Island Air, the interisland carrier that has struggled to find its niche among rivals Hawaiian Airlines and Mesa Air Group’s go!, is being sold to an undisclosed buyer.The pending sale comes at a time when Island Air is in the midst of a fleet change to larger planes and a re-branding that includes a new paint scheme on its aircraft, a new logo and an enhanced website. Island Air said the deal is expected to close within the next six to eight weeks.
Les Murashige, 57, who came out of retirement to be appointed Island Air’s president in October, said Thursday he was bound by nondisclosure agreements and couldn’t identify the buyer or the price.
But Island Air spokesman Michael Rodyniuk called the new buyer "well capitalized" and said the purchaser isn’t another airline.
Murashige said there are no plans to lay off any of the company’s 245 employees.
"This is very positive for all the employees of Island Air as well as the communities that we serve," Murashige said. "It’s business as usual. At the appropriate time we’ll hopefully be adding more flights to the system."
Island Air, which has about 5 percent of the interisland passenger market share, through the years has tried to avoid the fare wars that were partly responsible for Aloha Airlines’ demise in March 2008. But it’s been an uphill battle since owner Charlie Willis’ family-owned company, Novato, Calif.-based Gavarnie Holding LLC, purchased the airline from Aloha Airgroup in 2004. Willis was upset when Hawaiian Airlines announced last year it would begin a turboprop operation this year. Hawaiian’s turboprop service could cut into Island Air’s market share and profits.
"The finances of the company are fine," Murashige said. "We’re struggling along. We’re OK, but we’re not making money hand-over-fist."
In August, Island Air received a capital infusion from Dublin, Ireland-based Kahala Aviation but declined to disclose the amount.
Willis couldn’t be reached for comment Thursday, but he has often said he wasn’t looking to sell the company.
Murashige said Willis didn’t go out looking for a buyer, but that "an opportunity just came and he felt it was the right time to do this."
"A lot of this (sale) has to do with Charlie and his other interests that were conflicting with things here," Murashige said.
"His ability to spend time and effort with the carrier here has diminished, and he feels it was appropriate to sell it. Charlie also understands that by doing that the carrier has the best chance for success with new ownership, new money."
Hawaiian has the largest interisland market share at 84 percent, followed by go! with 8 percent. But Island Air has been hoping to increase its 5 percent share by bringing in a new fleet.
Island Air currently offers 322 flights a week to Honolulu, Kahului and Kapalua on Maui, Hawaii island, Kauai, Lanai and Molokai. It has three planes in its fleet, including two leased 37-seat Bombardier de Havilland Dash 8 aircraft that will be phased out in February and June. Island Air brought in the first of two leased 64-seat ATR 72s in September and plans to bring in a second later this month. Plans to bring in a leased 46-seat ATR 42 have been delayed due to delivery and maintenance difficulties. The aircraft are manufactured by Franco-Italian airframe maker ATR.
Hawaiian also is planning to use ATR 42s in its turboprop operation that will see it expand to Molokai and Lanai.
Island Air will be able to expand and move in to new markets under the new buyer, said Island Air spokesman Rodyniuk.
"I truly believe we can be the solid No. 2 carrier," Murashige said. "We have no delusions of thinking that we can take over the world or be the No. 1 carrier. We’re just looking to be No. 2 as an alternative for people who want to travel on us."
Murashige, who was the chief operating officer at Island Air when he retired in 2009, assisted at nonprofit Lanakila Pacific — which helps people with disabilities — until leaving the organization to be a caregiver for his sick mother. Before Island Air he spent 16 years at Aloha Airlines.
"I came back because they asked me to help with the transformation of the company," Murashige said. "We’re re-fleeting, and the company brought me in to assist with that and to reorganize."
Former Island Air CEO Lesley Kaneshiro, whose position was changed to chief financial officer during the reshuffling, left her post on Dec. 31 to "pursue other interests," according to Rodyniuk.
Island Air was founded in 1980 to provide service between Honolulu and Princeville, Kauai.
