Mokulele Airlines fleet gets boost from investor

The airline will expand its fleet, employees and routes this year

Maui philanthropist Dorvin Leis is making a multimillion-dollar placement in Mokulele Airlines.

Leis' minority stake will allow Mokulele to increase its fleet from four to as many as 10 aircraft, expand its routes and beef up its work force from 18 to as many as 58 employees by the end of the year, according to Mokulele Chief Executive Bill Boyer.

In addition, Mokulele is moving its headquarters from Kona to Honolulu and is preparing to break ground in Honolulu later this month on a $2.8 million maintenance and freight facility with refri- gerator space for perishable goods.

Leis, founder and chairman of the largest mechanical contractor in the state, has an option to purchase another multimillion-dollar stake in the company.

Mokulele, which became certified as a scheduled operator in December 2006, flies under its own name as well as go!Express, a code-share partner of Mesa Air Group Inc.'s interisland carrier go!

Maui philanthropist Dorvin Leis, who owns the largest mechanical contractor in the state, is making a multimillion-dollar placement in upstart Mokulele Airlines.

The minority stake will allow Mokulele to add additional aircraft, expand its routes and beef up its work force from 18 to as many as 58 employees by year end, Mokulele Chief Executive Bill Boyer said yesterday.

Mokulele, an on-demand carrier and tour company when it was purchased by Boyer in October 2005, has been ramping up in recent months. It became certified as a scheduled operator in December 2006 and in February reached a code-share agreement with Phoenix-based Mesa Air Group Inc. to fly as go!Express. It also continues to fly under the Mokulele name.

"Our goal is to get upward of 10 aircraft as soon as possible and this is one way of getting it done," said Boyer. He declined to disclose the amount of the investment or the percent stake it represented, but said Leis already has begun making initial payments.

Leis is founder and chairman of Kahului-based Dorvin D. Leis Co. Inc., which says it has annual revenue of more than $100 million and is consistently ranked among the largest contractors in the state and the largest mechanical contractor. He serves on Maui Community College's Provost Council and is a trustee of the University of Hawaii Foundation.

Last year, Leis and his wife, Betty, made a $1 million donation to Maui Community College -- the largest gift ever to the school -- to set up a sustainability fund that will help the college's culinary arts, construction technologies, and agriculture programs, as well as the development of courses in renewable fuels and energy conservation.

Boyer, who met Leis through a mutual friend, said he walked into Leis' office one day and saw a stack of invoices for interisland travel that was "at least three inches thick."

"By investing in Mokulele Airlines, Dorvin gets to keep his costs down as his crews travel between the Hawaiian islands at discounted rates," Boyer said. "Plus, what he does spend on air travel, he spends with a company in which he has a stake."

Leis said, "Made sense to me. I spend hundreds of thousands of dollars a year on moving employees interisland."

Boyer, the majority owner of Mokulele, said Leis has an option to purchase another multimillion stake in the company. Boyer said he's also talking to other investors as well.

Mokulele is in the midst of a fleet changeover as it transitions from piston-engine Piper Chieftains to turboprop Grand Cessna Caravans. Both types of aircraft carry nine passengers. Mokulele has one Caravan in service now that began operating last month as go!Express with up to four round-trip flights a day between Honolulu and Kapalua, Maui. Boyer said he eventually wants to increase the frequency on that route to 12 round trips a day.

"Six of the first nine days we ran at 100 percent capacity," he said.

Go!Express also offers Kona-Kahului service, plus a special $9 one-way fare for Kahului-Kapalua.

Under its own name, Mokulele offers service to all of the islands, with Kona-Kahului its predominant route.

Boyer said another Caravan is due to arrive this month and, as the Caravans arrive, he plans to phase out the three Piper Chieftains that are left in Mokulele's fleet. Boyer said Mokulele will extend service from Honolulu to Molokai and Lanai, as well as Kona-Lanai, on June 11.