Airline Receives Millions In Fed Subsidy Amid Odd Circumstances

In another big development this week, Mokulele Airlines, an interisland Hawaii airline, is still facing significant flight disruptions following the grounding of part of its fleet due to a routine maintenance inspection. We heard from someone on Molokai today who has waited nearly a week to get off the island by the time this is hopefully over.

Updated 8/21: We have been told that effective Thursday, Mokulele should be fully operational.

It’s interesting that Larry Ellison is the owner of 98% of Lanai, and yet, he has not stepped in to help out in this way.

Now the announcement that the airline will receive about $8M in awarded federal subsidies by the U.S. Department of Transportation (DOT) to provide essential air service (EAS) to the island of Lanai over the next two years. This development highlights the critical role Mokulele continues to play in connecting Hawaii’s smaller islands while also raising concerns about the airline’s operational reliability.

Hawaiian Airlines’ subsidiary “Ohana” previously provided service.

Hawaiian Airlines previously terminated its cessation of “Ohana by Hawaiian” service, which also included passenger flights between Honolulu both to Molokai and Lanai. The decision followed a severe decline in travel demand during Covid, as well as high costs and logistical challenges of restarting the service as key reasons for the termination.

Federal Subsidies for Essential Air Service to 98% Larry Ellison owned island.

The U.S. DOT awarded Mokulele an annual subsidy of approximately $4 million for each of the next two years, ensuring consistent airline service to Lanai.

The predominantly privately owned island suffers limited transportation options. With the federal funding, Mokulele will be able to operate more than sixty weekly flights to both Honolulu and Maui. This is the first time in forty years that there has been EAS supported flights to and from Lanai.

Operational disruptions and impact.

Despite the federal support, Mokulele Airlines continues to face scrutiny for its recent operational challenges. The grounding of planes, following the discovery of discrepancies in landing gear service documents, has resulted in significant disruptions to the airline’s schedule and its passengers who include residents and visitors traveling to and from Molokai and Lanai. Residents rely heavily on these flights for medical and other appointments for services not available in their rural medical systems.

Reports continue about passengers being stranded and still waiting for flights to resume. Mokulele has been trying to be sensitive to the situation and specific needs of travelers although that hasn’t done much to reduce the strain of the current outage.

Community concerns and USDOT accountability measures.

The lack of reliability of the airline has been something particularly upsetting to the communities that Mokulele serves. The U.S. DOT is aware of both the need for Mokulele’s continued service and the many complaints that have preceded the award.

USDOT will require additional monthly performance reporting from Mokulele as a component of enhanced oversight of the carrier due to its acceptance as an EAS airline.

Looking ahead at Mokulele’s federal money and scrutiny.

The combination of new subsidies and additional scrutiny underscores the airline’s importance in maintaining island flights. Hopefully the airline can soon restore full service and regain the community trust.

We welcome your input!

Beat of Hawaii photo taken at three sisters off Lanai.