Mesa CEO questions Hawaiian rival’s profitability

Washington DC
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Mesa Air chief executive Jonathan Ornstein believes the carrier's Hawaiian rival Moukulele will be challenged in achieving profitability in its inter-island operations.

Mokulele in addition to flying Cessna caravans in a codeshare pact with Mesa subsidiary go! also offers Embraer E-170s on inter-island routes operated by go!. Mesa plans to end its codeshare pact with Mokulele at the end of April.

Shuttle America operates the Embraer aircraft through a deal Shuttle's parent Republic Airways Holdings negotiated with Mokulele in late 2008 to operate four E-170s on the routes. Mokulele launched the operation with two aircraft. In addition, Republic supplied Mokulele with an $8 million line of credit.

Ornstein in his latest update to employees says load factors from November and December on the Shuttle flights reported to the DOT are in the 20%-25% range. Data from the US Bureau of Transportation Statistics show the average load factors for Shuttle flights from Honolulu in November and December were 25%.

Citing the challenges go! has in achieving profitability with loads on its 50-seat Bombardier CRJ200s running in the mid-to-high 60% range, Ornstein the questions the probability of Mokulele posting a profit with its significantly lower loads. go! turned its first profit since its 2006 launch during Mesa's fiscal first quarter, netting $500,000 million in net income on $11.6 million of revenue.

Ornstein notes go! has "been keeping an eye on" Mokulele's loads, and the statistics posted in November and December appear to be continuing. "We're going to keep a close eye on that [the loads] and see where it goes".