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Airlines begin transition


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POSTED: Thursday, October 15, 2009

The ever-changing airline landscape in Hawaii began taking on a new look yesterday as Mesa Air Group began the process of adding up to 10 flights a day in the wake of the joint venture between its interisland carrier go! and rival Mokulele Airlines.

Still uncertain, though, is how many people will remain from the combined work force of more than 270 employees. Also in limbo are an additional 180 workers employed by Mesa's ground-handling agents, Swissport and Aloha Contract Services.

The agreement, announced Tuesday, made Mesa the majority owner with 75 percent of the joint venture while Mokulele's previous majority owner, Indianapolis-based Republic Airways, along with Mokulele shareholders, will own the remaining 25 percent of the newly named go! Mokulele.

Go! Vice President Paul Skellon said yesterday that determining the appropriate size of the combined labor force is “;a top priority”; and that he and Mokulele Chief Executive Officer Scott Durgin will determine that number “;as soon as possible.”;

Mokulele has about 180 employees, with about 38 percent of those formerly from now-defunct Aloha Airlines. Go! has 93 employees, excluding the ground-handling agents with whom it contracts.

Kathy Wooldridge, director of human resources for Republic, filed a base-closing notice yesterday with the Hawaii Department of Labor and Industrial Relations. The notice said there would be an unspecified number of layoffs effective Oct. 31. Wooldridge could not be reached for comment.

Mesa Chairman and CEO Jonathan Ornstein said most of the Mokulele jobs would be protected, especially if some of the employees were willing to relocate to other Hawaii airports. He also said Mesa was exploring the possibility of doing its own ground handling rather than using outside contractors.

The transition began in earnest yesterday as Mokulele's three 70-seat Embraer 170 jets took their final flights, taking 44 daily flights, or 3,080 seats, out of the market. Even though go! and Mokulele will continue with their separate brands and Web sites, all passengers will now check in at the go! ticket counter in the commuter terminal. Previously, Mokulele operated out of the interisland terminal. The rebranding of the ticket counters at all Hawaii airports was scheduled to take place last night. Go! also will add the Mokulele name to the side of all the aircraft to reflect the new name. Skellon said Mokulele's name will remain in red on all logos except on the aircraft, where it will be changed to blue to match go!'s color scheme.

Go! is adjusting its flight schedule to accommodate the combined operation and has added morning and evening round trips between Honolulu and Hilo, as well as an afternoon Honolulu-Maui round trip and morning and afternoon Honolulu-Lihue round trips.

Ornstein said the joint venture should help go! achieve profitability because of the seating capacity coming out of the market.

“;This means we should carry more passengers on our flights,”; he said.

Ironically, go!, which had a code-share agreement with Mokulele before Mokulele teamed with Republic, now is back together again with the airline.

Since that time, go! has entered into a code share with Island Air, which Ornstein said he intends to keep. Ornstein said he plans to bring in an additional 50-seat CRJ 200 in the spring to add to the current fleet of five CRJ 200s.

Go! has had only one profitable quarter since debuting in June 2006 while Mokulele, which also operates four nine-seat Cessna Grand Caravans, hasn't had a profitable quarter since teaming with Republic in November 2008. Go!'s load factor, or percentage of seats filled, generally has hovered between 60 percent and 70 percent while Mokulele's load factor consistently has been under 40 percent, according to company reports and data from the U.S. Department of Transportation.

Local aviation historian Peter Forman said he sees the joint venture “;as a necessary step.”;

“;Either one of the two airlines had to bow out or merge with the other at some point because the loads were too light,”; he said. “;And Mokulele, although they had more staying power in terms of money in the bank, they were being outperformed by go!. So this merger makes sense for them.”;

Forman said one of the looming questions is how many of Mokulele's customers will cross over to the merged company.

“;Some of the Mokulele employees and customers were there because it was an alternative to go!, and now that there's a merger, there's still some ill feelings from the Aloha Airlines issue (when go! was blamed by some for forcing Aloha out of business),”; he said.

“;I think ultimately what the merged company needs to do is get enough customers so that eventually they could operate larger airplanes that are more economic. That needs to be their long-range goal.”;