Honolulu-based interisland carrier Island Air announced on Thursday that they will stop operations on November 11th. This decision was made after the airline, also known as Hawaii Island Air Inc., filed for Chapter 11 bankruptcy protection in October due to threats of legal action from their aircraft lessors. The airline will ground all flights after Friday. Island Air currently runs over 400 flights every week between Oahu, Maui, Kauai, and Hawaii Island. Passengers with bookings for November 11th or later are advised to make alternative travel arrangements, as stated in the announcement of the shutdown.
As of Thursday evening, reservations were no longer being accepted on the Island Air website. Instead, a message thanking passengers for their support was displayed, and customers were directed to contact their credit card company for refunds. The company’s aircraft lessors have taken action to ground and repossess their fleet, and Island Air was unable to secure new investments or loans to continue operations during the reorganization process, according to their statement.
Hawaiian Airlines has responded quickly to the closure of Island Air by offering assistance to ticket holders of their former rival. Those who had flights booked with Island Air from Saturday to next Friday can standby for coach class seating on Hawaiian flights between Honolulu and Oahu, Maui, Kona, Hawaii Island, or Kauai. Alternatively, Island Air ticket holders can purchase tickets for $71 each way for confirmed bookings on Hawaiian flights during the coming week.
“Island Air has done everything possible to prevent this major inconvenience for our passengers,” said David Uchiyama, President and CEO of Island Air, in the press release. “We are grateful for the support and loyalty shown by our customers, management, employees, and vendors during this bankruptcy process.” Island Air has undergone multiple changes in ownership, service adjustments, and reorganizations since 2013. In February 2016, the airline was purchased by PacifiCap LLC from Ohana Airline Holdings, a company owned by Oracle CEO Larry Ellison.
In 2017, Island Air announced a significant expansion, resulting in a 44% increase in operating expenses in the first quarter compared to 2016, while doubling revenue. However, the company continued to operate at a loss. In the second quarter of 2017, Island Air had a loss of $8.2 million, their largest loss since the final quarter of 2014. According to data from the U.S. Department of Transportation, the airline has been operating at a loss for 17 consecutive quarters.
“The news of Island Air’s closure is truly unfortunate, especially for the 400 employees whose families relied on the airline for their livelihood,” said George D. Szigeti, President and CEO of the Hawaii Tourism Authority, in a statement. “With Hawaii’s strong economy, we are hopeful that they will find new opportunities to continue their careers in the travel industry or other local industries.”
Be First to Comment