Wednesday | November 22, 2017
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Island Air shutting down Saturday

Interisland air carrier Island Air announced it will shut down operations as of Saturday, significantly diminishing the number of interisland flights available. In a Thursday afternoon statement, the carrier said “all Island Air passengers must make alternative arrangements for interisland transportation, effective this Saturday, November 11, 2017.”

The Island Air website appeared to be down Thursday.

The airline’s explanation for ending service focused on lenders Wells Fargo Bank Northwest, N.A. and Elix 8 Ltd. (it was after business hours for those two companies Thursday afternoon, making them unavailable for comment).

The airline filed for Chapter 11 bankruptcy protection last month in an effort to continue operations following threats of legal action to ground and repossess its fleet. However, the company “was unable to locate a new investor or lender to provide funding to support airline flight operations and a successful reorganization,” according to its statement Thursday.

“I want to thank Island Air for its decades of service to our communities,” Gov. David Ige said in a statement. “For 37 years the company and its employees have played a big role in connecting island families and supporting our business community.

“The closure will have a tremendous effect on 400 employees and their families, and the state will be working with Island Air to help the employees apply for unemployment insurance and provide assistance with job searches and training opportunities.”

The company had been expected to add more daily flights and to begin serving Hilo International Airport by the end of 2017.

It recently transitioned to new Q400 turboprops and started training programs to update pilots. The Federal Aviation Administration confirmed to the Tribune-Herald in September that, at the time, the FAA was “certificating their new pilots to fly the aircraft they (would) use at Hilo.”

Island Air announced as recently as February that it would expand from six daily flights to 10 between Honolulu and Kona; from eight flights to 16 between Honolulu and Kahului; and from six to eight flights between Honolulu and Lihue.

Overall, Island Air planned to increase from 265 daily interisland flights across Hawaii to 476.

But the airline said it was under multiple legal attacks that it could “no longer combat without additional financing.”

A temporary restraining order requested by the airline was denied Nov. 3 by Judge Robert Faris of the District of Hawaii Bankruptcy Court, Island Air said, complaining that lenders continued legal challenges, after the denial, that it couldn’t keep up with financially.

“Island Air has taken every measure possible to avoid this tremendous hardship to its passengers,” Island Air President and CEO David Uchiyama said in the announcement. “Island Air appreciates the loyalty and support its customers, management, employees and vendors have shown the airline, especially during the last few weeks of this bankruptcy process.

“Island Air is proud of its 37-year history of service to the State of Hawaii.”

Email Jeff Hansel at jhansel@hawaiitribune-herald.com.

 

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