Island Air is revisiting its past and planning to add Bombardier Q400 turboprops to its fleet after two previous, aborted attempts.
The state’s second-largest carrier said Tuesday it is making its first aircraft acquisition under its new ownership group and will be phasing out its entire fleet of five 64-seat ATR-72 turboprops at an undetermined date.
The addition of new planes to Island Air’s fleet comes as the airline endeavors to return to profitability after more than three years of red ink.
“As we look to expand our regional route network and connect local residents and visitors across the islands, the reliable, operationally flexible and cost-effective Q400 turboprop is the perfect choice to take our airline to the next level,” Island Air President and CEO David Uchiyama said in a statement. “Additionally, the comprehensive support from Bombardier in acquiring the aircraft and integrating them into our network reconfirms our decision to utilize this superior product for our fleet renewal and expansion strategy.”
Island Air said the first of three leased 78-seat Q400 aircraft will arrive in Honolulu by the end of this month as part of its agreement with leasing company Elix Aviation Capital Ltd. The second Q400 is scheduled to arrive in the first quarter, and the third is due to be delivered in April. Island Air, which has an option to lease two additional aircraft, did not disclose the value of the deal.
The airline, which was acquired by Honolulu venture capitalist Jeffrey Au and other investors in early February, had been looking at the Q400 as one of its aircraft options to overhaul its fleet. Despite low fuel prices, Island Air has lost money for 14 straight quarters totaling $61.8 million under Au and its previous owner, billionaire Larry Ellison, who remains a minority investor. The company’s $2.1 million loss last quarter, though, was the smallest of this year.
The Q400, which is a larger aircraft than the ATR-72, is built at Bombardier’s Toronto facility and has a maximum cruise speed of 414 mph and maximum operating altitude of 27,000 fleet. The aircraft is 30 percent faster than conventional turboprops and has a noise reduction and vibration suppression system. The ATR-72, by contrast, emits a loud noise while climbing to altitude during takeoff. Island Air said the Q400 is more environmentally friendly than other aircraft serving the Hawaii market on short-haul routes because it burns 30 percent less fuel and produces
30 percent lower emissions than other aircraft.
Island Air pilots have been undergoing a two-month training program to become certified to fly the Q400. The inaugural flight of the Q400 is scheduled in January.
The airline, which offers 238 flights a week between Oahu, Maui, Kauai and Hawaii island, twice over the last decade tried unsuccessfully to add the Q400 to its fleet. The configuration of the newly ordered Q400s is different from previous models, including the color selection and paint scheme.
In March 2014 Island Air purchased two Q400 turboprops for an estimated
$60.9 million and had an option to acquire four others. Those initial two planes ordered by Ellison never were delivered in Honolulu and were sitting unused in an Arizona airfield when the Au investment group bought the airline earlier this year. Those aircraft have since been sold to another carrier.
In March 2006 Island Air brought into Honolulu the first of three Q400s that were due to be delivered. But the Q400 remained in service only until September of that year when the airline pulled it from the fleet due to high fuel prices and a fare war initiated by upstart go! that drastically pulled down ticket prices. Island Air postponed delivery of the other two Q400s and sent the other Q400 back to the mainland.
Uchiyama said he’s convinced the Q400 now is the right airline for the company.
“After much review of comparison studies by the current investors and the Island Air team, as well as input from our pilots and operational crews, the decision was made to reopen discussions with Bombardier to acquire new Q400s,” he said in an email. “We believe the Q400, with its state-of-the-art technology such as noise reduction cabin, is the type of aircraft we need to deliver the level of service and overall experience that Island Air is striving to provide our customers.”
