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Hawaiian carrier Island Air to cease operations

Hawaii's Island Air will cease all operations on 11 November, a move the financially-troubled company attributes partly to "aggressive legal attacks" by aircraft lessors.

Island Air had filed for Chapter 11 bankruptcy protection on 17 October and now says it will cease operations at the end of today.

"One of the difficulties of attracting new investors was the aggressive legal attacks by lessors Wells Fargo Bank Northwest. and Elix 8," says Island Air in a 9 November media release announcing its shutdown.

"All Island Air passengers must make alternative arrangements for inter-island transportation, effective this Saturday, 11 November."

The move will see the airline cease flights after 37 years of service between Hawaii's islands, says the company.

“Island Air has taken every measure possible to avoid this tremendous hardship to its passengers," says chief executive David Uchiyama.

In filing for bankruptcy protection in October, Island Air cited legal challenges posed by lessors who sought to repossess the carrier's Bombardier Q400s.

"Lessors continued to engage in multi-directional legal attacks which Island Air could no longer combat without additional financing," the release says. "The aircraft lessors were seeking termination of all leases and immediate repossession of all aircraft."

Island Air had recently acquired five Bombardier Q400s, which replacing a previous fleet of five ATR turboprops.

The airline carried 13% of all intra-Hawaii airline seats in the first nine months of 2017, and primarily competes against Hawaiian Airlines, which carried 80% of seats in that market during the period, FlightGlobal schedules data shows.

Island Air posted a net loss of $8.2 million and an operating loss of $4.9 million in the second quarter of 2017, US government data shows.

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