Interisland carrier Mokulele Airlines, threatened by a would-be rival when it attempted to offer service within Florida, is instead branching out to California.
Hawaii’s third-largest airline, which operates nine-seat Cessna Grand Caravan turboprops, said Tuesday it will begin daily flights between Imperial County Airport near El Centro, Calif., and Los Angeles on May 23.
CEO Ron Hansen said the airline was awarded a two-year Essential Air Service contract worth $2.44 million a year. EAS is a federally subsidized program designed to guarantee commercial service to small, underserved communities.
“California is the closest area that we feel we can take care of in the West Coast of the U.S.,” Hansen said. “We’re looking for opportunities on the West Coast. We know there’s a lot of communities looking for service that have been dropped by the largest airlines, and they’re not necessarily government subsidized, either.”
The Kona-based carrier currently has an EAS contract that pays it $1.76 million over a four-year period for providing service between Waimea on Hawaii island and Kahului.
Mokulele will fill a void left by Portland, Ore.-based carrier SeaPort Airlines, which ceased service in January in five California cities, including Imperial, as well as destinations in Kansas, Missouri and Baja California in Mexico because of what it cited as a shortage of airline pilots. SeaPort Airlines was operating with Cessna Grand Caravans. Former SeaPort President and CEO Rob McKinney joined Mokulele as president Feb. 1, and SeaPort filed for Chapter 11 reorganization bankruptcy Feb. 5.
The expansion to California follows an aborted attempt to begin service in Florida and, subsequently, the Bahamas. In July Mokulele announced it would begin offering daily flights in November 2015 between four cities in Florida — Tampa/St. Petersburg, Fort Myers, West Palm Beach and Key West — with future service planned this year for the Bahamas.
But those plans were dropped when Fort Lauderdale, Fla.-based Silver Airways, which operates 34-seat Saab 340B Plus turboprop aircraft, threatened to flood the market with additional flights and cheap fares and put Mokulele out of business in Florida.
“The chairman of Silver (Matthew Ray) basically made a phone call and told me right off the bat that we’re going to end up in a mess,” Hansen said. “He said if we entered the market they would flood the market with flights and lower fares, and I don’t want to get into those kinds of situations even though it might be worth the risk. It can be remedied but it can be very costly, so we decided not to enter the market at this point. Those routes were all part of Silver’s network, so we just decided not to do anything in Florida.”
Silver Airways did not respond to an emailed request for comment.
Mokulele, which offers more than 120 daily flights between nine airports on Oahu, Maui, Molokai and Hawaii island, now has 16 planes in its fleet — up from the four it had when Hansen purchased the airline in November 2011 from go! parent Mesa Air Group Inc.
For the time being, Hansen said he’s not planning any additional Hawaii expansion.
“I think we’ll stay with what we have,” Hansen said. “Our overall load factors (percentage of seats filled) in our system are good, and we don’t see the need to expand. The Caravan has got limitations on what we can do. It’s not a good long-haul airplane, so we’ll continue to focus on the small markets in the smaller communities.”
Mokulele, which on July 1, 2014, became the first commercial carrier to offer flights out of Kalaeloa Airport in West Oahu, said the experiment there is “doing OK.”
“It’s doing better than a year ago but not as good as we thought it would be doing,” Hansen said. “We fly from there to Molokai, Maui and connect to the Big Island. There’s still a lot of people on Oahu who don’t know we fly out of there.”