Mokulele Airlines (MHO, Kona) has appealed for state support to stem USD350,000 monthly losses due to COVID-19 travel restrictions, reports Maui News.

Wholly owned by Southern Airways Express (9X, Memphis International), the Hawaiian inter-island commuter airline is asking for state help either through subsidies, airport fee credits, or the lifting of an inter-island 14-day quarantine and pre-travel testing requirements, which, it says, are limiting air travel.

Appearing before a recent state Senate Transportation Committee virtual meeting, Mokulele Airlines Chief of Staff Keith Sisson asked for a change in inter-island travel policies; or a temporary state subsidy to cover losses while pre-travel testing and quarantine rules remain in place; or that the state issues credits for future Department of Transportation (DoT) airport payments to relieve Mokulele’s USD50,000 monthly rent and landing fees and provide cash-flow relief.

Mokulele Airlines is the sole provider of flights to Hana and Kapalua in Maui County, and Waimea in Hawaii County. The carrier is currently seeking landing rights at Hanalei/Princeville on Kauai. Other destinations served include Kahului, Molokai, Lanai City, Kona, Honolulu, and Kalaupapa. According to the company's website, Mokulele Airlines operates a fleet of eleven Cessna (single turboprop) 208EX Grand Caravans.

Sisson told the committee that parent Southern Airways Express has been filling in the deficit in the Hawaii operations since August 2020, but “we are running out of the ability to do that.” With Southern Airways Express' support, the carrier had managed to hold the line on ticket prices. It had kept all its workers employed, though with reduced hours, and had maintained flights to all destinations with schedule adjustments.

Sisson said Hawaii’s 14-day quarantine and pre-travel testing programme were confusing travellers as each county has its own rules for inter-island travel. Maui and Kauai counties require a pre-travel test to avoid quarantine, while Hawaii island requires an additional post-travel test; and Honolulu does not require a test at all. “People are confused, they are not booking,” he said. While quarantine requirements between islands in Maui County were lifted on October 15, travel restrictions were still in place for Lanai City until November 11, 2020.

Sisson said that when the inter-island travel ban was lifted in mid-June, Mokulele Airlines was able to break-even, but went back into the red in August when Hawaii Neighbor Islands quarantine requirements were reintroduced.

The airline currently flies 3,000 passengers a month compared to 30,000 before the pandemic. Future bookings are limited, with most trans-Pacific travellers continuing to their final destination without island hopping, he added.

The committee’s Airports Division Deputy Director Ross Higashi dismissed prospects of further DoT credits. He said the airports' division implemented a payment deferral programme on April 1, 2020, for airlines using federal CARES Act funding, but deferred fees needed to be paid back in instalments starting in January 2021.

Higashi pointed out that state airports had financial issues too, with only 50% of revenue coming in from airlines and the other half from concessions, which were all affected by the economic downturn caused by COVID-19. “Our cash in hand has been dwindling as well, from 700 days to halfway through next year to 500 days,” he said.

Maui County Senator J. Kalani English said the removal of inter-island travel rules based on health reasons was unlikely to happen. He added the state legislature was no longer in session and that any further subsidies would have to be discussed with the state governor.

Higashi pointed out that the DoT would be looking for a carrier to continue the Essential Air Service to Molokai and Lanai, currently being provided by Hawaiian Airlines (HA, Honolulu) subsidiary Ohana by Hawaiian. The airline would service the destinations until mid-January 2021 while completing a 90-day notice period before its contract ended. The DoT will rule in the next 30 days whether to grant Ohana by Hawaiian’s request to waive the 90-day notice period. Currently, Ohana by Hawaiian and Mokulele Airlines service the two islands, but Sisson said Mokulele was prepared to fill the gap.

He said Mokulele Airlines would also be ready to take over flights between Kahului and Hilo should Hawaiian Airlines continue to reduce its schedule on the route.