And now for something completely different… I’m a sucker for an airline brawl, and here’s one that hasn’t gotten much press yet, probably because it’s between two little airlines in a far corner of the country. But this one has the potential to get nasty, and not in a “fun strategic fight” way. It’s more like nasty in a “it’s time for depositions” way.
Tiny Mokulele flies its fleet of 9-seat Cessna Grand Caravan’s in paradise. With go!’s disappearance, Island Air’s shrinkage, and Pacific Wings’s implosion, Mokulele is really the number two airline in Hawai’i these days. But that’s apparently not enough, because Mokulele decided the time was right to take its talents to South Beach. Ok, it’s not really South Beach, but Mokulele did plan on starting flights in Florida this month.
The plan was effectively to emulate what Cape Air did before it pulled out of the market two years ago. Mokulele was going to fly multiple daily flights from Key West to Ft Myers and St Pete. (It was going to complete the triangle with flights between Ft Myers and St Pete as well.) The airline also planned to expand into West Palm Beach.
These may not seem like huge markets, but at least a couple of them are big enough to support flights on bigger airplanes today. Silver flies Key West to Ft Myers once daily and from Key West to Tampa (not St Pete, but close enough) thrice daily (at least at this time of year). Silver also flies Tampa to West Palm twice a day during the week. These are all on 34-seat Saab 340s.
Presumably, Mokulele must have thought that multiple flights on a 9-seat aircraft versus fewer flights on a 34-seat aircraft would be really attractive to people in the area. At least, that worked for Cape Air for awhile. Perhaps more importantly, Silver was running a downright terrible operation earlier this year. It has gotten much better since the airline pruned its growth ambitions, but I can still see how a small operator like Mokulele might see opportunity.
Unlike most of the world, I had been watching this one develop. It’s not because I love Florida (I do not); rather it’s because one of the guys behind this Florida plan for Mokulele is Nate Vallier. Nate not only works for Mokulele, but he’s also done concierge work for Cranky Concierge for years. He’s even been an occasional contributor to the blog as well. He had told me about the Florida service when the airline’s intentions to start became public, so I kept my eyes open. We didn’t talk about this much (I prefer to keep things separate when people are doing concierge work), but things seemed to be moving forward. Then Mokulele abruptly canceled plans.
What the heck happened? Well, details started to come out publicly last week. The Florida Keys Keynoter reported that Mokulele had “temporarily grounded plans” to start its Florida operation. Then a couple days later, the Keys News published an article saying that Matthew Ray, Silver’s former chairman of the board, threatened Mokulele’s owner Ron Hansen (unfortunately behind a paywall).
What did he say? Well, Nate was quoted in the article as saying that Matthew told Ron “he would put us out of business by flooding the market with flights and cheap fares if we ever landed a single plane in Florida.” That’s some old-school stuff right there. It’s hard to imagine anyone in this industry being that blatant and direct in a threat (most airlines are smart enough to opt for much more veiled, vague threats). Then again, Matthew Ray isn’t from this industry. He’s a private equity guy whose firm, Victory Park, bought Silver in 2011. He went straight on to the board when that happened.
Is this going to turn into headline-grabbing national news? Eh, probably not. It’s not like Ron was recording the conversation, so if it ever made it to court it would be a “he said, she said” thing. You wanna guess what Silver said? In the Key News article, a Silver spokesperson denied everything. (I reached out yesterday to get more info but did not hear back.) You can imagine where this goes… nowhere. Only the lawyers get rich if this goes to the courts. As the old sports saying goes, let’s settle this on the [air]field instead.
It’ll be interesting to see if this is indeed just a temporary grounding and Mokulele decides it wants to compete. If it does, it won’t be going up against Matthew Ray. He apparently just resigned from the board (no word on why). According to his LinkedIn profile, he just left Victory Park in September as well. Maybe with Matthew gone, Mokulele will give its Florida operation a shot again. Or maybe it’s decided there’s been enough drama down in America’s wang.
I’ll keep you posted if this gets more interesting.
[Original alligator photo via Shutterstock]
