The Islander

THE ISLANDER

Cape Air builds a prosperous 135 business with compassionate approach

BY john boyce, contributing editor

November / December 1999

HYANNIS, MA — For Dan Wolf, personal ethics and values are not only a means to a satisfying life, they are the means, the underpinning, to a prosperous business.

Wolf, the president of Cape Air/Nantucket Airlines headquartered at Barnstable Municipal Airport in this Cape Cod city, has imbued his company with a simple philosophy of sharing the wealth and it has paid off handsomely. In ten years, Cape Air, the original company name, has merged with Nantucket Airlines and has grown from one aircraft flying one route into the largest independent regional airline in the United States, serving island and mainland markets in New England, Florida, North Carolina/Virginia, and the Caribbean.

Explains Wolf, "My experience has been that if you believe in other people and trust other people and have high expectations for other people, you are very seldom let down in life. That's the way I like to live and for me it really works.

"And I think for the company it really works; that philosophy makes us a better company and makes us more successful."

Cape Air/Nantucket operates 150 scheduled flights a day during season with 47 eight-place Cessna 402s. The average flight is 45 miles and projections for the current fiscal year are that the company will fly between 20 and 25 million passenger miles and carry 520,000 business and holiday passengers, up from last year's 450,000 passengers.

Employee Ownership
The key to the company's success has been Wolf's steadfast commitment to serving his employees and his markets first before personal or corporate considerations. The symbol of his attitude is the company mission statement in the form of an acronym: MOCHA HAGoTDI (mocha hagotti) — Make our customers happy and have a good time doing it.

Part of the good time for employees is having the opportunity to own part of the business. When three of the company's original investors sold out, Wolf immediately created an Employee Stock Ownership Plan (ESOP) (see sidebar) and he has kept the company independent of major airlines so as to be able to better serve his market communities.

"Philosophically," Wolf says, "I have always believed in employee ownership... To have a successful ESOP, and this is why we did it, you have to philosophically believe that the employees who are creating the value and who have really worked hard to build the company deserve to own some of it, and the ESOP is a wonderful vehicle to do that. It's an egalitarian vehicle; there's no individual sitting around determining who gets what percentage of the ESOP. Philosophically, we just believe that the employees who are here day in and day out building the company should own some of it."

Concerning his decision to keep the company independent, says Wolf, "If we were a Delta Express or a USAir Express, we would be setting up a schedule which was convenient to feed people to those airlines' flights in Boston. We're not bound to do that with one airline, so what we do when we set our connections is we sit down and we say, ’What is the service, let's say, from Boston to Los Angeles?' We look at how best to connect to the destinations rather the airline we're connecting with.

"If we were a code-share we would first and foremost need to look at who we are connecting with and what their schedule is. We're much more driven by the demand of the customer; where they're going to want to end up going and making good connections."

A Natural Development
The ESOP was a natural outgrowth of the way the company is managed. It never had a monolithic management structure. Wolf is the head man but he acts more as a guide and a scout for the company's growth. The growth itself is managed and accomplished by the 30 to 35 managers and the nearly 500 employees who are encouraged to walk through the open doors of the company offices and give opinions and ideas about their departments and the company.