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Welcome, go! Mokulele


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POSTED: Saturday, October 17, 2009

Little more than a year-and-a-half after the grounding of Aloha Airlines, a one-on-one rivalry appears to be returning. The merger of Mesa Air Group's go! Airline and Republic Airways Holdings' Mokulele hopefully will bring stability to competition in island airways.

Phoenix-based Mesa expanded service following Aloha's demise in March 2008. However, go! has struggled since Mokulele became a third player in the interisland competition by coming under Indianapolis-based Republic's wing a year ago. This week's merger was necessary to save both airlines as one and keep alive the potential for a competitive market.

Under the agreement, Mesa owns 75 percent of the new company, and Republic and Mokulele shareholders own the rest. Most jobs will be protected, according to company officials.

Jonathan Ornstein, Mesa's chairman and chief executive, says the airline flying under the new go! Mokulele moniker—sounding more like a football chant than an airline—will position itself as Hawaii's lower-cost interisland air carrier, enabled by the joint endeavor's smaller planes. Hawaiian Airlines lays claim to “;the most competitive services and fares.”;

The recession that plummeted tourism in the past year has hampered interisland air travel. The combined statistics of air passengers on go! and Mokulele in recent months indicate they have a good distance to go to match Hawaiian.

An average of 26 out of 70 seats on Mokulele flights have been filled with warm bodies. Combined, Mokulele and go! have flown with barely half the seats occupied while more than three-fourths of Hawaiian's far greater number of seats have been in use.

Ornstein nevertheless is optimistic.

“;We have smaller crafts so we have lower costs,”; he told the Star-Bulletin's Allison Schaefers. “;And all businesses, if they are to remain in business, have to charge something more than what it costs them.”;

Retired airline executive Franco Mancassola, who lives in Hawaii, predicts Hawaiian will continue to dominate the market because of its larger planes and transpacific flights, but he hopes the merger of go! and Mokulele will keep competition alive.

“;This merger, at least for the time being, seems a reasonable, face-saving solution,”; Mancassola wrote.

Time will tell whether the merger is merely a face saver or a real step toward lasting competition to keep air fares at a reasonable rate.