A Maine aviation company that took off more than a half-century ago when it started offering sightseeing flights to tourists has shuttered its small-aircraft rental business and rebranded itself to focus on high-end aviation services.
Mac Air Group, formerly Maine Aviation Corp., has flown from the Portland International Jetport since 1959, but this year the company ceased short-term rentals and flight instruction so it could focus on a more lucrative market: sales and charters of luxury aircraft.
The decision, which was years in the making, reflects ongoing changes in the private aviation market – high fuel costs and the shift in demand to other parts of the world made offering local two-seater rentals less financially viable. The shift marks a return to strength for the company, with demand for nonessential luxury services and big-ticket items rebounding after it wilted in the financial meltdown of 2008.
As the economy returns to health in the United States and demand for high-end aviation services expands overseas, Mac is following this demand to new corners of the globe, catering to wealthy business travelers, politicians, ex-presidents and famous recording artists, in addition to recently minted millionaires and entrepreneurs from Malaysia, Singapore, China and the Middle East. Although Jim Iacono, director of business development at Mac, declined to provide annual revenue figures, he said the company is thriving.
“We’ve grown into more of an international company,” he said.
Now, the company is preparing to launch a shared jet ownership program that will allow four customers to each buy a share of a nine-seat Hawker 1000.
For a monthly management fee plus hourly charges for running the airplane, share owners get 100 hours of flight time per year. Iacono plans to target New England fliers who shuttle frequently between New York, Washington, D.C., Florida and the small airports in between that are not frequently served by commercial airliners.
According to one industry analyst, it could be the company’s most risky venture yet.
Mac will be competing with NetJets and Flexjet, two of the leaders in shared jet ownership, both of which have more capital and greater power to negotiate fees and fares than Mac does.
“Anybody who’s got a couple aircraft that have downtime these days have come up with a (shared) program, but they don’t play in the same league as NetJets and Flexjet,” said James D. Butler, whose Bethesda, Md., company Shaircraft Solutions advises private aviation customers.
Because Mac has only one fractionally owned jet, scheduling and maintenance could be difficult if multiple owners seek to fly on the same days or schedule a flight only to find the plane down for maintenance, Butler said.
“Some regional operations have worked, but it’s a tough business,” Butler said.
But Iacono said Mac has laid the groundwork to be successful and plans to move deliberately while the economy in the United States slowly returns to health.
The company’s charter and aircraft management divisions, which are its core services, cater to the wealthy, who can afford to charter a flight or purchase their own small jet.
For $3,500 to $4,500 per hour, depending on the size of the plane, charter flight customers receive what commercial air travel cannot provide: made-to-order flight schedules, direct service to airports that commercial airlines don’t serve and, perhaps above all, privacy, Iacono said. Mac charters between 700 and 800 flights annually, and operates four 16-seat Challenger 850 aircraft and four nine-seat Hawker 1000 planes.
The company’s maintenance division will service nearly any aircraft that fits inside its 12,000-square-foot hangar. When the planes can’t come to Mac, its mechanics go to the planes, especially convenient for commercial airliners that need Mac’s mobile mechanics to travel around New England.
Mac also sells aircraft, including 50-seat regional jets formerly owned by large commercial lines, which it converts into customized 16-seat luxury planes. A company in Peterborough, Ontario, removes the drab commercial interior, adds big fuel tanks to extend the craft’s range to 3,000 nautical miles and installs virtually anything it can fit inside that someone’s willing to pay for.
Couches are common, as are tables with seats that face each other.
One client ordered a plane with high end audio-visual components, complete with a database of 30,000 movies. Another client had Mac install a bedroom. The jets sell for $11 million to $18 million, depending on how they’re outfitted, but buying a conversion still offers exclusivity at a lower price than buying a new plane, Iacono said.
Iacono said half of its charter flights are for clients in the entertainment business whose record labels or studios contract Mac to provide air travel for a national or world tour, known as a road show.
Although he cannot disclose the identities of many of the company’s big-name clients, Iacono said, rock musician Jon Bon Jovi is one of them. Mac provided flights during the New Jersey artist’s latest world tour. Most clients are respectful, he said, but an occasional diva or tough customer surprises his staff.
One such incident took place four years ago during the Vancouver Olympics, when a family that owns a prominent local retail chain “had a ruckus” on the flight north. Cake was smeared in the carpets. Sodas exploded. Pizza was everywhere.
Another memorable experience came when Mac served as aircraft sales agent for a well-known Manhattan real estate mogul, notorious for his brash style, signature coiffure and high-profile marital history, whom Iacono declined to name.
“I was honored to be yelled at by him,” Iacono said.
To support its growing reach, Mac has maintained a four-person flight crew in Kuala Lumpur, Malaysia, since 2010 and is making inroads in China and Singapore, Iacono said.
With only 65 employees, Mac remains a small player in the world of private flight. But the third-generation, family-owned company has carved out an eclectic niche of services, and because of its ability to maintain its own planes, has kept costs relatively low.
The company was founded in 1947 by brothers Joe and Tom Caruso, who had recently returned from World War II. On the advice of a relative, the pair began offering scenic flights on a seaplane out of Southwest Harbor. Three years later, the brothers leased space at the Bar Harbor Airport, and by 1959 moved operations to the Portland International Jetport.
The business was taken over by Joe Caruso’s son, Allyn, who spent his life around planes. By age 19 he had become an airline captain, and he now runs the business with his wife, Alysan, and their son, Travis, who manages the maintenance department.
When the economy crashed in 2008, Mac’s revenue began a precipitous drop. If there was a moment that hinted at the decline that would follow, it came in November 2008, when executives at Ford Motor Co., General Motors and Chrysler were castigated by members of Congress for flying in luxurious private jets to appear before lawmakers to plead for the government’s financial help. Their favored mode of transit became a symbol of tone-deaf excess that many in the declining economy would not be able to afford.
“We’re only now coming back to where we were,” Iacono said. “Values in jets are very similar to values in homes. Jets worth $15 million in 2008 are now worth $5 million.”
On a recent morning at the company’s maintenance hangar at the jetport, longtime mechanic Christopher Merrill said he remembers the lean times and said he is convinced the company puts great value in its employees.
“Management refused to let people go,” Merrill said. “We had people sweeping floors, painting walls. Management believes their people are its biggest asset.”
Matt Byrne can be contacted at 791-6303 or at: