Island Air is doubling its operations just as the interisland market is heating up.
The state’s largest turboprop operator said Thursday it will add seven planes to its fleet with a total of 376 seats. The leased planes will replace four aircraft currently used by Island Air with a combined 144 seats.
The first of the seven aircraft, built by the French-Italian turboprop maker ATR, will arrive next month, Island Air said. The new fleet will coincide with a re-branding that includes a new paint scheme on the aircraft, a new logo and an enhanced website.
Island Air’s announcement came just two days after the state’s largest carrier, Hawaiian Airlines, said it would establish a turboprop subsidiary to fly to smaller airports like Kapalua, West Maui; Molokai; and Lanai. That will put Hawaiian Airlines in direct competition with Island Air.
Island Air owner Charles Willis said he was surprised Hawaiian would muscle in on the state’s smaller carriers. Hawaiian jets already carry 84 percent of all interisland passengers, according to the Hawai‘i Tourism Authority. Island Air has a 5 percent market share.
"I’m not sure how it will play out with the citizens, the governor and Sen. (Daniel) Inouye, and whether they’ll put up with Hawaiian wanting 100 percent of the market," Willis said.
Island Air went on the offensive Thursday with the announcement of its expansion.
CEO Lesley Kaneshiro said the airline has been working on bringing in new planes and the redesign for more than a year.
"We’re delighted to unveil our new look, marking our new beginning," Kaneshiro said in a news release. "We will be the first to operate this comfortable ATR 72 jet-prop aircraft in Hawaii, and with additional aircraft delivery on the horizon, we’ll be Hawaii’s fastest-growing interisland carrier."
Island Air is bringing in two 68-seat ATR 72s this year with the first one scheduled to be delivered in mid-August. The airline plans to bring in five 48-seat ATR 42s next year.
The new planes will replace the three 37-seat Bombardier de Havilland Dash 8 aircraft currently in Island Air’s fleet, as well as the 33-seat Saab 340B plane that Island Air is leasing this year.
"This affirms our ongoing dedication to commercial aviation in Hawaii and our focus on innovation coupled with steady growth," said Willis, chairman of family-owned Gavarnie Holding LLC, the parent company of Island Air.
Willis said ATRs are the fastest-selling regional airplanes in the world and are sold out of production for the next three years.
"They’ve become more popular than jets because of their efficiency and green nature," he said.
Mark Neely, vice president of marketing and sales for ATR North America, said with the ATR 72s and ATR 42s, Island Air will be able to serve any major airport "with the lowest cost and greatest level of passenger comfort."
Gavarnie, based in Novato, Calif., bought Island Air from Aloha Airgroup in 2004, but it hasn’t always been smooth flying. Willis told the Star-Advertiser in April that it’s been an uphill battle since then, especially when Mesa Air Group’s go! entered the market in June 2006 and sparked a fare war, cutting interisland tickets to as low as $1 one way and typically pricing them from $19 to $39.
"We’ve climbed back but it’s been unbelievably difficult," Willis said during that April interview. "We’ve still got a great team at Island Air, and we’ve persevered and things have gone very well. Hopefully, things go well in the future. We just want a peaceful coexistence, and no one needs to kick anybody out of business."
Willis said Island Air was "marginally profitable" last year and has shown small profits for three or four of the seven full years he has owned the company.
"This is not a business that you get rich in," Willis said in April. "It is a business where you can lose a fair amount of money. I think go! and Aloha are good reflections of that. Let’s put it this way: We’ve lost more money than we’ve made."
Island Air, founded in 1980 to provide scheduled service between Honolulu and Princeville, Kauai, offers 352 weekly flights primarily to smaller airports. It has more than 250 employees.
