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Island Air Shutdown Gives Hawaiian Airlines A Monopoly, But For How Long?

Island Air ATR 72-212 on finals at Kahului Airport. Photo Konstantin von Wedelstaedt - http://www.airliners.net/photo/Island-Air/ATR-ATR-72-212/2694955/L/

Hawaii’s second largest airline shut down on November 10th. Island Air flew inter-island routes in Hawaii Island, Maui, Oahu and Kauai for the past 37 years but ceased operations as of midnight Friday. For the past four years, the airline has fallen short of revenue expectations. Island air management says that a dispute with aircraft lessors led to the Chapter 11 bankruptcy filing in October which culminated in Friday’s shutdown. The carrier had added new Bombardier Q400 turboprops to its lineup in September but the leasing company attempted to repossess three of those planes last month.

Passengers should inquire about refunds from their credit card companies, according to the Island Air website. Island Air President David Uchiyama says, “Island Air has taken every measure possible to avoid this tremendous hardship to its passengers.” Hawaiian Airlines will honor tickets from passengers with existing reservations on a standby basis next week.

IslandAir Shutdown Could Make Interisland Ops Slightly More Attractive For Southwest

The shutdown puts more than 400 people out of work and leaves Hawaiian as the only airline offering inter-island routes…at least for now. The development could potentially mean more fertile ground for Southwest to launch inter-island service. Andrew Watterson, Southwest Executive Vice President and Chief Revenue Officer told Hawaii News Now last month before the shutdown, “On the mainland, we’re known for short flights, quick turn around times. The inter-island market does lend itself to that.”

A new Southwest Airlines 737-8MAX. Photo: Southwest Airlines

At the Daniel K. Inouye International Airport, passenger Travis Peters from Hilo told HNN, “Inter-island would be awesome because it’s just another competitor for Hawaiian Airlines.” Low fares from Southwest seem to generally appeal to most Hawaiians who say cheaper airline tickets would mean being able to travel to see friends and family more often.

Southwest started the ball rolling on October 11, when they announced the launch of new service from the mainland to Hawaii. Passengers will be able to buy tickets beginning in 2018. Before the flights actually start, however, the airline has to get FAA approval for Extended Twin Operations (ETOPS) which is a certification that allows flight operations over the ocean between the mainland and Hawaii. ETOPs requires additional equipment and special training for flight crews. It can take more than a year to get approval. ETOPS approval is not the only thing that could slow down Southwest’s planned Hawaii expansion. The mechanics union may rain on the parade.

Southwest’s Mechanics Union, Other Challenges Could Throw Wrench Into Plans For Hawaiian Service

Aircraft Mechanics Fraternal Association National Director Bret Oestreich says the union is filing legal action. He says, “Southwest Airlines has the lowest ratio of mechanics to aircraft of any major carrier. Now, the carrier wants to expand its service over open waters without accepting direct responsibility for the airworthiness of its aircraft. Not only is this irresponsible, but it is a direct violation of our contract, and we are not going to allow it to happen.” The union is threatening a cease and desist order that will “stop Southwest dead in its tracks.”

A commitment to use Southwest mechanics to perform ETOPS checks within the 48 contiguous states in exchange for the right to use vendors on the island has been submitted. The only problem is that, according to AMFA, they never signed off on the proposal. Oestreich commented, “if Southwest wants to fly safely to Hawaii, it has to operate within the existing contractual limitations. It is time for Southwest to accept greater responsibility for maintaining its own aircraft.”

Southwest will also have to take a long hard look at its fleet. Aloha Airlines used to fly 737-200s until their collapse in 2008. The 737-200s were ideally suited for quick turns without engine cooling. But today, the more modern Next Generation and 737 MAXs are not ideal for quick turns in Hawaii because the engines do not have enough time to cool the core at cruise.

Aloha operated the 737-200 for their interisland operations. They ceased service in 2008. Photo by Aero Icarus from Zürich, Switzerland [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
In spite of the adversity from the mechanics union and other postential challenges, Southwest is uniquely positioned to launch interisland service.  They have a brand awareness and the proven track record of providing short haul service. In the wake of an Island Air shutdown, commencing inter-island flights becomes a slightly more attractive proposition.

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Written by Kim Clarke

Kim Clarke is a Freelance Writer and Editor, specializing in the aviation industry and financial markets. She freelances for McGraw-Hill Financial, Avgeekery, Skydiving.com, USAHotAirBalloons and more. Past journalism experience includes Thomson Financial, CNN and Clear Channel Communications.