Island Air’s passenger traffic has fallen five of the past six years and the local carrier likely ended 2012 carrying the fewest number of people since it was purchased by Novato, Calif.-based Gavarnie Holding LLC in 2004, according to federal data.
The regional airline, which last week said it has a preliminary agreement to be purchased by an unnamed buyer, carried 241,019 passengers through the first nine months of 2012, according to data the airline recently reported to the U.S. Department of Transportation’s Bureau of Transportation Statistics. That was down 21 percent from 304,641 during the same nine-month period in 2011.
Final 2012 numbers won’t be released by the DOT until March.
But even if Island Air’s fourth quarter in 2012 matched the final three months of 2011, the airline still would have ended 2012 carrying 337,628 passengers — the lowest total since 2003.
Island Air’s reluctance to identify its new buyer concerns the company’s labor unions and the state’s tourism agency, the Hawaii Tourism Authority.
"We’re waiting to hear how this thing evolves," said David Uchiyama, the HTA’s vice president of brand management. "Our concern is that they get certification for that new aircraft that they brought in so they can get it up and flying."
Island Air, which has 245 employees, is currently operating two 37-seat de Havilland Dash 8s, but both of those turboprops have to be returned to their lessor within the next five months. Island Air has one idled 64-seat ATR 72 awaiting certification from the Federal Aviation Administration, and the company said it is attempting to acquire another ATR 72.
Uchiyama said that Island Air told the HTA it would brief the agency when "things became a little bit firm."
So far, though, Uchiyama said the HTA is in the dark.
"We’re very concerned about the interisland market and the competitive playing field we’re dealing with," Uchiyama said. "One of our initiatives here is to be able to distribute more of our visitors to the neighbor islands, and any interisland carrier becomes an integral part of that — Hawaiian, Island Air, go!, Mokulele. We’re concerned about them (Island Air) going under very much so."
Island Air, which has about 5 percent of the interisland market, has been hard-pressed to fill its planes. Through the first nine months of this year, it filled just under 60 percent of its available capacity. That came after a relatively strong 2011, when its load factor was 67 percent — the highest ever under its current ownership.
The airline has struggled to compete in a market with larger and more aggressive rivals and frequent fare wars. Island Air was purchased from Aloha Airgroup by Charlie Willis’ family owned company Gavarnie. Willis has not returned calls and emails seeking comment.
Island Air spokesman Michael Rodyniuk said Tuesday the unnamed buyer is currently doing due diligence in reviewing the airline’s books. The only hint Rodyniuk has offered in regard to the new buyer’s identity is that it is not another airline.
"I’ve never seen a situation where there’s a buyer that has some sort of agreement and they refuse to be identified," said John Dean, senior labor relations counsel for the Air Line Pilots Association.
"I don’t know what the purpose would be in doing that."
