The company that could be Hawaii's next interisland carrier, FlyHawaii, gave details of its plans yesterday. A video showed the type of plane that will be used. Behind the monitor is Merritte Wilson, left, director of maintenance; Tim Cislo, director of quality assurance; and Tina Marshman, director of in-flight services.

Flights of

A company plans to offer
one-way interisland fares
of $50 on average

The state's two largest airlines are in bankruptcy and the industry is in upheaval, but the brainchild behind startup FlyHawaii Airlines said the time is right for a new interisland carrier to enter the marketplace.

FlyHawaii Airlines

Lion Coffee founder James Delano, declaring that Hawaii residents need a low-cost alternative to fly between the islands, unveiled plans yesterday for a new airline that will begin service early next year from Honolulu to Kahului, Maui, and gradually expand to the other islands.

Delano said one-way fares will average about $50 and that he is in "very serious discussions" with Hawaii and mainland investors to raise $32 million to meet an economic fitness test required by the federal Department of Transportation.

"Soon after the attack of Sept. 11, existing airlines began to cut back interisland service and raise their fares," Delano said. "Today, there are many fewer flights, and fares have gotten so high that many people can no longer afford to visit their families and friends, or tend to business on the neighbor islands. I started FlyHawaii because I believe Hawaii's air carriers have a special responsibility to deliver convenient, affordable interisland service to local residents."

FlyHawaii will use ATR-72 aircraft that have leather seats and can hold 68 passengers in a two-by-two seating configuration. Delano said there will be no assigned seating and no fee to make flight changes.

A photo illustration of one of the company's planes.

He hopes to submit an application to the Transportation Department "soon" and said the company has "several contracts on the table" for the four to five aircraft it needs to begin service.

"It takes about $12 million to start the airline and, in addition, it will take about another $20 million in cash and guarantees," he said. "We've had ongoing meetings with investors and they understand those are the financial requirements."

Carl Christoffersen, vice president and chief financial officer for FlyHawaii, said that after the company gets approval from the Transportation Department, obtaining an operating certificate from the Federal Aviation Administration probably will be a six- to nine-month process.

Delano said he doesn't anticipate any problems getting space at the airports for the company's planes.

"We have been meeting with the (state) Department of Transportation for the last 18 months," he said. "They've been really supportive of what we're about. The airports in Hawaii are not slot controlled like an airport on the mainland (and the state DOT has) assured us we'll have space at the airports."

Ultimately, Delano said the company's 20 employees will expand to about 700 and that the fleet of planes will range from 12 to 14.

Hawaiian Airlines spokesman Keoni Wagner said the company welcomes the competition. Officials at Aloha airlines, which last year joined Hawaiian in bankruptcy, declined comment, as did an official from interisland carrier Island Air.

Each airline pointed out that their lowest fares are close to what FlyHawaii is promoting. Hawaiian is offering a $63 one-way, next-day fare from Hono-lulu to Kahului while Aloha has a $69 fare. Both fares don't include applicable taxes and fees. Island Air's next-day fare for Kahului is $54.80, excluding taxes and fees.

Christoffersen said the $50 price is an average without fees and taxes and that the fare could be as low as $35 one way for eventual flights to Molokai and Lanai.

Delano, who is hoping to succeed where predecessors like Mahalo Airlines and Discovery Airways failed, said the island landscape is different now.

"FlyHawaii is a completely different airline set up in a completely different era," Delano said. "The problems carriers faced in the past are not evident in the marketplace today."

As an example, he cited ticketing previously controlled by travel agents but now mostly done by consumers on the Internet. Delano also said the technology needed to run an airline is more sophisticated today.

Lt. Gov. Duke Aiona, who was one of several state officials at the media event, said he welcomed competition among airlines.

"This administration has always said from day one that when it comes to business and making business friendly in this state, that we need competition," he said. "And that's exactly what we have in this airline. We have competition that we believe will not only spur on the industry to accommodate the islanders in much better fashion, but I think will also help us in regards to our daily lives."

Delano, who spent more than $1.5 million during the past two years planning the airline, said he studied low-cost airlines such as JetBlue and Southwest and interisland carriers in the Caribbean, Tahiti and the Canary Islands.

"I brought what I learned back to Hawaii and began to recruit a team of people to help me bring low-cost air travel to our community," he said.

He said he wants to build an airline that flies so often that people don't have to plan weeks in advance to get a great fare.

"You can decide the day before or even the same day and you'll still get a ticket of about $50," he said. "We want people to walk to our counter and get on our planes."

Delano said he can keep the costs down because the planes have significantly lower fuel and maintenance costs than aircraft used by FlyHawaii's competitors. He also said FlyHawaii will use "the most cost-efficient Web ticketing and cutting-edge flight and maintenance software" and will operate with a more efficient staff-to-aircraft ratio.

FlyHawaii Airlines

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