Mokulele Says Silver Threatened the Airline if It Started Flights in Florida, So It Didn’t

Mokulele

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.

Silver Alligator Eats Mokulele

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]

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14 comments on “Mokulele Says Silver Threatened the Airline if It Started Flights in Florida, So It Didn’t

  1. mokulele would be better served staying in hawaii and improving it’s on-time reliability aand developing a 2 engine acft ops. caravans may be new and comfortable and cheap to operate but passengers should know that the outcome of an engine failure is not very good. I flew twin -otters for years…and the PT-6 engine is superb if not the best turboprop…but I did have 2 landings on 1 engine.

  2. Sounds like someone thought they were Donald Trump for a second when they made that threat.

    Seems to me if they can hold their own in Hawaii against Hawaiian, they could hold up against Silver. Was Mokulele going to fly under their name which no one outside of Hawaii can pronounce?

    1. I don’t think it’s that difficult for Mokulele to compete with Hawaiian. Hawaiian focuses on the core markets (Honolulu, Kahului, Hilo, Kona, Lihue), while Mokulele focuses on the smaller markets, some of which like Kapalua (West Maui) can’t physically handle the ATR42 (the airport was built for the Dash 7 but was able to accommodate the Dash 8-100; the runway is too short for the ATR).

      1. David M – Actually Hawaiian tells me that the ATR is going to be able to go in there, probably with a weight restriction but one that they can live with. Last I heard they were working on a variety of issues before it could happen, but they expected it to happen sometime.

  3. This reminds me, if memory serves it is about time for the annual EAS roundup. Wonder if Mokulele is interested in bidding on EAS routes.

  4. Nothing about Silver would ever surprise me!

    Some of you may be regular readers of Airlinepilotforums.com/regional and know of the wonderful threads there by people involved with Silver…people who may or man not really exist., but interesting, to say the least.

    If you follow the EAS world and comments of local communities about the quality of service provided by Silver, you…well, surely must chuckle. Some of the traveler’s stories, true? The Saab340, is it really that…well, whatever.

    The arrangement between Silver and UA? Silver markets routes under the 3M code, not a UA code-share. What is this arrangement?

    Perhaps Nate could write “The Silver Story,” or “The Little Airlines of South Florida, the Strange Saga of This Wacko Market.”

    1. Well I did have a blog for a little while, EAS Flights. It did get some negative attention from the owner of 1 airline and it just wasn’t worth the drama, so as I got busier with Mokulele and other clients (I’m allowed to do consulting work on the side), the blog just kinda faded away.

      Brett never wanted there to be cross posts between the two, so with the blog gone, who knows… I could definitely write about the Florida business starting with Chalks and ending up today… there’s so many interesting things about South Florida airlines… such as the fight in Marsh Harbour between Aaliyah and her pilot – she refused to separate from her cosmetics and clothes & demanded they fly with her… and of course her plane crashed because it was overweight. She and crew had flown out to Abaco to shoot a music video. Or about the Chalks crash where the wing fell off, then the lack of support/guidance from the FAA.

      Re: 3M/UA: When it was 3M/CO, Gulfstream/Silver was limited to the # of flights they could operate since they relied on CO/UA for the res system; so they became independent. The requirements to be an “Express” carrier vs codeshare are much much different.

      1. Nate,

        Thanks for your comments. I, too, enjoyed your blog.

        Must be hundreds, uh, tens, maybe twos, who would have the insight, and the time, and the Cranky-like thick skin to write a “fair and balanced” daily, whatever, EAS blog about this fascinating (to a few, I guess) subject…carriers, communities, airport operators, DOT, friend and foe in Congress, even us EAS airline travelers.

        I am amazed how well a Cranky can pull off what he does as well as he does, negative attention and inside drama we readers have no clue about, aside. Thanks to you, again.

        1. Thanks for the notes. It just became a struggle as Mokulele had never ventured into the EAS world except for one route; then the owner wanted me to start scoping out some markets; it then became a huge conflict of interest.

          that’s one thing I’ve learned from working with Brett – you ALWAYS must keep a clear line of division and always be up front.

          So it was nearly impossible to write a “fair and balanced” blog about Essential Air Service when some of the bidders were clients or even my own bid.

          Brett has always had an interest in what I’d write about, so maybe you’ll see more guest posts show up about EAS or smaller airlines.

  5. Silver acting like they own those markets, hah!

    Silver Airways hardly need Mokulele’s help to lose money.

    Mokulele is small enough to be scared of its own shadow but Silver hardly has the muscle to be a threat to anyone but themselves.

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