Mokulele Hires Republic for Interisland Flying in Hawai’i

I wrote about this on BNET last week when it was still a rumor. Now it’s been confirmed that Republic will operate Embraer 170s within Hawai’i for Mokulele. This seems like a smart move, and it will put some pressure on go!. Mokulele Begins Embraer 170 Service in Hawai'i[/caption]In fact, I’m tempted to refer to this as “go! Away Airlines.”

Here’s the plan. Republic will take up to four 70 seat Embraer 170s and operate them for little Mokulele Airlines in a traditional regional airline-style fixed fee agreement. Two of those aircraft will arrive in time for flights to begin between Honolulu and both Lihue and Kona in mid-November. I’m somewhat surprised to not see Kahului (Maui) on the list, but maybe we’ll see that when the other two aircraft join the fleet in March. Or maybe since that’s the most competitive market in the Islands, they’re going to play a game of wait and see. Either way, they’ll need to enter that route eventually if they want to be a serious player.

Unlike the all-coach airplanes that Republic will be flying for Midwest, these will actually have 6 First Class seats and 64 in coach. Republic spokesperson Warren Wilkinson confirmed that these were aircraft that had been operating for Delta Connection, but now that Delta has up-gauged to Embraer 175s, these aircraft needed a new home.

The one thing about this deal that makes it a bit more non-traditional is that Republic will actually open a line of credit for Mokulele worth $8 million. It’s unclear whether Mokulele will need to tap this line of credit, but if they do, Republic will have the right to turn it into an equity stake in the airline.

You might think the name Mokulele sounds familiar. I’ve written about them once before when they began flying as go! Express. Yes, that’s Mesa-owned go!, the very same airline with which Mokulele will now be competing. What’s the chance they continue to fly as go! Express for very long? Just about none. In fact, Mesa CEO Jonathan Ornstein was quoted as saying “he’s disappointed in Mokulele and says he does not plan to continue a partnership with a competitor.”

go! must be livid because this does not bode well for them. Economically, the 170s are better planes to fly between the Islands. So, go! is going to have a tough time competing on seat costs. Just when it thought capacity had rationalized with Aloha’s disappearance, this new operation comes along to make life more difficult again.

For Mokulele and Republic, I think this is a smart move. Mokulele enables Republic to fly planes under a local brand name, and we saw how much backlash their was against go! for being from the mainland. Besides, Republic has stayed away from being a marketing carrier in general, and they likely are not looking to build up the infrastructure required for things like marketing and revenue management. This partnership is good for both airlines. There also seems to be broad local and political support for this venture, especially since they are promising to put many ex-Aloha employees back to work.

In short, this is the right airplane for the market, and Republic had some planes it needed to get flying again. This is a very creative way to put those planes to work in a venture that I think has a decent chance for success.


16 Responses to Mokulele Hires Republic for Interisland Flying in Hawai’i

  1. Mark says:

    Karma at last. Mesa predatorily (is that a word?) priced Aloha out of business. Now, an airline with a better plan and product is going to slice their throat. The RJs never made sense to me. I will still fly Hawaiian, but at least now the islands will have an alternate offering, locally owned for their visitors that they can be proud of.

    As a side-note and just to confirm your assertion that this is the correct aircraft, ALOHA was seriously looking at the 190 as their replacement aircraft. I miss Aloha, but they still live on as a cargo airline with beautiful new livery: http://www.alohaaircargo.com/

  2. yo says:

    Hey JO, how do you like them apples?

    Someone is gunning for you now! I wish the best for Mokelele, its a much better plane for there, (though I love the 717).

    And, if Mokelele plays it right, they can further paint Go! as the non-hawaiian run company and woo the locals.

  3. Jake says:

    That a way to stick it to JO, Mokulele. What comes around, goes around.

  4. Zack Rules says:

    Hawaii would be a great market for an ultra low cost carrier with an easyJet/Ryanair like business model. Short distances, great weather and high traffic volume makes it perfect. Buying a 737-700 or A319 and cramming 149/150 seats inside along with checked bag fees and ads on every surface, a well funded carrier could really make a go of it.

  5. DanTravels says:

    I’ve heard good things about the E-Jets elsewhere, but haven’t gotten to actually try them. If Mokulele adds service to OGG and ITO, it’ll give me a good chance.

  6. dctravel says:

    This is an ignorant question, but how do they get these aircraft to the islands?

  7. David SF east bay says:

    dctrave……they remove the seats and add temporary extra fuel tanks in the passenger cabin to get the aircraft to Hawaii.

  8. Axel Sarkissian says:

    CF? i havent seen any new posts and you havent replied to comments lately.

  9. Cranky,

    When do you expect them to start operating the Sukhoi Superjet 100 on these routes ….. more fuel efficient (so they say) and more roomy inside :0)

    Steven Frischling
    Founder
    The Travel Strategist
    Web: http://www.thetravelstrategist.com
    Blog: http://www.flyingwithfish.com

  10. CF says:

    Mark – That is a nice new livery, but I’m sad to see the old bird of paradise disappear.

    Zack – I agree that the short stage length means that you could probably run an effective no frills airline. Just keep those planes in the air as much as possible. But I tend to think the 737/A320 series are a bit too big for the market. The Embraers are just right – maybe the 190s would be ideal as Mark says Aloha once looked at.

    dctravel – To further what David SF says, check out this link with an interior shot of what the Hawaiian 717s looked like to get them to the islands:
    http://www.airlinepilotforums.com/your-photos/31886-hawaiian-air-ferry-flight.html

    Axel – Oops, I forgot to push my BNET post live this morning. It’s up there now. But I posted yesterday, so I really didn’t miss much. Tough crowd! It’s been a busy couple days over here, but I’m doing my best.

    Steven – Something tells me we’re a LOOOONG ways away from seeing that. The Sukhoi is an interesting plane, and when it’s up and running we’ll really see what it can do. But it looks promising. The hard part is going to be getting the public to trust a Russian-built aircraft. They don’t know that Boeing has collaborated on it – all they’ll see is a Russian name and that’s going to be hard to overcome. But if the plane is that great, then someone will operate it. I believe an Italian airline has already said it’ll give it a shot. But Hawai’i . . . that’s gonna take awhile.

  11. CF:

    Icelandair has 20 Sukhoi Superjet 100 on order. ItAli Airlines, in Italy, has 10 on order as well.

    I agree that it will be Looooong time before we see them in North America, or really anywhere outside Russia. Even the Euro and MidEast airlines has seemingly turned away from what looks like a great option. With Boeing on-board with aircraft it seems like it should have had a warmer welcome by airlines.

    Steven Frischling
    Founder
    The Travel Strategist
    Web: http://www.thetravelstrategist.com
    Blog: http://www.flyingwithfish.com

  12. dctravel says:

    Thanks, that is really interesting. I always assumed the planes where shipped over on cargo vessels. Shows you that I had no clue.

  13. DRG says:

    Two words: Blood bath. I don’t believe there is room for more than two carriers in this market.

  14. Mark says:

    DRG. I agree 100% let’s hope the locals on the island support Mokulele. I saw many locals flying GO! (shame on them). I guess the rest is in the marketing. The Ejets are such superior aircraft to RJs, that it’s hard to believe that given a choice, your average interslaind tourist wouldn’t opt for the Mokulele product.

    CF: I REALLY miss the Bird. Hands down the most beutiful livery in the air (IMHO). In fact, I was in HNL about a month ago and had my picture taken in front of one of the old 737-200s. Have you seen the new Aloha Air Cargo Livery? Also, note that the butterfly on the tail of the Mokulele Ejet is actually the logo of the Kapalua resort. There must be some sort of marketing partnership there.

  15. Mark says:

    DRG. I agree 100% let’s hope the locals on the island support Mokulele. I saw many locals flying GO! (shame on them). I guess the rest is in the marketing. The Ejets are such superior aircraft to RJs, that it’s hard to believe that given a choice, your average inter-island tourist wouldn’t opt for the Mokulele product.

    CF: I REALLY miss the Bird. Hands down the most beautiful livery in the air (IMHO). In fact, I was in HNL about a month ago and had my picture taken in front of one of the old 737-200s. Have you seen the new Aloha Air Cargo Livery? Also, note that the butterfly on the tail of the Mokulele Ejet is actually the logo of the Kapalua resort. There must be some sort of marketing partnership there.

  16. Curly Sue says:

    As most of you seem to be concentrating on more technical issues, I would like to add something a little different to the mix. Go! sucks, and they should change their name to Stay!. My husband and I were in Hawaii last year and made the biggest mistake by booking all out inter island travel through Go! airlines. We spent much of our vacation at the different airports waiting for Go! to well…go! On one of our flights from Kauai to the Big Island, we left Kauai about an hour and a half late (not bad for Go!), and then from Honolulu to the Big Island we waited for 6 hours! (About average delay on Go!) That was our last leg of the trip. On our way back from Big Island to HNL for our flight back to the mainland, we had scheduled a relatively early flight compared to our flight back home wasn’t until 10pm. We wanted to spend some time in Waikiki before heading home and grab some dinner there before our flight…We waited at Hilo from 1pm until 6pm when we finally decided if we didn’t catch another airline we would miss our flight home. So we went and had to purchase two additional tickets on Hawaiian Airlines (whcih by the way, the weather for them seemed to be just fine!) in order to barely make it back to HNL in time for our flight home. If anyone is thinking of flying Go! rethink it!

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