Here’s yet another tale in Hawaii’s never ending saga of inter-island transportation. Less than one year ago we were excited to see a new and local player, Mokulele Airlines, enter the prior duopoly of Hawaiian Airlines and Mesa Airlines’ Go!.
Low Airfares drove Mokulele’s financial problems.
So much has occurred in such a short time span. First we’ve been blessed with the lowest inter-island airfares in years. They’ve gone as low as $3, and have regularly been in the $30’s to low $40’s.
By February, however, Mokulele ran out of money. As a result, they were subsequently acquired (89%) by partner and aircraft provider Republic Airlines.
What might happen next at Mokulele.
Now, Avondale Partners analyst Bob McAdoo believes that Mokulele will likely be shuttered in the very near future. While thus far denied by Mokulele, statements by Avondale and Mokulele CEO Scott Durgin make it appear that Mokulele Airlines will either:
- Go out of business entirely; or
- Change to different aircraft. That would likely be a downsize to more market appropriate, older, 50-seat Embraer 145 jets. Republic has acknowledged considering this.
Pressing issues at Republic (Mokulele’s parent).
- Republic has bigger fish to fry than Mokulele. In fact whales would be a more approriate term. In July Republic acquired Midwest Airlines and just last month won a bankruptcy auction to acquire Frontier Airlines.
- They apparently have need of Mokulele’s three jets in their mainland operations.
- Mokulele has continued to lose money since it entered the Hawaii market. There seems no way for three carriers to make money on inter-island service. This problem has been exacerbated by our still ailing economy.
If Mokulele folds entirely.
We would see an immediate return to significantly higher airfares. I expect that they would soon double, with base fares of $80 to $90, and much more for desirable, busy or holiday times.
For every good reason, let’s hope that Republic sees fit to stick around here in Hawaii.
Note: We have no reason to believe that Mokulele’s Cessna-based services would be impacted if Republic decides to terminate its jet service.
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I had booked a flight for my wife and I (on Mokulele) for this upcoming November. After reading this post I immediately called Mokulele and was informed that if I cancelled my tickets, I would be charged a $25 cancellation fee per ticket. I was also told that the balance would not be credited to my credit card; rather, I would get a travel voucher good for 1 year.
After hearing these options, I told the sales rep that I was trying to cancel my tickets because I had heard that Mokulele might go out of business (I did not mention this website as my source). The sales rep reassured me that this was just a “rumor.”
I’m crossing my fingers that it is just a rumor but just in case I plan to look at flights via Hawaiian (of course I’ll check the cancellation policy before I book any back up tickets).
Hi Mike,
I’m not surprised. What else can Mokulele do? As long as you charged on credit card (and likely if you did not), you should be fine. We don’t even know what is going to happen. Perhaps Mokulele hasn’t yet decided what to do themselves.
We certainly like Mokulele, and are sad to see these developments.
Aloha, Jeff
So glad I saw this…I was about to book KOA-HNL-LIH on Mokulele for Sept 20th…
Hi Daniel and Mike,
Somehow I don’t think they’d fold that fast, but then again, in this industry and today’s economy, who knows.
If tickets are purchased with a credit card, there’s likely no problem. As big as Republic is, somehow I think they would arrange to have tickets honored by the other carriers anyway.
Aloha and thanks for writing,
Jeff
Could they fold before November comes, or can they widthstand the storm? What would happen if they fold with our flights booked with them?