Interisland mail
carrier quits
postal contract

Alpine Air Express is ending
its delivery services in Hawaii

The U.S. Postal Service is seeking an air carrier to ferry mail between Honolulu and the neighbor islands after Alpine Air Express Inc. announced its intent to terminate services in Hawaii.

The company, a subsidiary of Provo, Utah-based Alpine Aviation Inc., has carried all priority, first-class, express and registered mail to and from Honolulu and the neighbor islands since April 2004. The Postal Service is Alpine's primary client, but it also provides services for other island businesses.

The decision to end services will allow Alpine to pursue mainland-based opportunities with its Beechcraft 1900 and 99 aircraft, said Gene Mallette, chief executive and chairman of Alpine Air Express.

"We are saddened by the need to discontinue our service to the U.S. Postal Service and other contract clients in the Hawaiian Islands," Mallette said. "There are several opportunities we have not been able to pursue as a result of the demands our operations in Hawaii have created for our fleet and personnel."

Alpine Air's announcement came in response to the Postal Service's request that Alpine address concerns about its performance, said Duke Gonzales, the Postal Service's Hawaii public affairs and communication specialist.

Gonzales would not specify the Postal Service's concerns.

"In any case, we are in agreement that this contract should be terminated," Gonzales said. Postal Service officials were in meetings most of yesterday afternoon to determine how best to replace Alpine Air, which will continue to provide service until another carrier is found.

"The bottom line is that there will be no disruption in services to our postal customers. If anything, we expect this change to result in an improvement in service," Gonzales said.

While Alpine Air had invested millions to enter the neighbor island delivery market, the route did not offer enough volume to generate an adequate profit, said Alpine Air spokesman Michael Dancy.

Mail volume came in 12 percent lower than the Postal Service had estimated during the bidding process, Dancy said.

During the Christmas rush, the company delivered 125 tons of mail daily, but averaged 50 tons daily outside the holiday period, he said.

Some of the outlying islands also require substantial infrastructure investments to make delivery faster and more profitable, he said.

"We've had increased costs that have made it more difficult to operate at a profit," Dancy said, adding rising fuel and labor costs must also be factored into the equation.