in summer would also have to fly every day in winter, airport manager Billy Juraschek told the Independent last month.
The idea was that the profitable summer months would underwrite winter losses — and a competing carrier would not be allowed to poach lucrative summer traffic while avoiding the town in winter.
Last year, however, in response to concerns raised by Cape Air about the unprofitability of winter service, the airport commission told the company it could fly as few as one roundtrip flight per day only three days per week — less than half the official requirement of two roundtrip flights every day in winter, Orter and Morse said at the Oct. 8 meeting.
That change was offered as a kind of trial run and wasn’t formally voted into the town’s “minimum standards” document, Juraschek said — but the airport commission believed it had helped the company.
“We gave them a lot of concessions” in late 2023, Orter said at the meeting. After not hearing any complaints from the company this year, “We did not think they would end that agreement abruptly.”
The select board is now discussing the idea of an operating subsidy, Morse told the commission, but Cape Air has described it as something that would be needed every winter, he said.
The town is not sufficiently remote to qualify for the federal Essential Air Service program that typically provides those subsidies, Morse said. There is an alternative called Small Communities Air Service Development grants that could provide such a subsidy, Morse said, but the town can’t apply to that program until next July.
Seeking Year-Round Service
The town is also looking for alternative carriers that could step in where Cape Air has left off, Orter and Morse told the commission on Oct. 8.
Orter named Boutique Air, Southern Airways, and Tradewind Aviation as carriers that might consider the Provincetown-to-Boston route.
If the goal is to secure year-round service, though, then the summer would need to be lucrative enough to support winter losses, or a subsidy would have to fill the gap.
A review of airport commission data shows that Cape Air’s passenger count at Provincetown airport, excluding the 24 months following the Covid shutdowns of 2020, has been remarkably steady in the winter months ever since 2010.
Instead, it is summer traffic that has dramatically declined: from an average of 2,390 passengers per month each July and August in the 10 years before the pandemic to an average of 1,300 per month each July and August in the last two years.
Passenger counts in June and September have similarly declined since the pandemic. The off-season — although not profitable, according to Cape Air — is the most stable part of the business in terms of passenger counts.
Summer sales are important not just because of their volume, Juraschek said — summer is also the time when Cape Air charges the most for tickets. The number of passengers per month, the number of passengers per plane, and the price of each ticket are all highest in July and August, and each of those factors contributes to summer profitability.
Juraschek said he didn’t think that competition from charter companies was responsible for the decline in Cape Air’s summer sales — “the fast ferry is where the competition is,” he said.
