Pacific Air Charters (Honolulu) has told the United States Department of Transportation (DOT) it can operate multiple daily roundtrips between Lanai City, Honolulu, and Kahului (Maui) in its response to a request for a proposal to operate essential air services to Lanai City.

It said it could use nine-passenger Tecnam P2012s to operate a schedule consistent with the EAS determination and presented the DOT with two proposals:

  • six daily roundtrips to Honolulu and three daily to Kahului providing 81 daily seats in each direction; or
  • seven daily roundtrips to Honolulu and two daily to Kahului, also with 81 seats in each direction.

Southern Airways Express, doing business as Mokulele Airlines (MHO, Kona), is the current operator in and out of Lanai City, connecting that airport with Honolulu, Kahului, and Kaunakakai, but last December it told the DOT that it intended to stop the flights citing rising costs and stagnant demand. However, DOT filings indicate it has since submitted a fresh application and is now competing with Pacific Air Charters for the new contract.

Pacific Air Charters, a Part 135 airline, says it has applied to the Federal Aviation Administration for authority to operate scheduled intrastate commuter flights. Both of its proposed schedules involve 6,570 annual departures and 4,566 block hours. It expects to fly 44,106 passengers annually on either schedule, based on a 75% load factor, at an average ticket price of USD108, generating USD4,468.

After operating costs, the airline expects to incur an annual loss of USD7,516,184 if flying the six Honolulu plus three Kahului services or USD7,589,275 if operating the seven Honolulu and two Kahului flights. Factoring in a 5% revenue margin, its request is for an annual subsidy of USD8,115,418 to operate the first option or USD8,192,164 for the second. This breaks down to a subsidy of either USD183 or USD186 per passenger.

"We believe Pacific Air Charters has presented a compelling case to become the essential air service provider at Lanai City," wrote CEO Marshall Ashley. "Pacific Air Charters is uniquely provided to meet the department's selection criteria while offering the passenger maximum consumer benefits. Our proposal can fundamentally improve air services to Lanai City."

It aims for the contract to last a minimum of 24 months with a 3% inflation adjustment in the second 12 months.