Mokulele Airlines (MW, Kona) will cease essential air services (EAS) between Kamuela and Kahului, Hawaii after the local community and the US Department of Transportation (DOT) failed to agree on cost-sharing.

The current four-year contract, valued at USD1.76 million per annum, ended on September 30, 2017.

Mokulele Airlines proposed to continue the existing level of service, consisting of twelve round trips per week, using nine-seat Cessna (single turboprop) Grand Caravan 208B aircraft, for a total four-year subsidy of USD1.59 million.

The contract will not be signed since the DOT failed to reach an agreement with the local community over cost sharing. According to the EAS rules first implemented in 2015, the community has to participate in EAS costs if the airport is located less than 40 miles from the nearest hub. Kamuela is less than 31 miles from Kona.

At first, the State of Hawaii was willing to cover 5% of the EAS cost, but it proposed to use airport revenues for this purpose, according to the official DOT file. Since it would be illegal to source the money from airport revenues, the state withdrew its proposal. The local community only offered USD500, far less than the DOT expected.

The DOT first extended the EAS contract through October 31, 2017, and more recently through January 15, 2018, to avoid travel disruption during the busy holiday period. According to the ch-aviation schedules module, Mokulele Airlines is the sole operator at Kamuela. After January 15, 2018, the airport will not have a single scheduled service.