ridgid727
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 12:56 am

HNLPointShoot wrote:
Looks like there's a real possibility that the end of WP will happen sooner rather than later. WP had an agreement with the lessor to defer lease payments that was amended as recently as Sept. 15. The lessor apparently sent their repo people after WP allegedly breached the amended agreement earlier this month. From today's Star-Advertiser:

The crux of the bankruptcy hinges on a leasing dispute between Island Air and Elix. The aircraft lessor said it is entitled to take back the airplanes after Island Air defaulted on $4.58 million in payments and failed to satisfy conditions under a deferral agreement. . . .

Elix said after Island Air failed to remedy its payment defaults, the lessor attempted to accommodate Island Air by entering into a lease payment deferral and amendment agreement on Sept. 15 as well as other transactions to provide the necessary liquidity to the airline.


Another bankruptcy court hearing has been set for Friday morning.




Not sure how that Friday morning proceeding went, as nothing has been posted, however in that article, the judge said he was going to keep WP on a short leash. This could spell the end for WP sooner rather than later.
 
77H
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 1:01 am

WPvsMW wrote:
mcg wrote:
One thing we know for sure is that being the #2 interisland airline is losing proposition.


Not true. There were periods in which AQ had more market share and net profit than HA, in particular when AQ went all-jet and HA was mostly props. See Peter Forman's Wings of Paradise.

IMO, the take-away is that any state-wide competitor to HA will have to match HA turbofan for turbofan. The only viable strategy for WP is an HNL/OGG shuttle.


While I disagree that WP needs turbofans to compete with HA I do agree WP needs more planes in order to fly a bulkier schedule. They do not and frankly cannot match HA on schedule which I firmly believe is the reason they a struggling. The catch 22 is that as long as they continue to struggle they are not in a position to buy more planes and climb out of the hole.

Not one person on here who has made the claim that airline A is uncompetitive against airline B because A flies plane X and B flies plane Y has been able to present any consumer data that backs the assertion.

77H
 
WPvsMW
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 2:57 am

HA's Convairs were uncompetitive against AQ's 732s. HA got DC-9s to stay competitive.

I think that, and Mid-Pacific's YS-11 experience, shows that props are a niche market, not a statewide market, in the Islands. KOA and LIH on a turboprop... WP couldn't make it work, even announcing ITO during their 17th quarter of losses. If PacifiCap could start over again, CS100s would be the fleet choice.

Could MW and Makani Kai Air survive without MKK, MEU, HNM, serving airports HA doesn't serve ... I don't think so.
 
F9Animal
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 4:10 am

This is just so sad for the people of Hawaii, and it's employees. I think they bit off more than they could chew by the bipolar aircraft switching game. Did Ellingson sell It? I take it all the ATR's are gone already? I don't get it. I'm sure they could pick up some ATR's for really low prices.

I suspect there was some pretty poor money management going on there. That operation should be golden, and money making. I bet Mokulele will jump on the opportunity if this airline shuts down.

I hope for a miracle of course. I really like this little airline. One of the few that still employs it's own for the most part. I also can't see how they can maintain their schedule with 2 planes gone.
I Am A Different Animal!!
 
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usxguy
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 5:11 am

The ATRs were *part* of the problem at Island Air - they were far from reliable. Add in Ellison's ego with LNY, yet HA/Ohana really captured that market quickly with their newer and more reliable ATR 42-500s.

I think this is a case of too little, too late. September begins the softer travel period until March. Q400s should have been brought on earlier.
xx
 
nz2
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 6:53 am

That is a shame to hear. We flew them last week HNL/KOA and returned only last Sunday. We gave them a go to avoid the TSA queues and of course the price. We found them to be fantastic, zero queue for TSA at HNL which our main concern with a tight connection, on time departure and arrival and friendly, comfortable service.
 
HNLPointShoot
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 7:45 am

Won't have details from bankruptcy court until the Saturday Star-Ad lands tomorrow morning, but they did run an update today that mentions that WP's leadership hasn't officially acknowledged their fleet is down to 3 Q400s.

Island Air executives declined this week to disclose the number of aircraft remaining in its fleet. But on Thursday the chief commercial officer for Island Air’s main competitor, Hawaiian Airlines, said Island Air is operating with just three airplanes.

. . .

“There were some close-in cancellations late in August that were announced for September, and so they trimmed the schedule back a little bit in September and then subsequently have done that a little bit from October and November,” [HA CCO Peter] Ingram said. “It looks to us to be about three lines of flying that are flying right now.”

Phone calls and emails to Island Air CEO David Uchiyama and his bankruptcy attorney, Ted Pettit, were not returned Thursday. An email sent to Island Air majority owner Jeffrey Au also was not returned.


Further down the article, an anonymous WP employee stated that two of the planes were withdrawn from service and are no longer in Hawaii (which anyone who's been following this thread already knows.) Another anonymous source ("An airline industry executive with knowledge of the situation") stated that WP was also delinquent on the lease payments for those two planes, and they were returned after that lessor refused to approve a new repayment plan.

Just more signs that WP will be joining its former parent company soon. :worried:
 
Xtremespeed01
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 8:47 am

Looks like WP Q400 N685WP and N684WP are back in Canada for the past week. Its in YYZ.
 
Bazooka
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 4:08 pm

Aloha Air Cargo has been operating 737-300's inter-island for the past 3 years. The reason Aloha Airlines got rid of the 300's was because the 300's were newer at the time and the overhaul of the CFM's were over $1M every time vs the JT8D engines on the 737-200's. The FAA had strict requirements on the engine being new at the time i.e. cycles on the the engine before it had to come off the airplane. Now, I believe because its been proven reliable, 1980's till now, the restrictions are more relaxed and the engines are dime a dozen. Southwest??? HA's 717's engines are in the same boat. They are no different than the CFMs. They require a 3 minute cool down period too.
 
MO11
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 7:39 pm

Xtremespeed01 wrote:
Looks like WP Q400 N685WP and N684WP are back in Canada for the past week. Its in YYZ.


They left several weeks ago, flew to Muskoka where they were painted white, then ferried to YYZ. Rumor is that those two were maintenance pigs.
 
WPvsMW
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 10:03 pm

Bazooka wrote:
HA's 717's engines are in the same boat. They are no different than the CFMs. They require a 3 minute cool down period too.


The issue is not cool-down after landing, but cool-down after takeoff. Required cool-down after landing varies by how much reverse thrust was used, and can be 1 minute if no reverse thrust was used.
http://www.pprune.org/tech-log/276907-c ... -time.html
http://www.b737.org.uk/cfm56_soi.htm

Cool-down after take-off is very different, and specifically whether 8 min. or so at FL220 (if that high) HNL/OGG is enough to thermostabilize the hot core on repeated turns. It's not. KH flies a cargo sked that avoids the cumulative effects that caused AQ to drop the 733 and revert to 732s.

The BR715 engines in HA's 712s are more like the JT8Ds... but I've heard that hot start events in the 712s are not ... rare.
 
Bazooka
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 10:26 pm

Then SW 733s should climb to 11k to OGG and 12k from OGG instead of 15k and 16k.
 
maxudaskin
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Re: Island Air files for Chapter 11 bankruptcy

Sat Oct 21, 2017 11:20 pm

Slash787 wrote:
I thought the Q400 would have been a game changer for them


They probably would have, but it's too late. The pot of water may put out the fire when it's just the chair, but it won't do much if anything when you're entire room is on fire.
 
WPvsMW
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 1:17 am

Bazooka wrote:
Then SW 733s should climb to 11k to OGG and 12k from OGG instead of 15k and 16k.


The heat from take-off is the issue. There's a trade-off between higher altitude/colder air vs. lower altitude/warmer air, so altitude can be considered a wash, but not residual heat from take-off. Restated, the issue is "how much time at cruise and associated cooling rate". The CFM56 core doesn't cool fast enough HNL/OGG. The BR715 does.

The CFM56 is probably OK on a 100+ nm segment, like HNL/ITO, but neither HA nor AQ operated separate fleets for one city-pair. This leads to my point that that the ONLY city-pair on which WP could be profitable is HNL/OGG, a shuttle service. IOW, the Q400 is a great design, but it's performance has limited application in the Hawaii market. It can't do short-field, and it can't compete with 712s... except HNL/OGG.
 
DeSpringbokke
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 2:22 am

So what I'm getting from this thread is if WP goes under, unless DL were to step in with some 717s which there is virtually no chance of happening, HAL would essentially have a complete monopoly over inter-island traffic? Note that I don't consider Mokulele a competitor.
 
MO11
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 3:03 am

Yup. And besides Aloha, look at the hit parade of inter-island carriers over the years:

go!
Mokulele (ERJ 170 operated by Shuttle America)
Mahalo Air
Mid-Pacific

With all of the mainland flights that go to LIH/OGG/KOA, the need for lots of inter-island service is diminished.
 
WPvsMW
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 3:08 am

DL and HA compete to buy every 712 in good condition that comes to market. I doubt that DL has any interest in moving 712s to Hawaii.

WN is the game changer for statewide service. As discussed in the big "WN 'announces' HI service" thread, WN can do tags (maybe even double tags) on CONUS segments using 738s... and avoid the cumulative hot core problem. Even with reduced frequency, WN's mainline frames would be the first real competitor to HA since AQ.
 
SXDFC
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 3:14 am

"Southwest just parked 67 B737-300s recently. It’s really a no brainer! Let them fly the friendly skies of the Hawaiian Islands..."

The WN -300s are gone for good, they wont be coming back. If they're flying the friendly skies of Hawaii,it wont be for WN.

"With reg. nos. ending in WN?"

None of the 717s registrations ended with WN.
 
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exFWAOONW
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 3:26 am

Who says they have to do a quick turn at every stop?
Is just me, or is flying not as much fun anymore?
 
HNLPointShoot
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 4:50 am

WP is holding on to the planes for now, but it's clear at this point that the bankruptcy stay is not going to protect them. From today's Star-Advertiser:

Attorney Thomas Kreller told federal Bankruptcy Judge Robert Faris on Friday that Island Air continues to operate the three leased Bombardier Q400s in violation of its leases.

“We believe our leases have been terminated,” Kreller said. “They were terminated (before the bankruptcy filing). We don’t believe (Island Air) is entitled to use them. The debtor disagrees with that and continues to use them. We will be taking action to try and prevent that. If the debtor is allowed to continue to use the airplanes into the future, then they need to both pay for them under the leases and provide adequate protection (collateral).”

Faris told Kreller, who was heard in court by telephone, that aircraft lessors have rights under the U.S. Bankruptcy Code to pursue the matter.

“They can do what they think is appropriate,” Faris said.


Despite that, it also sounds like they might hold off on repossessing the planes until WP releases additional financial information.

So, WP is still in business (for now.) Incidentally, would there happen to be anyone who lives near YYZ who could upload a couple shots of N684WP and N685WP?
 
Password
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 5:23 am

MO11 wrote:
Yup. And besides Aloha, look at the hit parade of inter-island carriers over the years:

go!
Mokulele (ERJ 170 operated by Shuttle America)
Mahalo Air
Mid-Pacific

With all of the mainland flights that go to LIH/OGG/KOA, the need for lots of inter-island service is diminished.


I wouldn't say that it has that big of an impact, many people who visit are often island hopping... if people are island hopping, then it doesn't necessarily matter that they're not starting at HNL anymore. Also, international travel seems to have picked up with the growth of HA over the years, meaning that for many international passengers, HNL is still the only airport in Hawaii with a direct flight, making inter-island travel still necessary under the assumption that they are island hopping.

Anyone have data on how many planes Aloha and Hawaiian were flying inter-island before go! airlines came in? IIRC HA had 12-14 planes flying inter-island before Aloha shut down, and now that number is up to 20 I believe. Not entirely sure how many Aloha was operating however.
 
Chemist
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 5:52 am

I could swear I saw a parked Island Air ATR in Camarillo (CMA), California today while I was flying GA in the area.
 
WPvsMW
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 7:36 am

Aircraft leases have their own section of the US Bankruptcy Code.
https://www.law.cornell.edu/uscode/text/11/1110
The Trustee in Bankruptcy essentially has 60 days from the date of order of relief (16 Oct. 2017, in the case of WP) to cure the default and have agreement for a continued lease... or the secured lessor gets the a/c back. I've never seen an a/c, frame, or pp lease that wasn't secured by the leased goods (and sometimes additional collateral).

So... we'll have the answer on or before 08 Jan. 2018.... unless the 60 day period is extended. WP has applied to be Debtor in Possession (act as Trustee), but until that motion to be DIP is granted, the U.S. Trustee is the TIB. You can follow the case in summary format here
https://www.pacermonitor.com/public/cas ... d_Air,_Inc
or the official site
http://www.pacer.gov
Case: Hawaii Bankruptcy Case No. 1:17-bk-01078
Downloading documents is fee-based.
 
Xtremespeed01
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 10:22 am

Chemist wrote:
I could swear I saw a parked Island Air ATR in Camarillo (CMA), California today while I was flying GA in the area.


You could be right. Some of WP's ATRs did go thru CMA on a ferrying flight back to BGR
 
Xtremespeed01
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 10:27 am

Password wrote:
MO11 wrote:
Yup. And besides Aloha, look at the hit parade of inter-island carriers over the years:

go!
Mokulele (ERJ 170 operated by Shuttle America)
Mahalo Air
Mid-Pacific

With all of the mainland flights that go to LIH/OGG/KOA, the need for lots of inter-island service is diminished.


I wouldn't say that it has that big of an impact, many people who visit are often island hopping... if people are island hopping, then it doesn't necessarily matter that they're not starting at HNL anymore. Also, international travel seems to have picked up with the growth of HA over the years, meaning that for many international passengers, HNL is still the only airport in Hawaii with a direct flight, making inter-island travel still necessary under the assumption that they are island hopping.

Anyone have data on how many planes Aloha and Hawaiian were flying inter-island before go! airlines came in? IIRC HA had 12-14 planes flying inter-island before Aloha shut down, and now that number is up to 20 I believe. Not entirely sure how many Aloha was operating however.



AQ had about 22 planes in their fleet at the time of their shutdown. They had 8 737-700, 1 737-800, and 13 737-200. And I believe HA did have what you've stated but after the shutdown of AQ, they did run 767 for interisland a bit to help out with moving people that was affected with the AQ shutdown.
 
ridgid727
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 1:22 pm

MO11 wrote:
Yup. And besides Aloha, look at the hit parade of inter-island carriers over the years:

go!
Mokulele (ERJ 170 operated by Shuttle America)
Mahalo Air
Mid-Pacific

With all of the mainland flights that go to LIH/OGG/KOA, the need for lots of inter-island service is diminished.


You left out Discovery Air with their 146's.

If anyone could make an interisland op work I believe it would be WN.
 
F9Animal
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 5:50 pm

What are the chances of Alaska jumping in and buying them? I think it would be a great opportunity. They have experience with the Q400, and offer a nice schedule into Hawaii.

I am surprised Hawaiian hasn't kicked some tires? I don't know. I just want them to survive. Yep, I am the guy who loves to see an airline beat the odds.
I Am A Different Animal!!
 
Password
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Re: Island Air files for Chapter 11 bankruptcy

Sun Oct 22, 2017 9:31 pm

F9Animal wrote:
What are the chances of Alaska jumping in and buying them? I think it would be a great opportunity. They have experience with the Q400, and offer a nice schedule into Hawaii.

I am surprised Hawaiian hasn't kicked some tires? I don't know. I just want them to survive. Yep, I am the guy who loves to see an airline beat the odds.


Couple of scenarios that could happen imo
Ohana grabs a few more ATRs (I see HA aquiring another 717 or so as more likely, although a small expansion of Ohana and HA would be possible as well)
HA finds another 717 or two
I like your idea of having AS buy island air, or possibly bringing horizon into Hawaii. Would be great for AS to be able to offer interisland connecting flights, it would basically make them the second coming of aloha at that point - sort of
WN flying interisland using triangle routes?
Wild card airline start-up/big3 carrier starting inter-island ops
 
nz2
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Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 2:49 am

We flew back to AKL yesterday from HNL, saw an Island Air plane taking off.....

I hope they survive because of the ease of using them via the commuter terminal, you save so much time not having to stand in the TSA line at the inter-island terminal, which will only get worse now..
 
77H
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Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 4:46 am

ridgid727 wrote:
MO11 wrote:
Yup. And besides Aloha, look at the hit parade of inter-island carriers over the years:

go!
Mokulele (ERJ 170 operated by Shuttle America)
Mahalo Air
Mid-Pacific

With all of the mainland flights that go to LIH/OGG/KOA, the need for lots of inter-island service is diminished.


You left out Discovery Air with their 146's.

If anyone could make an interisland op work I believe it would be WN.


I would argue anyone of the US3 or AS could make interisland Ops work as well or better than WN. For one, all 4 of the above airlines have exisiting brand recognition in the islands. UA has served Hawaii for 70 years as of this year and AS does a lot of advertising and sponsorship at/of local events.

The Interisland market is a lot different than Hawaii overseas flying. Brand recognition makes a difference to the residents living in Hawaii. As you note above, Hawaiians have seen a lot of airlines come and go and the impacts their departures have had. Having a long standing history serving the islands or being involved in local events goes a long way in this regard.

More than that, WN currently codeshares with no one. That means that passengers not coming to Hawaii on WN cannot connect to another island without buying a separate ticket. That means that WN would solely rely on O&D between each island. The higher density 737's they operate would be running between the islands without the added fill of connecting passengers. Almost every airline serving Hawaii codeshares with one of the interisland carriers. Unless WN changes their strategy i don't see it working well.

Additionally, AS+US3 have a wide variety of aircraft available to them to use which gives them the ability to right size capacity. Not every HA or WP flight is full. AS and the US3 would have the ability to serve off peak flights with smaller aircraft to better match capacity with demand.

The most important thing to note is that AS and the US3 do not operate Hawaii interisland for a reason. It's not as profitable as other routes they could use their aircraft on. History shows that the interisland market cannot support two or more large carriers indefinitely. The fare wars between AQ and HA almost put them under and that was before Go! came in. Go!'s entrance was the death blow at least to AQ. Not sure what magic WN would have that would magically allow the numbers to work for them but not AS or the US3. HA would defend their turf by lowering fares against WN. WN would likely leave the interisland market but not before doing damage to HA's bottom line. Sure the short term upside to interisland travelers would be cheap fares but at what cost long term?

In my opinion WP struggles because it cannot compete on schedule with HA on the trunk routes because it doesn't have enough planes. And because of its financial performance, is in no place to get more at this point. WP should have stay focused on the smaller markets like HNL/OGG-MKK, LNY and JHM instead of ceding those markets to HA with Ohana. MW seems to be doing alright because it's not trying to be something it's not, a direct competitor to HA.

77H
 
WPvsMW
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Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 8:37 am

Nice post, and I agree with your premises other than "That means that WN would solely rely on O&D between each island." WN would probably do tags and double tags, and sell round robin tickets. Arrive at KOA, then hop to OGG a few days later on a tag, then one or two more hops interisland before returning to CONUS.
 
INFINITI329
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Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 6:05 pm

I can see WN, AS or DL purchasing Island Air and operate it as a subsidiary. AS would probably be better suited given the ASL (Horizon) vast experience with Q400. I could see DL moving a few 717s to Hawaii once the C-Series comes online. HA needs some competition
 
superjeff
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Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 6:30 pm

Anyone have data on how many planes Aloha and Hawaiian were flying inter-island before go! airlines came in? IIRC HA had 12-14 planes flying inter-island before Aloha shut down, and now that number is up to 20 I believe. Not entirely sure how many Aloha was operating however.[/quote]

There is another factor. In Hawaii,, you can't just get into a car to drive to another island. You also can't rely on a boat (they tried a ferry a few years ago, but due to a number of factors (environmentalists and strong currents/waves in the Channels, etc.) it did't last. Locals use the airplane to go between the islands for business and personal reasons - even day trips. So just because there are now more flights directly from the Mainland to LIH, KOA, and OGG (and occasionally ITO) doesn't mean that there's no need for interisland. That's why Hawaiian makes money on its 717's and why Aloha had 13 722's in service.

I'm not an engineer or a technical guy, so I don't know how a 738, 73G, or 733 would do, but I do know that Aloha Air Cargo, if they're flying 733's interisland likely has longer turn times due to the simple fact that they're unloading/loading freight. I would think you're looking at closer to 1 hour minimum turn times as opposed to 30 minutes on Hawaiian's 717's.
 
32andBelow
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Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 7:15 pm

superjeff wrote:
Anyone have data on how many planes Aloha and Hawaiian were flying inter-island before go! airlines came in? IIRC HA had 12-14 planes flying inter-island before Aloha shut down, and now that number is up to 20 I believe. Not entirely sure how many Aloha was operating however.


There is another factor. In Hawaii,, you can't just get into a car to drive to another island. You also can't rely on a boat (they tried a ferry a few years ago, but due to a number of factors (environmentalists and strong currents/waves in the Channels, etc.) it did't last. Locals use the airplane to go between the islands for business and personal reasons - even day trips. So just because there are now more flights directly from the Mainland to LIH, KOA, and OGG (and occasionally ITO) doesn't mean that there's no need for interisland. That's why Hawaiian makes money on its 717's and why Aloha had 13 722's in service.

I'm not an engineer or a technical guy, so I don't know how a 738, 73G, or 733 would do, but I do know that Aloha Air Cargo, if they're flying 733's interisland likely has longer turn times due to the simple fact that they're unloading/loading freight. I would think you're looking at closer to 1 hour minimum turn times as opposed to 30 minutes on Hawaiian's 717's.[/quote]
Its crazy Hawaii doesn't have large scale rapid ferry available. Especially between the close islands.
 
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usxguy
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Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 7:19 pm

go! didn't have to try to hard to put Aloha out of business.

Problem in Hawai'i is that the marketplace gets complacent. There's no reason to try to compete or do things outside the box. People hate change, and figure its just how they've been doing things for years. Aloha was no stranger to this. The transpac flying was the first innovative thing they did in years, and that was only because they got good lease rates on the 737-700s and realized there's a market for some of the secondary cities to Hawai'i. Businesses don't try hard to compete for money, be it kama'aina or tourist. One reason there are no hotels around Pearl City or west of there (( except for the tourist joints at Ko Olina)) (and there SHOULD be, but that would require innovation) -- people feel like that the current market has everything taken care of, but let me tell you - if someone built a Fairfield Inn/Holiday Inn Express/Courtyard type hotel near Waipahu or Pearl City, the thing would be full EVERY NIGHT.

Back to interisland - everything was on 'autopilot' until go! disrupted it for the worse. HA/AQ had their own preferred vendors and fares didn't move much, it was already a 'monopoly' market despite there being 2 of them. lots of back-end cooperation on many fronts. That's one thing the Mesa execs saw when reviewing both airlines in bankruptcy, was the pure profits being made on interisland Hawai'i travel.

go! forced both airlines to abandon many of their 'regular' operations and drop fares and actually try to compete for business. go! could have made it work if JO did things a bit differently. go! just happened to be the final push over the edge.

Mokulele found out the hard way about brand awareness in Oahu with the 70 seaters. The company spent a LOT of money trying to get awareness of the brand outside of the core markets of the Big Island, Molokai & Maui, where Mokulele was well known. MW suffered from some of the same problems as Fly Glo, People Express, and others -- distribution. We were rushing to get all the e-ticket connectivity up, codeshares & interline, but we just ran out of time with the banks. Republic took over and shut down the jets, and remarkably the month they broke even. Mokulele has had 5 owners, the current one is doing quite the good job but it will be even harder to resist temptation to grow if WP goes the wayside, especially now that MW has the brand awareness on Oahu and the connectivity/distribution.
xx
 
hnl-jack
Posts: 275
Joined: Wed Mar 14, 2001 10:34 pm

Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 8:45 pm

According to the news this morning 10/23/17, Wells Fargo Bank has requested the bankruptcy court the right to reclaim the three remaining Q-400's, as Island Air is over $250,000 in the rears in payments. The hearing on the matter will be held this Friday. The prospects for Island Air to stay in business, unless another investor or buyer comes forward looks beak.
 
superjeff
Posts: 1297
Joined: Fri Feb 05, 2010 2:14 am

Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 8:50 pm

Its crazy Hawaii doesn't have large scale rapid ferry available. Especially between the close islands.[/quote]

There's more to it than just close Honolulu to Lihue, Kauai, or Kahului, Maui is about 102 miles or so. But the Molokai Channel (between Oahu and Molokai/Maui is pretty rough. They were able to operate to and from Maui for awhile, but never got approvals to operate to Kauai from Honolulu, and never got to the big island (about another 100 miles beyond Maui. so probably many people wouldn't take a ferry anyway (even though the "SuperFerry" was a high speed Catamaran).
 
hnl-jack
Posts: 275
Joined: Wed Mar 14, 2001 10:34 pm

Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 9:03 pm

INFINITI329 wrote:
I can see WN, AS or DL purchasing Island Air and operate it as a subsidiary. AS would probably be better suited given the ASL (Horizon) vast experience with Q400. I could see DL moving a few 717s to Hawaii once the C-Series comes online. HA needs some competition


AS would be the logical choice, however given the small fleet of Island Air Q-400's AS would need to make a considerable investment in the fleet and staff to be competitive. Even then given HA's considerable local following, membership in their rewards program, name, 24 717's, etc it would be very difficult, I believe, to achieve a market share in excess of 20%. Add to that, AS has a huge investment in Virgin America which is just starting to come together. I doubt they need a diversion from the bigger task at hand.
 
77H
Posts: 1534
Joined: Mon Sep 19, 2016 11:27 pm

Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 9:26 pm

usxguy wrote:
go! didn't have to try to hard to put Aloha out of business.

Problem in Hawai'i is that the marketplace gets complacent. There's no reason to try to compete or do things outside the box. People hate change, and figure its just how they've been doing things for years. Aloha was no stranger to this. The transpac flying was the first innovative thing they did in years, and that was only because they got good lease rates on the 737-700s and realized there's a market for some of the secondary cities to Hawai'i. Businesses don't try hard to compete for money, be it kama'aina or tourist. One reason there are no hotels around Pearl City or west of there (( except for the tourist joints at Ko Olina)) (and there SHOULD be, but that would require innovation) -- people feel like that the current market has everything taken care of, but let me tell you - if someone built a Fairfield Inn/Holiday Inn Express/Courtyard type hotel near Waipahu or Pearl City, the thing would be full EVERY NIGHT.

Back to interisland - everything was on 'autopilot' until go! disrupted it for the worse. HA/AQ had their own preferred vendors and fares didn't move much, it was already a 'monopoly' market despite there being 2 of them. lots of back-end cooperation on many fronts. That's one thing the Mesa execs saw when reviewing both airlines in bankruptcy, was the pure profits being made on interisland Hawai'i travel.

go! forced both airlines to abandon many of their 'regular' operations and drop fares and actually try to compete for business. go! could have made it work if JO did things a bit differently. go! just happened to be the final push over the edge.

Mokulele found out the hard way about brand awareness in Oahu with the 70 seaters. The company spent a LOT of money trying to get awareness of the brand outside of the core markets of the Big Island, Molokai & Maui, where Mokulele was well known. MW suffered from some of the same problems as Fly Glo, People Express, and others -- distribution. We were rushing to get all the e-ticket connectivity up, codeshares & interline, but we just ran out of time with the banks. Republic took over and shut down the jets, and remarkably the month they broke even. Mokulele has had 5 owners, the current one is doing quite the good job but it will be even harder to resist temptation to grow if WP goes the wayside, especially now that MW has the brand awareness on Oahu and the connectivity/distribution.


Here's a thought... a MW/WP tie up. Q400's for the trunk routes, C208s for the smaller markets. Then, the new company should pull an AS/B6 and attempt codeshares with every airline they can.

I'm no expert on either airline but it seems to me that MW offers locals and visitors access to markets HA and WP cant serve due to they're existing aircraft types. I think the issue with WP is it offers nothing proprietary to the market. It doesn't serve the smaller markets and doesn't serve the trunk routes as effectively. If WP were link with MW they would instantly cover the entire state and have a more unique network portfolio that may enable them to better compete with HA or at least become profitable. From the sound of it, MW management would probably need to be in charge.

77H
 
32andBelow
Posts: 4141
Joined: Mon Sep 03, 2012 2:54 am

Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 9:27 pm

AS makes no sense. They could just move some Qs and start the routes if that is what they wanted to do.
 
ridgid727
Posts: 1081
Joined: Thu Jul 24, 2008 1:58 am

Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 9:47 pm

32andBelow wrote:
AS makes no sense. They could just move some Qs and start the routes if that is what they wanted to do.


Exactly. If WP loses their aircraft what is left? AS could open stations fairly rapidly.
 
77H
Posts: 1534
Joined: Mon Sep 19, 2016 11:27 pm

Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 10:06 pm

Does anyone have insight on what WP's load factors have been from the time they made the switch to the Q's until this bankruptcy news broke? Not saying that LF automatically equals profitability or a return to profitability but my point is below.

I ask because I often hear from locals that we need another airline flying inter island to keep HA honest. While I agree with the sentiment, if we want a second airline (not counting MW as it does not compete on the same playing field) we have to support that second airline. Its one thing to say "we need WP to keep HA honest" and another to say "I'm going to fly/support WP to ensure they're around to keep HA honest". Unless WP Management is flushing money down the toilet over on Paiea St. I'm not sure I completely understand why WP continues to lose money if A) the market is truly large enough for two larger carriers B) if people really feel that having two larger carriers is important.

The population of Hawaii is estimated at 1.42M people. Lets call it 1.5M accounting for visitors at any given moment.

HA operates 20 712 aircraft each with 128 seats. I think I've read on here that HA operate 10-12 flights a day with their interisland aircraft. Average it at 11 flights a day per plane, thats 220 flights per day inter island. Multiply that by 128 seats and we get 28160 available seats throughout the state. I do not have access to the number of travelers flying inter island each day but is anyone confident its much higher than that? This again doesn't take into consideration MW or WP.

I find it hard to believe that if any of the US3 or AS thought there was money to be made flying inter island against HA they wouldn't have at least brought over some E170/5's ir CR7/9's to test it out. The late senator Inouye isn't around to bully UA or the like away from the market any longer which leads me to believe a second major player will struggle be it WP, WN or any other network carrier that has likely done the analysis and found it is not worth it.

The days of funneling people through HNL to the outer islands is over by and large. Back when this was the case, the inter island market could support AQ and HA. With more options to the outer islands, there doesn't seem to be a need, beyond "keeping HA honest". I think MW does well in the market because they are not attempting to compete with HA. WP is and is coming up short.

77H
 
User avatar
LAXintl
Posts: 24053
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Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 10:16 pm

You guys are nuts if you think AAG is going to come set up shop in Hawaii with QX Q400s. QX has enough current trouble with its flying with a whopping 10% if its fall schedule canceled to ship pilots off to Hawaii.
Also longer term, AAG is returning 15 Q400s to lessors in 2018.
From the desert to the sea, to all of Southern California
 
32andBelow
Posts: 4141
Joined: Mon Sep 03, 2012 2:54 am

Re: Island Air files for Chapter 11 bankruptcy

Mon Oct 23, 2017 10:39 pm

ridgid727 wrote:
32andBelow wrote:
AS makes no sense. They could just move some Qs and start the routes if that is what they wanted to do.


Exactly. If WP loses their aircraft what is left? AS could open stations fairly rapidly.

Agreed, AS has stations in all the major places already. They have to authority to fly any domestic route.
 
hnl-jack
Posts: 275
Joined: Wed Mar 14, 2001 10:34 pm

Re: Island Air files for Chapter 11 bankruptcy

Tue Oct 24, 2017 12:00 am

Prost wrote:
Maybe Delta should ship 5-10 717s to Hawai’i. It’d pretty much explode a few heads on this board.


The investment required to enter the inter-island market, people, facilities and a fleet large enough to effectively compete with HA's twenty four 717's would hardly worth the investment. As the AQ and HA battles in the past demonstrated, the margins are to thin to split the market. Besides, why would DL want to create such a blood bath, they don't need the feed for their Hawaii flights and the 717's can make more money elsewhere.
 
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usxguy
Posts: 1774
Joined: Wed Jan 25, 2006 1:28 pm

Re: Island Air files for Chapter 11 bankruptcy

Tue Oct 24, 2017 12:05 am

77H wrote:
Here's a thought... a MW/WP tie up. Q400's for the trunk routes, C208s for the smaller markets. Then, the new company should pull an AS/B6 and attempt codeshares with every airline they can.

I'm no expert on either airline but it seems to me that MW offers locals and visitors access to markets HA and WP cant serve due to they're existing aircraft types. I think the issue with WP is it offers nothing proprietary to the market. It doesn't serve the smaller markets and doesn't serve the trunk routes as effectively. If WP were link with MW they would instantly cover the entire state and have a more unique network portfolio that may enable them to better compete with HA or at least become profitable. From the sound of it, MW management would probably need to be in charge.

77H


The reason AS got cozy with MW to begin with, was because of the inter-island links. Other airlines would jump from HA in a heartbeat if they believed in the core product to compete effectively against HA. They were waiting to see how WP handled the transition to the Qs, because the ATRs almost destroyed everyone's goodwill due to the delays & cancellations. I'd think that a MW/WP tie up would be unbelievably successful if done right; WP unfortunately got some champagne tastes under the previous owner and not sure if those ended or not with the buyout of the lawyer in HNL or not. WP renovated the upstairs offices at the Airport Trade Center & turned them into the taj mahal, while Mokulele worked out of trailers at the Kona Airport with a small office downtown Kailua-Kona (compared to Mokulele's almost 2 floors at the Alakea Financial Center during the E170 days). I think the lower-cost mentality of MW + their relationships could be highly beneficial carried over to WP, who treated MW like a red headed step child; except that MW has been profitable since the day it separated from Mesa/go!.
Last edited by usxguy on Tue Oct 24, 2017 12:09 am, edited 1 time in total.
xx
 
hnl-jack
Posts: 275
Joined: Wed Mar 14, 2001 10:34 pm

Re: Island Air files for Chapter 11 bankruptcy

Tue Oct 24, 2017 12:07 am

Prost wrote:
Maybe Delta should ship 5-10 717s to Hawai’i. It’d pretty much explode a few heads on this board.


The investment required to enter the inter-island market, people, facilities and a fleet large enough to effectively compete with HA's twenty four 717's would hardly worth the investment. As the AQ and HA battles in the past demonstrated, the margins are to thin to split the market. Besides, why would DL want to create such a blood bath, they don't need the feed for their Hawaii flights and the 717's can make more money elsewhere.
 
User avatar
usxguy
Posts: 1774
Joined: Wed Jan 25, 2006 1:28 pm

Re: Island Air files for Chapter 11 bankruptcy

Tue Oct 24, 2017 12:20 am

it wouldn't be just Delta. It would include all of their Sky Team friends as well.
xx
 
WPvsMW
Posts: 2252
Joined: Thu Mar 23, 2017 7:30 pm

Re: Island Air files for Chapter 11 bankruptcy

Tue Oct 24, 2017 12:43 am

The hearing on 27 Oct 2017 to hear the remaining lessor's demand for return of the 3 remaining Qs means a deal for a continued lease of the Qs is not something the lessor (Wells Fargo) wants. Either (i) WP pays up (cures the default) by 08 Jan 2018 (unless the 60 day period is extended) AND the lessor agrees to a new lease or (ii) WP has no a/c. What assets does WP have that would induce another operator to buy WP assets or an ownership interest (which is mainly liabilities... look at the list of creditors in the case)?

Why haven't the US3 or AS put tags on their overseas segments to HI? Because the second carrier statewide was WP. If WP dissolves, look for UA to start tags with its revived interest in Hawaii, which will make WN late for the party. Who knows... AA or DL may jump at the tag and round-robin opportunity using NBs, but I think UA will get the aggressive jersey.
Last edited by WPvsMW on Tue Oct 24, 2017 12:46 am, edited 1 time in total.
 
Password
Posts: 25
Joined: Wed Sep 06, 2017 1:47 pm

Re: Island Air files for Chapter 11 bankruptcy

Tue Oct 24, 2017 12:44 am

77H wrote:
Does anyone have insight on what WP's load factors have been from the time they made the switch to the Q's until this bankruptcy news broke? Not saying that LF automatically equals profitability or a return to profitability but my point is below.

I ask because I often hear from locals that we need another airline flying inter island to keep HA honest. While I agree with the sentiment, if we want a second airline (not counting MW as it does not compete on the same playing field) we have to support that second airline. Its one thing to say "we need WP to keep HA honest" and another to say "I'm going to fly/support WP to ensure they're around to keep HA honest". Unless WP Management is flushing money down the toilet over on Paiea St. I'm not sure I completely understand why WP continues to lose money if A) the market is truly large enough for two larger carriers B) if people really feel that having two larger carriers is important.

The population of Hawaii is estimated at 1.42M people. Lets call it 1.5M accounting for visitors at any given moment.

HA operates 20 712 aircraft each with 128 seats. I think I've read on here that HA operate 10-12 flights a day with their interisland aircraft. Average it at 11 flights a day per plane, thats 220 flights per day inter island. Multiply that by 128 seats and we get 28160 available seats throughout the state. I do not have access to the number of travelers flying inter island each day but is anyone confident its much higher than that? This again doesn't take into consideration MW or WP.

I find it hard to believe that if any of the US3 or AS thought there was money to be made flying inter island against HA they wouldn't have at least brought over some E170/5's ir CR7/9's to test it out. The late senator Inouye isn't around to bully UA or the like away from the market any longer which leads me to believe a second major player will struggle be it WP, WN or any other network carrier that has likely done the analysis and found it is not worth it.

The days of funneling people through HNL to the outer islands is over by and large. Back when this was the case, the inter island market could support AQ and HA. With more options to the outer islands, there doesn't seem to be a need, beyond "keeping HA honest". I think MW does well in the market because they are not attempting to compete with HA. WP is and is coming up short.

77H


As someone who flys interisland about 5-10 times a year, I usually fly island air about 75% of the time because most of the time they are a few dollars cheaper, and I like the commuter terminal better. However the ATRs were horrible, and it was a pretty large sacrifice in comfort compared to Hawaiian. The 400's were a major improvement, however. On a side note, I flew HA last month from HNL-OGG and realized that HA downgraded their interior to cheaper/thinner seats (saw the same kind of seats on Allegiant, and WOW air), pretty disappointed that HA downgraded their seats.

I think the market is large enough for two airlines - how long did Aloha and HA co-exist for? 50 years?? Also, in terms of frequency the interisland routes are some of the busiest in the world (based on frequency). I think a lot of this is due to the fact that schedule is important for people travelling inter-island, especially the locals. I would bet on the over for your 28k seats per day interisland I think the market is larger than that.

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