Hawaiian Airlines is dismantling ‘Ohana by Hawaiian, including its all-cargo neighbor island service and flights to Molokai, Lanai and Kapalua in West Maui.

Jon Snook, Hawaiian’s chief operating officer, said a pandemic-related drop in travel demand already had caused it to temporarily suspend cargo service with ATR 72 aircraft in November, and passenger service with ATR 42 aircraft halted Jan. 14. Service between Honolulu and Kapalua was suspended in March 2020.

The changes, which became permanent Thursday, leave Mokulele Airlines as the only airline flying to both Molokai and Lanai.

Snook said the pandemic was the “final nail in the coffin” for ‘Ohana by Hawaiian, which has struggled with too many empty seats from its inception.

‘Ohana by Hawaiian flights with ATR-42 turboprop aircraft were launched in the spring of 2014, followed by all-cargo service with ATR-72 aircraft in the summer of 2018.

“This has been a business that has been a financial strain for us for a long time. It’s never been consistently profitable. It’s probably an outcome that would have occurred anyway. The current circumstances around the pandemic precipitated an earlier analysis of the long-term plan for this service,” Snook said.

Peter Ingram, president and CEO at Hawaiian Airlines, said in a statement that the decision not to reinstate serv­ice was weighed seriously.

“This is a heartbreaking decision, particularly for those of us who were involved in launching the business in 2014,” Ingram said. “We took a hard look at the service and could not identify a way to restart and sustainably operate.”

Snook said the neighbor island quarantine killed demand at a time when ‘Ohana was already struggling to compete against Mokulele, which was flying smaller planes at a lower cost.

“Our aircraft is much bigger and much more expensive to operate, and so we couldn’t generate enough volume at those prices to be successful,” he said.

Snook said Hawaiian will watch the market and is hopeful that the neighbor island quarantine will eventually be lifted. He said Hawaiian would love to be back in the market, but right now, with the planes at its disposal, he doesn’t see a “line of sight” for the return.

‘Ohana by Hawaiian was operated by Idaho-based Empire Airlines as a third-party feeder carrier. There were 97 Empire employees associated with the operation. Contractor World Flight Services employed a staff of 28 to provide ground handling services.

Some 28 people worked for Hawaiian Airlines contract services, and another 35 for Hawaiian Airlines cargo department.

Snook could not immediately say how the decision will affect Empire employees and contract employees. But he said Hawaiian employees, who were assigned to ‘Ohana by Hawaiian operations, avoided earlier furloughs due to federal relief. Snook said now Hawaiian will give them the opportunity to be reassigned to different areas of the company.

Hawaiian already has had a companywide recall of most furloughed employees and currently employs 6,850 people, mostly in Hawaii.

The carrier announced Monday that it hoped to fill more than 400 positions ahead of the busy summer season.

Travel demand is coming back. Hawaiian saw a first- quarter rebound, and on Tuesday said it expects revenue to be down 42% to 46% in the second quarter, compared with the second quarter of 2019.

That’s an an improvement from Hawaiian’s prior estimate that it would be down 45% to 50%.

Hawaiian said it has begun moving its ATR fleet to the mainland for storage and eventual sale. The carrier said it has lent some of its ground support equipment to Mokulele Airlines, which is providing service between Honolulu and Molokai and Lanai.

“We thank the communities of Molokai and Lanai for their support of ‘Ohana by Hawaiian,” said Ingram.“We will continue to explore opportunities to return to and to reconnect the islands as Hawaii’s carrier.”

Maui Mayor Mike Victorino said in a statement, “Hawaiian Airlines has been a good partner for the neighbor islands, and I’d like to believe the airline can return someday in the future.”

“Fortunately, Mokulele Airlines will continue to serve both islands; Lanai can also rely on Expeditions Ferry service. Rep. Lynn DeCoite and I have discussed our shared concerns about the loss of medical transport to, and from, Honolulu for patients who require special seating or the use of boarding ramps for mobility reasons,” he said. “We understand that Mokulele has plans to expand to larger aircraft to compensate for the loss of lift, and we appreciate their concern for the people of Lanai and Molokai. We will continue to research alternatives for those with special travel needs.”

DeCoite (D, Molokai-Lanai-East Maui) said the ‘Ohana by Hawaiian service to Molokai and Lanai has been “sorely missed” since operations were suspended in January.

“For years they were the only option for our residents that are in wheelchairs or those needing physical assistance to be able to travel off island,” she said. “While I am grateful that they served our communities for the past six years, even to their econo­mic detriment, I am sad to hear today’s announcement.”

DeCoite said ensuring viable travel options for Molokai and Lanai residents is paramount, especially with the lifting of some COVID-19 regulations and the start of the intercounty vaccine passport for local residents.

“So many of us from Molokai and Lanai need to travel for basic and advanced medical care. We want to see our families on neighbor islands and even on the mainland,” she said.

Earlier this month Southern Airways, parent company of Mokulele Airlines, announced that it plans to bring Beechcraft 1900 aircraft to offer cabin-class weekday service for travelers to Molokai and Lanai. The larger planes are able to carry up to 19 passengers.

Keith Sisson, Mokulele chief of staff, said in a statement, “We are prepared to immediately bring more flights to Molokai and Lanai as the demand is needed, beginning with the addition of multiple daily flights that have been added to our June 1 schedule.”