Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
User avatar
KanaHawaii
Topic Author
Posts: 187
Joined: Thu Apr 07, 2016 9:43 pm

Insight on the failure of Island Air

Wed Dec 06, 2017 9:31 pm

This morning, a on-line news source in Hawaii - Civil Beat - featured a article by Mr. Victor Craft, former employee of Island Air. His insight of what happened with some of the machinations of the airline did foretell some of the reasons why for the airlines eventual failure. I think anytime you have someone who worked "in the operation" especially at his level, it provides an insight on why certain airlines make it and certain one's don't

http://www.civilbeat.org/2017/12/whats- ... in-hawaii/
 
Varsity1
Posts: 2248
Joined: Mon May 02, 2016 4:55 am

Re: Insight on the failure of Island Air

Wed Dec 06, 2017 9:48 pm

Alaska running tag on's or QX with Q400's is Hawaii's best chance and a true viable HA competitor.
 
txjim
Posts: 267
Joined: Fri May 16, 2008 1:44 pm

Re: Insight on the failure of Island Air

Wed Dec 06, 2017 9:57 pm

From the article:

What may have caused its demise were three significant events: 1) a three-time change in ownership inside of five years; 2) transitioning from one type of aircraft to another and then back again; and 3) bringing in off-island talent to run it.


It would have been helpful if the author bothered to identify the issues caused by #3.
 
catiii
Posts: 3681
Joined: Mon Mar 31, 2008 1:18 am

Re: Insight on the failure of Island Air

Wed Dec 06, 2017 10:02 pm

Meanwhile HA does ok, and is run by "off-island" talent.
 
hnl-jack
Posts: 276
Joined: Wed Mar 14, 2001 10:34 pm

Re: Insight on the failure of Island Air

Wed Dec 06, 2017 10:24 pm

HA hardly has "off island" talent. Yes, Mark Dunkerly is British, but came to HA with considerable airline experience. He was also smart enough to understand the value in this market to be perceived as local and surrounded himself with highly competent local management. His skills and vision combined with his quick understanding of the quirks of the Hawai'i market was just the right formula for the success HA has been able to achieve. Sorry to see him leaving, but I'm confident that he wouldn't if he didn't have the team in place to continue his legacy. Mark may not have been born in Hawai'i, but he quickly became and outstanding local in the community.
 
ScottB
Posts: 7191
Joined: Fri Jul 28, 2000 1:25 am

Re: Insight on the failure of Island Air

Wed Dec 06, 2017 10:25 pm

txjim wrote:
It would have been helpful if the author bothered to identify the issues caused by #3.


I think the author ultimately loses virtually all credibility with the following:

What is needed in Hawaii is a reliable airline run by locals and by enthusiasts. It needs to have a focus on serving the people of Hawaii and not just on profit.

Of course, profit is important, but it should not be the primary goal of the airline. Once that airline establishes a reputation for reliability and affordability, people will flock (pardon the pun) to fly on it.


Enthusiasts? If enthusiasts were running the airline, they'd be running A380s every 30 minutes between HNL, OGG, LIH, KOA, and ITO.

Profit isn't just important; it's critical. Without profit the airline eventually stops flying like Island Air.

And while it's important to have local people on the team to understand the market and be sensitive to local cultural issues, it's really not critical to have locals running the airline. Off-island people who are willing to listen to team members with insight into the market can succeed.

But in the end, the real reason why a viable competitor is unlikely to materialize in the Hawai'i interisland market is the strength of incumbency enjoyed by HA -- unless HA management totally screws up and lets costs get out of control. In order to compete with HA, a new entrant has to offer at least a reasonably competitive schedule and they have to do so at lower fares than HA in order to pry people away from the loyalty program and superior schedule. Even if people complain about HA's fares, they'll keep booking them if it gets them a free flight to LAS. The amount of money one would have to invest to build a new competitor and eat losses while building the business would almost certainly outweigh the potential profits which could be realized in the interisland market with HA as a competitor.
 
User avatar
jaybird
Posts: 415
Joined: Mon Mar 19, 2001 4:23 am

Re: Insight on the failure of Island Air

Wed Dec 06, 2017 11:11 pm

Sorry - run by enthusiasts and not just for profit? What a bunch of bull.
The problem with IslandAir has been at the top - they could never decide what type of airline they wanted to be. You want to be a niche and complement Hawaiian or you want to go head-to-head? Whatever you do - make up your mind! I understand the issue with the Dash 8s but they were perfect for the market. But how many times did they have to keep changing equipment? How many times did they go on a route then pull out? The focus on Lanai was crazy - yeah, Ellison owned the island and wanted to service his 2 hotels. There was more service to the island than 200 rooms warranted.

Hawaiian's fares, in my opinion, aren't out of line. You can find good fares if you plan ahead and you're flexible. Like any other airline. People lament about the $25 fare days - that's insane. That's giving away the house. Hawaiian runs a very good, reliable operation. I don't think competition is "needed" to keep them honest. If they have competition, fine - if not, fine. I think overall Hawaiian does good at combining what's best for Hawaii in the unique market we have, and what's best for their company.

Having said all that - I am sorry for everyone who lost their jobs at IslandAir. And this morning it came out that the company had stopped paying medical premiums before filing a Chapter 7 - so everyone has lost their medical and the chance to go with a Cobra plan. That really sucks.
 
joeycapps
Posts: 115
Joined: Tue Jul 15, 2008 5:24 am

Re: Insight on the failure of Island Air

Wed Dec 06, 2017 11:13 pm

I'd like to preface this by saying this is just my opinion, and I carry a high respect for Hawaiians, both Native and otherwise.

From the article:
The public was convinced many years ago that propeller-driven aircraft were a thing of the past and jets were the only way to go.

I find that a little difficult to swallow. Most people, I imagine, book based on one (maybe two) things: Fares and timetables. Is the flight affordable, and does it operate around the time I need it? I know this to be especially true among Hawaiians to travel to/from Honolulu for business, appointments, etc. Sometimes all they need is a day trip. I'm aware of the business market and/or frequent flyer market, but I don't think how many DL SkyMiles you have matters when you're traveling from HNL-OGG; likewise, you don't necessarily need a lie-flat seat. HA has the advantage here with their milage program (and discounted kama aina prices), but so did Island Air IIRC.

I imagine a great deal of the consumer market doesn't know (or maybe even care) what they fly on, as long as they got there. A Saab 340 or E120 isn't at the gate waiting, its a very modern looking (albeit propeller-driven) aircraft. The only time my non-av friends seem to take notice of an aircraft type is when there's an accident (ex: The Malaysia accidents and AF447). I'm willing to bet most consumers wouldn't know a "B717" from "ATR42" when looking at their front-end booking screen. Keep in mind, we have to take off the rose colored aviation glasses, and put ourselves in the position of Joe Public.

From the article:
What is needed in Hawaii is a reliable airline run by locals and by enthusiasts. It needs to have a focus on serving the people of Hawaii and not just on profit.

No. Corporate hiring is based on qualifications, not where you were born. Lest everyone forget that the apparent saving grace for HA came from the UK. A consultant or board member who is local is a great idea, but the bus needs to be driven by someone who knows how to do it. There may very well be qualified, local folks who could run the airline, but they didn't raise their hand or get sought-out for the position, so that's a moot point.

From the article:
Of course, profit is important, but it should not be the primary goal of the airline.

Behind safety, profitability SHOULD be the primary goal of an airlines. There are no 501(c) airlines running around (that I'm aware of) and until that day comes, an airline's obligation should be to the safety of its passengers/crew, and making sure that they can sustain survival (and/or growth) in their market. This isn't a favorite fact among a few avgeeks, but it's the reality of operating a business.

There are very valid points in the article, however... Switching your airline's fleet multiple times just doesn't make sense. Assessing your markets and comparing them to your aircraft's abilities is (what one would imagine) a very crucial step before deciding on a fleet type. Not sure what the training costs are on the smaller props, but from a business standpoint, it's an error that could have been figured out the first time around with enough research.

ScottB wrote:
Enthusiasts? If enthusiasts were running the airline, they'd be running A380s every 30 minutes between HNL, OGG, LIH, KOA, and ITO.

That about sums it up.

From my experiences in the local Hawaiian market, I can honestly say that I've noticed their preference of supporting local vs outsiders, and rightfully so. However, with such a high cost of living in the islands among other factors, I'm sure that a fair share of those traveling locals will ultimately choose the path that affects their pockets less, much like any other person that has to maintain a household budget.
 
User avatar
jaybird
Posts: 415
Joined: Mon Mar 19, 2001 4:23 am

Re: Insight on the failure of Island Air

Wed Dec 06, 2017 11:29 pm

For Hawaii - interisland flying is our interisland highway. It's a vital link for the state. Frequency is very important. For business people - knowing that if they finish up early - they can go to the airport and standby for an earlier flight. And having your luggage travel with you - always - is important. When the hold is too small to carry the luggage and other items people are checking in - that ticks people off.
 
User avatar
usxguy
Posts: 1902
Joined: Wed Jan 25, 2006 1:28 pm

Re: Insight on the failure of Island Air

Thu Dec 07, 2017 8:04 am

Someone needs to tell this former Island Air employee that the company never had ATR 42s...
xx
 
77H
Posts: 1571
Joined: Mon Sep 19, 2016 11:27 pm

Re: Insight on the failure of Island Air

Thu Dec 07, 2017 8:30 am

hnl-jack wrote:
HA hardly has "off island" talent. Yes, Mark Dunkerly is British, but came to HA with considerable airline experience. He was also smart enough to understand the value in this market to be perceived as local and surrounded himself with highly competent local management. His skills and vision combined with his quick understanding of the quirks of the Hawai'i market was just the right formula for the success HA has been able to achieve. Sorry to see him leaving, but I'm confident that he wouldn't if he didn't have the team in place to continue his legacy. Mark may not have been born in Hawai'i, but he quickly became and outstanding local in the community.


Ummm, respectfully, I beg to differ..... go to the Starbucks Coffee on Paiea Street any weekday morning. The place is filled with HA HQ employees. You'll quickly see just how "local" HA's HQ staff is. Most of these employees fall under M&A, meaning they are decision makers or influence decision makers. There are plenty of local, talented employees within higher levels of company but let's not kid our selves into thinking that HA is run by locals save one British CEO.

All of that said, I do agree with you that bringing people on who understand the unique aspects of the Hawaii market is important. But, as you've said of Mr. Dunkerley, he came from the outside and was willing to learn the unique nature of the market. As long as you're willing to understand and embrace the fact that not all that works in the elsewheres of the world will work here, you can be successful.

77H

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos