Hawaii Island Air, Inc. (Island Air) announced on October 16, 2017 it is filing for Chapter 11 bankruptcy protection in an effort to continue normal operations while navigating through legal challenges recently presented by the lessors of its aircraft. The bankruptcy filing was caused by threats of legal action to ground the aircraft and strand hundreds of passengers. The filing prevents the threatened action and allows Island Air to continue interisland service for its customers.
The airline continued;
During the reorganization process, Island Air expects to fly its scheduled routes as normal and honor all previously purchased tickets and confirmed reservations. In addition, there will be no changes to the Island Miles frequent flyer and other customer service programs, including Kupuna & Keiki Saver Fare, Island Biz corporate travel program, and military and group travel programs.
On October 12, 2017, while in the process of negotiating its aircraft leases with its lessors, Island Air was very surprised that the lessors served them with notices of termination of the leases and demands to surrender its airplanes.
Prioritizing its customers, employees and the communities it serves, Island Air made the difficult decision to file for bankruptcy protection. Continuing to operate under the protection of the United States Bankruptcy Court will allow Island Air to maintain its service to its customers, provide continued employment to its more than 400 valued employees, and ensure a revenue stream so its vendors are paid.
“Island Air will continue to hold our customers and employees, as well as our invaluable vendors, as our main priorities during this reorganization process,” said David Uchiyama, Island Air president and CEO. “Once we have completed the reorganization process, Island Air expects to emerge as a stronger airline with a solid financial structure that will allow us to continue to meet the demands of Hawai‘i’s dynamic interisland market, while positioning us for future growth and expansion.”
Copyright Photo: Island Air (Hawaii) Bombardier DHC-8-402 (Q400) N682WP (msn 4546) HNL (Ivan K. Nishimura). Image: 939613.
As with all companies experiencing a growth in demand, there is an adjustment period. Island Air narrowed its 2017 first quarter loss while revenue continued to rise, making this the airline’s highest quarterly revenue since before 2013 when Island Air was required to begin reporting its financial data to the DOT due to the size of its aircraft. In the second quarter of 2017, the airline earned $12.5 million in revenues, its highest quarterly revenue in more than a decade. In the first quarter of 2017, Island Air flew 172,200 passengers (over double the previous quarter’s figure of 75,102). Additionally, Island Air has increased marketing in North America, Asia, Australia and New Zealand.
In January 2016, Hawai‘i-based investment company PacifiCap acquired controlling interest in Island Air from Ohana Airline Holdings, LLC (OAH), which is wholly owned by Oracle corporation founder Larry Ellison. Since that time the airline has been focused on improving operations, increasing efficiencies and elevating service to customers. This has included strategic investments in equipment and supplies, including upgrading its aircraft fleet, as well as expanding training and resources for employees. In addition, Island Air is currently modernizing its information technology system, which when fully implemented will enhance online reservation and bookings, expand digital services and improve interface with codeshare and interline airline partners.
Founded in 1980 as Princeville Airways, the company was renamed Island Air in 1992 and has been serving the Islands of Hawai‘i for 37 years. Island Air currently offers approximately
200 flights each week between O‘ahu, Maui, Kaua‘i and Hawai‘i Island, and employs more than 400 individuals throughout the State of Hawai‘i.
Island Air (Honolulu) is again a Bombardier DHC-8-402 (Q400) operator. The pictured DHC-8-402 (Q400) N681WP (msn 4543) was delivered on December 20, 2016. It is seen in Honolulu on December 29, 2016 in another new livery after its ferry flight from Oakland. The second Q400, registered as N682WP (msn 4546) was handed over on January 5, 2017.
As previously reported on March 31, 2014, Island Air placed a firm order for two Bombardier DHC-8-402 (Q400) NextGen turboprop airliners and also took options for four additional Q400 NextGen aircraft. The aircraft are being delivered with a dual-class, 71-seat configuration.
The airline took delivery of its first two Bombardier Q400s in 2006. However in September 2006 the airline announced that it was withdrawing the aircraft from its inter-island service the following month.
This new batch of Q400s will replace its older ATR 72-200s.
Island Air is Hawaii’s leading regional airline and second oldest carrier.
Copyright Photo: Island Air (Hawaii) Bombardier DHC-8-402 (Q400) N681WP (msn 4543) HNL (Ivan K. Nishimura). Image: 936494.
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The order will be posted on Boeing’s Orders and Deliveries website once all contingencies are cleared.
Copyright Photo: Ivan K. Nishimura/AirlinersGallery.com. Boeing 737-81B WL B-1916 (msn 41315) taxies through Honolulu on delivery.
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Read the full report:
Copyright Photo: Ivan K. Nishimura/AirlinersGallery.com. Boeing 737-8H6 9M-MLQ (msn 39327) passes through Honolulu on delivery in the 2010 livery.