The death of Aloha Airlines five years ago resulted from a wild, three-way interisland price war, but the move now by Lanai billionaire owner Larry Ellison to purchase Mesa Air Group’s interisland go! brings hopeful news for interisland fliers. In a short time, Hawaiian Airlines has broadened into a national and international carrier and should be able to withstand interisland confrontation by a stronger Island Air, which Ellison bought in February. Let the competition begin, and may it benefit consumers.
The bitterness in Aloha’s 2008 bankruptcy was regarded at the time by David Banmiller, its president and CEO, as "an incredibly dark day for Hawaii" — some 2,000 people lost their jobs in the state’s largest mass layoff — and that view was shared by the statewide community. Having been blamed for Aloha’s demise, go! remained in flight but has undergone its own financial problems, eliminating 100 aircraft after filing for bankruptcy in 2010.
Enter American business magnate Ellison, co-founder and chief executive of software company Oracle Corp. and, according to Forbes, the fifth-wealthiest man in the world, worth $43 billion. He bought 97 percent of Lanai island a year ago from David Murdock and has planned a new hotel for the island, a second airport runway, the re-establishment of farming and a new supply of fresh water through desalinization.
In May, Ellison hired Paul Casey, Hawaiian Airlines president and CEO from 1997 to 2002 and former president of the Hawaii Visitors and Convention Bureau, as Island Air’s CEO in control of day-to-day operations. That certainly foreshadowed bigger things to come for Island Air. In a statement Thursday, Casey said Island Air is "committed to building a strong regional airline" in engaging the purchase of go! from Mesa.
Island Air, which started in 1980 to fly between Kauai’s Princeville resort and Honolulu, now operates 224 flights a week between Oahu, Maui, Molokai, Lanai and Kauai. Since Ellison’s purchase, it has indicated it will increase service to all major islands and replace its small fleet of 37-seat turboprop planes with 65-seat turboprops. Go! operates five 50-seat jets serving interisland destinations similar to those of Island Air.
In contrast, Hawaiian operates a fleet of more than 40 aircraft, providing not only 160 interisland flights daily but Hawaii nonstop flights to and from 11 mainland cities. It also provides service from Japan, South Korea, the Philippines, Australia, New Zealand, American Samoa and Tahiti, to include Taiwan and Beijing within a year, with eyes on Europe.
But as Hawaiian has focused its sights outward, Hawaii residents have felt increasingly curbed in traveling interisland by higher airfares.
No one wants ridiculously cheap fares to come at the expense of future airline bankruptcies. But it should not be too much to expect that someday soon, more flights will be offered between neighbor islands at more reasonable prices — while maintaining airlines’ stability.
