The Cost of Seaplane Flying

When I look at our fares I am dissatisfied with where they are and would like to see them become more competitive over time relative to other prices. I realize this may surprise some of you - but I do keep the affordability of our services top of mind at all times.

So WHY does it cost so MUCH?!?
Well first I need to establish with you (contrary to public opinion) that while Seaborne covers its costs, we are NOT profitable. All revenue generated by those fares goes right back into the company to cover expenses and to fund changes as outlined below.

The primary reason our fare level is it costs more than twice as much to operate seaplanes than land based aircraft. Why? Because the salt and rough water take a significant daily toll on our aircraft! In order continue to fly SAFELY, which is our first priority, we must constantly overhaul aircraft and replace expensive parts. Here are some numbers: aircraft overhauls (done every three years) run upwards of $1,500,000. Parts, replaced multiple times daily, cost as much as $25,000! Engines replacements are over $300,000! Then there are the aircraft themselves, the Twin Otter - which now cost over $4,000,000 to put in service, twice the amount just three years ago!!! Land based aircraft, engines, and parts, by comparison, last 3 to 4 times longer!!! Now add the fact that the price of fuel has tripled over the past three years!

So what are we DOING about it?
Don't worry we're not about to throw in the towel! We've decided to tackle our high costs with the following plan: 1) continue to build the BEST regional airline team in the business. Our people are our NO. 1 asset and along with the proper tools and motivation we will continue to increase productivity (lowering expenses). 2) bringing on more aircraft to allow each aircraft more time in the hangar to conduct additional preventative maintenance which will an increase time between expensive overhauls, 3) doing overhauls in St. Croix - reducing expense and time out of service. 4) Adding more flying.

These moves should allow us to reduce expenses while increasing flights available - effectively reducing the cost per seat provided. Consequently, we should be able to provide some of these new seats at lower prices during the midday while keeping the rest of our fares competitive to other consumer offerings.

Thank you very much for your valuable business, support, and understanding!

As always — from ALL of us at Seaborne, thank you (times the Power of TWO) for your valuable patronage!

Sincerely,

Omer ErSelcuk
President & CEO