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Mokulele pays staff, raises $291,000 owed to Republic


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POSTED: Saturday, February 21, 2009

Mokulele Airlines made its Friday payroll after all.

The financially strapped airline, which was going to postpone paying its 180 employees until Monday, said yesterday it received a lifeline from an unidentified mainland carrier that “;bought a lot of seats in advance from us because they want us to make it,”; according to Mokulele President and Chief Executive Bill Boyer.

In addition, Boyer said Mokulele has enough money now to pay the $291,000 it owes business partner Republic Airways, which provides the three Embraer 170 jets and crew that Mokulele is using for its interisland routes. He said the money to make the payment was generated from the mainland airline, other ticket purchases and Mokulele's reserve.

Boyer said Mokulele is still looking for investors to recapitalize the company and that he is in negotiations with interested investors, as well as Republic, on a recapitalization plan.

Mokulele, which was in default earlier this week of a $300,000 payment it owed Republic, made good on that payment Wednesday on the same day that Republic had threatened to seize Mokulele's planes and other assets if it wasn't paid. Boyer said the $291,000 payment, which was due yesterday, will be paid by the middle of next week during the payment grace period that the company is allowed.

The next payment owed by Mokulele to Republic, approximately $300,000, won't be due until the end of the first week of March, Boyer said.

Boyer said he was under a nondisclosure agreement and couldn't identify the mainland airline that bought the tickets or the amount of the purchases. He did say, though, that the mainland airline also bought “;a bunch”; of tour seats that are “;high-dollar”; seats that sell between $199 and $399 apiece.

“;We got enough (money from the mainland carrier) to cover a lot of our expenses,”; Boyer said. “;They can resell the tickets to their group of travelers who want to make connecting flights in the islands.”;

Boyer said there has been “;a tremendous amount of people”; buying tickets since word of Mokulele's predicament became public this week and that Mokulele's load factor, or the percentage of seats filled, was “;going through the roof”; yesterday. He said Mokulele's express carriers and jets had 74 percent capacity yesterday.

“;People have been calling us and asking how they can help, and a lot of people in the community and local travel agencies have been buying a lot of advance tickets and also tickets for same day of travel,”; Boyer said.