Pellegrino launches cargo airline for local produce

Local farmers and ranchers will soon be able to sell their agricultural products to the neighboring island of Guam with the advent of cargo planes that aim to undercut high shipping costs.

Businessman Tony Pellegrino announced yesterday his plan to set up Cargo Air Bridge, a company that will initially have two cargo planes that will transport local produce between the islands of Saipan, Tinian, Rota, and Guam.

Pellegrino said CAB, which will serve as a figurative bridge between the islands, will be made possible with the acquisition of Arctic Circle Air, an American airline based in Fairbanks, Alaska.

The acquisition comes with one 1,000-lb small aircraft, another 5,500-lb aircraft, all manuals and licenses.

As these aircrafts are Short Sherpa planes, Pellegrino said they’re “very sturdy.”

Pellegrino said he and business partner Paul Zak are also proud to have on board Arctic Circle Air Capt. Jim Parrish, who has over 30 years of experience in the airline industry and will serve as the company’s vice president.

The $1.7 million price tag for the acquisition includes the purchase of Arctic Circle Air and their operating capital for about six months to a year.

According to Pellegrino, Saipan, Tinian, and Rota are capable of growing agricultural produce that can supply at least a small share of the Guam market, which he said imports millions of dollars worth of fruits, vegetables, and flowers from Korea and the U.S. mainland.

“Seeing that, we found that there is a dire need to connect or build a figurative bridge between the islands so we can fly things in and out quickly,” he told reporters in an interview at the Northern Marianas Trades Institute.

Primarily, CAB will service the four islands twice a week—Mondays and Thursdays. As the volume of produce needs increases, Pellegrino said they will have to add more CAB flights.

Zak said the bulk of service of both Cape Air and Freedom Air is passengers, which prevents local farmers and ranchers from penetrating the Guam market in terms of selling their produce, which are of acceptable quality and have competitive prices.

“We virtually sell nothing to Guam,” said Zak.

Pellegrino disclosed that they will be sending Parrish to Alaska on July 6 to sign the memorandum of agreement and make payments.

He said they expect the aircrafts to arrive on Saipan by September, have a mechanic work on it, and make its inaugural flight in October.

Zak said that Guam will serve as “a stepping stone” in marketing local produce. “If we could get it from here to Guam, we could go to many other places,” he said.

Future plans include servicing the Federated States of Micronesia, Palau, and the rest of Micronesia.

According to Pellegrino, CAB will correspond with his slaughterhouse project in Lower Base, which is scheduled to open by September.

Pellegrino admitted that it was his fault why the slaughterhouse project was “temporarily suspended.”

“I was too ambitious. Too big of a plan initially. The reality is to start small and grow,” he said, adding that the project already has obtained permits from various government agencies, including Zoning Office, Public Works, the Division of Environmental Quality, and the U.S. Department of Agriculture.

Pellegrino said the slaughterhouse project will start initially with about 20 to 30 pigs a month, which will be supplied to the four markets.

Zak added that CAB will help hog raisers have cheaper feeds, which are needed in the slaughterhouse project.

“It all comes down to one keystone, which is the ‘bridge,’” said Zak.

Pellegrino disclosed that Zak had done the research work for the cargo plane venture by going to and from Guam with produce in tow in the last 18 months.

“The problem is how to get it sustainable, how to keep it going all the time. The only sense is to have a cargo plane like this,” he said.

Like any new business, Pellegrino admits that there are risks involved in this project but noted that these are “calculated risks” as they have eliminated as many bad risks as possible.

“It’s a risk, but I think I’d rather have [tried and failed] than to wish I had tried and not even done anything. I’m very optimistic, and I believe we have a lot of potential,” he said.

Pellegrino said they are inviting other community members to invest in CAB, which they aim to become a “community project.”

“I welcome any potential investors,” he said, adding that they also have a three-year projection plan to present to those who are interested in joining the venture. “We hope that this will jumpstart the economy.”