Unpaid Lease Rents for
Q400 Kills Island Air

I have never flown on Island Air and never will.

Island Air announced that they would cease operations at the end of today, November 10. 

The shutdown comes nearly a month after the airline filed for Chapter 11 bankruptcy protection. It tried to find major investors to prop themselves up. In the end that did not happen. The company that they leased their recently acquired 78-passenger Q400 turboprop planes forced Island Air to close after the airline did not meet lease rent payments for the aircraft.

As a result, more than 400 people will be out of work and passengers will be stuck with worthless tickets that they may be able to get refunds from through their credit card companies.

Island Air was in business for 37 years, starting in 1980 as Princeville Airlines. Back then the airline flew deHavilland Twin Otter prop planes between Honolulu and the privately owned Princeville Airport on Kauai.

In the 1980s Princeville Airlines was acquired by Aloha Airlines which renamed the commuter carrier Aloha Island Air. They continued to operate the small, 18 passenger Twin Otter planes. In time the fleet was upgraded to the deHavilland Dash 8 turbo-prop that carried a little more than 30 passengers.

Island Air N943WP

The airline was successful with the Dash 8’s and continued for many years under a few ownership changes through the 21st century. In the 2000s, Island Air started flying the ATR 72 (photo above) turboprop which carried about 68 passengers. They briefly had a Q400 in their fleet for a short time in 2006.

This year, with some fanfare, Island Air decided to retire their ATR 72’s and acquired 5 78-passenger Bombardier Q400 turboprops which are based on the earlier versions of the Dash 8. The new planes were supposed to offer better passenger comfort and cost savings.

Never happened. Unpaid lease rents for the new aircraft, no profitability in the past 4.5 years, and the bankruptcy filing all caught up with Island Air as it died from a lack of cash.

Sad story for the local airline.

The inter-island market is now stuck with Hawaiian Airlines (and its subsidiary Ohana by Hawaiian) as the only major player in the market. Expect ticket prices to hike again.

The demise of Island Air opens the door wider for the possible entry of Southwest Airlines into the inter-island market since their service announcement was made in early October.

Inter-island air travel will be an interesting topic to continually watch.

Aircraft that Island Air operated

Video Report – KHON TV

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