Hawaii's Island Air to phase out Dash 8s

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Hawaii-based Island Air plans to phase out its Bombardier Dash 8-100 fleet by the end of next year, replacing the aging aircraft with five ATR 42s and at least three ATR 72-500s.

Leslie Kaneshiro, Island Air chief executive, confirmed the details of the carrier's fleet renewal plan at the Regional Airline Association convention.

Island Air has signed agreements to begin taking delivery of three ATR 72s this year, beginning in July. Five more ATR 42s are scheduled to arrive in the fleet in 2013, with options for three more ATR 72s still on the table, she says.

The Dash 8-100s will be completely retired by the end of next year, Kaneshiro adds. A Saab 340 acquired under a wet least agreement also will be returned to the lessor when the term expires, she says.

The fleet renewal comes after several years of financial hardship that appears to be loosening.

Island Air was sold by now-defunct Aloha Air in 2004, then carved a niche for itself in the inter-island market by connecting tourists from its base in Honolulu to other islands.

In 2006, Island Air acquired a Bombardier Q400, but returned the aircraft to Bombardier six months later. That was the same time that Go!, a start-up low-cost carrier funded by Mesa Air Group, entered the market.

"Since then the company struggled" financially, Kaneshiro says.

But the withdrawal of Aloha Air and Go! from the competitive landscape in Hawaii has helped to restore competitive balance in the market, allowing yields to grow as the supply of capacity has dwindled.

Island Air will use the new capacity to return to markets it had abandoned a few years ago, she says.