BREAKING: Island Air to Shut Down After 37 Years

November 9, 2017, 4:08 PM HST · Updated November 10, 11:44 AM
Wendy Osher · 54 Comments
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Hawaii Island Air, Inc. (Island Air) announced today it will be closing operations as of 12:01 a.m. Saturday, Nov. 11, 2017. Island Air will end it’s 37 year history with it’s final flight #449 departing from Kahului Airport at 10:14 p.m., Friday, Nov. 10.  The final flight is scheduled to arrive at the Daniel K Inouye International Airport in Honolulu at 10:49 p.m.

Island Air Q400. Courtesy photo.

“Island Air has taken every measure possible to avoid this tremendous hardship to its passengers,” said David Uchiyama, Island Air president and CEO. “Island Air appreciates the loyalty and support its customers, management, employees, and vendors have shown the airline, especially during the last few weeks of this bankruptcy process. Island Air is proud of its 37-year history of service to the State of Hawaiʻi.”

Island Air has more than 400 employees and has been servicing the Islands of Hawai‘i for 37 years. Founded in 1980 as Princeville Airways, the company was renamed Island Air in 1992.

As a result of the announcement, all Island Air passengers are being advised that they must make alternative arrangements for interisland transportation, effective this Saturday, Nov. 11, 2017.  Island Air had announced in October that it was “forced to file for Chapter 11 bankruptcy protection in an effort to continue operations following threats of legal action by the Lessors of Island Air’s aircraft to ground and repossess the company’s fleet.”

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A thank you letter posted to the company’s website, shortly after 4 p.m. today stated:

“Thank you for your support We are no longer accepting new reservations at Island Air and will cease operations at end of day on November 10, 2017. For inquiries on refunds, please contact your credit card company. We apologize for any inconvenience this may have caused. For any questions or concerns, please call 1 (800) 652-6541.”

Competitor, Hawaiian Airlines is also stepping up to the plate saying it will honor Island Air tickets.  In a statement issued this afternoon, Hawaiian Airlines representatives said the airline is working quickly to provide flight relief for travelers who have been displaced by the shutdown of Island Air operations.

“Starting Nov. 11 through 17, Island Air guests holding a confirmed reservation to/from/via Honolulu, Oʻahu (HNL); Kahului, Maui (OGG); Kona, Hawai‘i Island (KOA); and Līhu‘e, Kaua‘i (LIH) can standby for Coach Class seating on Hawaiian’s regularly scheduled flights between the same origin and destination cities on the ticketed day of departure.”

Island Air today stated that it was unable to locate a new investor or lender to provide funding to support airline flight operations and a successful reorganization.

Company representatives said, “One of the difficulties of attracting new investors was the aggressive legal attacks by Lessors Wells Fargo Bank Northwest, N.A. and Elix 8 Ltd. Although Lessors’ Motion for Temporary Restraining Order was denied by Judge Robert Faris of the District of Hawaiʻi Bankruptcy Court on Friday, November 3, Lessors continued to engage in multi-directional legal attacks which Island Air could no longer combat without additional financing.  The aircraft Lessors were seeking termination of all leases and immediate repossession of all aircraft.”

According to the company website, Island Air was certified to fly it’s fleet of ATR-72’s in February of 2013. The same year, the company was purchased by Oracle founder Larry Ellison’s company, ‘Ohana Airline Holdings. Recent information indicates that the airline offered 448 flights each week between O‘ahu, Maui, Kaua‘i and Hawai‘i Island.

On Oct. 16, 2017, Hawaii Island Air, Inc. (Island Air) announced that it was filing for Chapter 11 bankruptcy protection.  At the time, the company issued a press release saying the filing was done in an effort to continue normal operations “while navigating through legal challenges recently presented by the lessors of its aircraft.”

Company representatives said the bankruptcy filing was caused by threats of legal action to ground the aircraft and strand hundreds of passengers. On October 12, 2017, while in the process of negotiating its aircraft leases with its lessors, airline representatives claim Island Air “was very surprised that the lessors served them with notices of termination of the leases and demands to surrender its airplanes.”

A press release last month indicated that the filing would prevent the threatened action and allow Island Air to continue interisland service for its customers.

During the reorganization process, Island Air had anticipated flying its scheduled routes as normal and honor all previously purchased tickets and confirmed reservations, however today’s announcement changes that prospect.

Ross Higashi, Hawaiʻi Department of Transportation Deputy Director, Airports Division responded to today’s news saying:

“Hawaiʻi has enjoyed the Island Air service which has delivered residents and visitors across the state for the past 37 years. We were notified today that the airline will make its last scheduled flight tomorrow night. HDOT will work with Island Air on the logistics of ceasing its operations at Hawaii’s airports.”

Governor David Ige also provided the following statement:

“I want to thank Island Air for its decades of service to our communities. For 37 years the company and its employees have played a big role in connecting island families and supporting our business community. The closure will have a tremendous effect on 400 employees and their families, and the state will be working with Island Air to help the employees apply for unemployment insurance and provide assistance with job searches and training opportunities.”

Below are some highlights from the history of Island Air (details provided by Island Air archives/website):

1980: Island Air first took off in 1980, under the name of Princeville Airways, with two DHC-6 Twin Otter aircraft providing scheduled service between Honolulu and Kauaʻi’s Princeville airport. Service was gradually extended to small community destinations on other islands, and by early 1987, the fleet had grown to eight planes.

1987: In May 1987, Aloha Airlines’ parent company, Aloha Airgroup, purchased Princeville Airways and renamed it Aloha Island Air. More flights were added to the daily schedule to meet the growing demand for air service to Hawaii’s resort destinations.

1995: In 1995, the newly named Island Air received FAA certification to operate larger aircraft. In April of that year, Island Air took delivery of its first 37-seat Dash 8, ushering in a new era of service.

2004: In May of 2004 a sale was completed between Aloha Airgroup and Gavarnie Holding, LLC, making Island Air Hawaiʻi’s third independent airline.

2006: In March 2006, Island Air acquired larger aircraft and expanded its routes to six of Hawaii’s major airports, with direct and nonstop service between five islands in Hawaiʻi.

2010: In 2010, Island Air celebrated its 30th Anniversary as Hawaiʻi’s second oldest carrier.

2013: In February 2013, Island Air was certified to fly it’s fleet of ATR-72’s. The same year, the company was purchased by Oracle founder Larry Ellison’s company, Ohana Airline Holdings, LLC. 

Wendy Osher
Wendy Osher leads the Maui Now news team. She is also the news voice of parent company, Pacific Media Group, having served nearly 20 years as News Director for the company’s six Maui radio stations.

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