Point2Point Airways principle John Boehle provided an update of the Bismarck-sponsored, federally funded transportation demonstration project on Tuesday.

Boehle and P2P CEO Michael Morman met with members of the steering committee, which helped bring P2P to fruition through a $1.25 million grant application. Members included Mayor John Warford, Kadrmas, Lee & Jackson Inc.'s Niles Hushka, city administrator Bill Wocken and Bismarck Municipal Airport Director Greg Haug.

The purpose of P2P is to provide an alternative to the conventional hub-and-spoke air travel. With the business community its primary target, P2P hopes to use next-generation aircraft and community airport global positioning systems to provide affordable transportation.

The end of October marked 10 months that P2P has been in operation, and Boehle provided numbers through the first three quarters. Basic costs of P2P services are $2.50 a mile.

The cost of a 600-mile round trip with corporate pricing would be $1,500.

The planes, having a capacity of three passengers, would cost $500 a seat.

P2P has 10 employees, including five pilots. In January or February, the company will open its first office, which will be run by Jan Steiner, a pilot and the company's first station chief.

The office will be in Bismarck and the company is still looking for quarters, along with setting up maintenance and storage contracts.

"We're still a virtual company; there are no bricks and mortar, yet," Boehle said. "Our office here in Bismarck will be our first."

P2P has focused on serving Bismarck, Fargo and Grand Forks. It has been stationing its planes as demand dictates. It does have a plane in Minneapolis, where it has received a lot of requests for the service.

According to Boehle, P2P currently has five planes and will meet its contract for the first year. The second year calls for expanding the fleet to 15 planes, but Boehle said he expects to have 25 to 30 planes. For each plane, P2P will have 1.3 pilots. By the end of 2010, Boehle said he expects P2P to have 100 aircraft and 134 pilots.

Plans call for coming up with $2 million in operating funds for 2007 through the equity developed in P2P. Morman said the company also expects to raise $30 million to $50 million over the next three to five years to purchase aircraft. P2P is looking to investors to provide funds for the aircraft. P2P is also working with the Rain Fund, a regional network of investment fund chapters, to provide some funding.

"The demands of our contract with the city obligate us to raise $8 to $9 for each dollar from the grant," Boehle said.

"Because of this, we had to focus on commercialization, and particularly on funding."

In the first quarter of 2006, P2P flew 31,000 miles; in the second, 54,141 miles; and in the third, 112,363 miles.

It averaged 1.56 passengers per flight during the first quarter, 1.86 in the second and 1.76 in the the third.

About 32 percent of P2P's flights originated out of Fargo; 25 percent from Bismarck; 18.5 percent from Grand Forks; and 24 percent from other areas in North Dakota, South Dakota, Minnesota and Montana.

P2P is still working on its internet-based reservation system and trip-sharing programs.

Hushka said that KLJ, which has a contract with P2P, has had some problems getting flights at times. He said he feels that regularly scheduled flights to Minneapolis might work well, since he sees many of the same people from various companies making the trip on a regular schedule using conventional commercial flights.

Boehle said that the company is still working on the reservation system and trip-sharing software, and it has provided its share of frustration. P2P also is trying to work with other regional air services to participate with P2P in scheduling flights.

While P2P originally looked to Cirrus to provide four-seat planes, it has begun considering the Diamond Twin Star and also the Cessna Caravan, which has a larger passenger capacity. The Twin Star has greater de-icing capabilities. Boehle said he also has hopes of acquiring a VLJ (very light jet) in 2007.

Research shows that most of P2P's customers prefer to schedule flights through person-to-person contact on the phone, Boehle said, and the company is looking at developing a reservation center to meet this purpose.

"We first have to develop the manual reservation processes and then automate them through the Web," Boehle said.

Wocken asked that P2P provide regular updates for the city and steering committee.

(Reach reporter Gordon Weixel at 250-8255 or gordon.weixel@;bismarcktibune.com.)