Island air cancels aircraft orders - cuts service

[Bullwinkle]

"Island Air, the Hawaii interisland airline owned by Oracle Corp. co-founder Larry Ellison, will cut its workforce by 20 percent, close its operations on Kauai and cancel delivery of new aircraft in the short term as the airline works to reposition itself as the second largest airline in the Islands, the airline’s CEO said Thursday.
The Honolulu-based airline lost more than $21 million in 2014, Island Air CEO Dave Pflieger told employees and customers in a letter Thursday. A spokesperson for the airline said Pflieger also traveled to Kauai to discuss the changes with its employees.
That, “coupled with our inability to achieve the productivity and cost certainty we needed from our unions, demand that in the short-term we pursue an alternate course of action – a course that while disappointing today, we hope will pave the way for a brighter future for Island Air in the tomorrows that lie ahead,” Pflieger wrote"

more at;

http://www.bizjournals.com/pacific/news/...-cuts.html

[macuu222]

We need another major inter-island player to keep Hawaiian in it's place. Otherwise skies the limit with inter-island airfares!

[pahoated]

Haven't looked up the entire history but it seems these direct interisland airlines have always had a hard time in Hawaii. Kind of wondering if it isn't the aircraft difference. Hawaiian just uses 737 for interisland connecting. The direct interisland use turboprops. Turboprops are a lot more uncomfortable than a jet, and tend to take more buffeting, even if it is a cheaper flight. Island Air losing $14M last year, even with Ellison taking over ownership, must mean not enough passengers. Since the news is reporting increasing tourist numbers and people moving to the state, it seems to indicate islanders and tourists are preferring Honolulu as a hub if nonstops are unavailable, mainly for the comfort and speed of a jet, even at higher airfare.

"Aloha also means goodbye. Aloha!"

[terry.way]

Island air doesn't go to the Big Island at all. This won't really affect us.

But it will really affect Kauai: if they pull out of Lihue, only Hawaiian Airlines is left. The only other player is Mokulele, they can go everywhere EXCEPT Kauai: they have to be within gliding distance of land in their single-engine airplanes.

I find it funny that they're trying to blame the unions. Switching airplane types, training pilots on the new aircraft, then paying them to sit on the beach, abandoning lucrative lines like Kapalua and Kona, all these poor decisions, other airlines hiring pilots, mechanics, flight attendants like gangbusters, but NO they need concessions from their workers...

[leilanidude]

I don't believe they did a very good job marketing their routes or prices and they didn't have enough flights to choose from.
Turboprops are much cheaper to buy, maintain and operate than the jets Hawaiian Airlines uses so they should have been able to capitalize on the lower cost structure.

[terracore]

quote:

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Originally posted by terry.way


I find it funny that they're trying to blame the unions.

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Read between the lines. The union comment was a jab at Hawaiian. Hawaiian purchased a bunch of planes and created a new service called Ohana. Hawaiian leases those planes to Empire Airlines who supplies non-union pilots and flight crews and then leases those services back to "Ohana by Hawaiian". The "Ohana by Hawaiian"'s only existence is a non-union market grab carefully manipulated not to compete against their own company but at the same time make it too expensive for anybody else to enter the market. Ellison is smart enough to realize this and is shrinking his airline to only service his island. At least for now.

So long as Hawaiian is making an end-run around the unions with Empire Airlines crew, any full-union operation has little chance of entering this market. I'm surprised it took Ellison this long.