Island Air resumes service to Kona

KAILUA-KONA >> Shortly after dawn broke Tuesday morning, Island Air touched down at Kona International Airport carrying a nearly full plane of passengers and renewed hope for the state’s second-largest carrier.

It was the the local airline’s first flight to Kona since December 2012 and was celebrated by a Hawaiian blessing, hula dancers and bento boxes and lei for arriving and departing passengers.

The Honolulu-Kona route, which will be flown five round trips a day, was another step forward in Island Air’s expansion since two investment groups led by Honolulu venture capitalist Jeffrey Au purchased majority ownership in February from billionaire Larry Ellison. The airline expanded to Kauai in March.

Island Air currently lists its lowest one-way regular fare on the Kona route at $79 — the same as that of larger competitor Hawaiian Airlines.

Au said Island Air has no intention of trying to undercut Hawaiian.

“That’s not really our strategy,” Au said. “Our strategy is just to price things that make sense for us. We don’t have any interest in any kind of fare war.”

Island Air’s new service represented a second coup for Kona in as many months. Hawaiian Airlines said May 13 it would begin three-days-a-week service from Haneda International Airport in Tokyo to Kona later this year or early in 2017. That will be the first scheduled nonstop flight from Japan to Kona since Japan Airlines left in 2010.

The increased activity to Hawaii island was enough to bring a smile Tuesday to island Mayor Billy Kenoi.

“Any time you can expand your transportation infrastructure, it’s a benefit to a myriad of folks in your community,” Kenoi said. “To have 22 new jobs and to have about 300 new seats coming into Kona (from Island Air) and to Honolulu, connecting us throughout the state, I think augments and supplements our transportation system. So we’re very grateful and appreciative.”

Kenoi said the U.S. Department of Transportation’s approval of Hawaiian’s Haneda-Kona application, which includes four-times-a-week service to Honolulu, will give an even a bigger boost to the Big Island’s economy.

“We’re very excited about that,” Kenoi said. “We worked for many years to make that happen. When Japan Airlines left in 2010, we lost over 60,000 seats a year. That’s a huge impact in our economy. For Hawaiian Air to have the confidence in Kona to connect that Haneda flight really expands our economy and creates job opportunities and keeps our working families working. So as a mayor of that community, you can’t help but be thankful and appreciate everyone involved. We have a lot of airline service in Kona and would like to see that airline expansion to Hilo as well.”

David Uchiyama, who was appointed Island Air’s CEO last month following the April departure of Les Murashige, said his previous experience as vice president of brand management for the Hawaii Tourism Authority will serve him well.

“We’re looking at it no different than how we looked at developing inbound flights into the state,” he said. “We’re looking at the routes, we’re looking at the numbers and we’re looking at local traffic versus visitors, and making decisions on routes based on that and the traffic that we see.

“I think Kona is very important, especially for the international markets. There’s a lot of interest in Kona. That’s why you see everybody pursuing Customs and Immigration here (in Kona) because they’d like to have direct flights into Kona. So we’re following along those trends. Having worked with all these trans-Pacific carriers in trying to generate more routes inbound, I’m now going back and talking to all of them about establishing a stronger relationship with Island Air and having us assist their customers between the islands.”

The airline also said Tuesday it has hired veteran tourism industry leader George Applegate, former executive director of the Big Island Visitors Bureau, to serve as its representative on Hawaii island and support the airline’s sales efforts.

Uchiyama said Island Air wants to grow responsibly and sustain its growth while continuing to improve its on-time performance and reliability.

“With additional aircraft coming in, we can start to look at potentially more growth,” he said. “We need to increase the lines of flying that we’re doing right now. The only way we’ll be able to do that is by getting new aircraft in.”

Island Air currently flies from Honolulu to Maui, Kauai and now Kona.

Au, head of the airline’s local investor groups, said the company is in negotiations to secure additional ATR aircraft to supplement its fleet of five 64-seat ATR 72-212 turboprops.

“Part of the issue in terms of timing our aircraft is that they are ATRs, which are French planes,” he said. “ATR has something like 80 percent market share for turboprops outside the U.S., but we would be the first commercial airline to fly in the U.S. with the models we’re looking at, the 500s and the 600s. That means there’s a whole additional process of FAA (Federal Aviation Administration) modification, certification, things like that.”

Au said it’s difficult to tell when Island Air will become profitable after losing money every quarter under Ellison, starting with the April-June period of 2013.

“We hope we can be profitable by the end of the year, but we’re not making any predictions,” Au said. “It depends on a lot of things — not only expenses, but at what rate we want to grow and at what rate we want to spend on things.”