Island Air’s New Ownership

Island Air — Molokai’s largest air carrier — is changing ownership, the airline announced Jan. 10. The company has not yet disclosed any details, including the buyer and how the sale may affect its employees and routes.
One week after the announcement, however, the Honolulu Star-Advertiser reported the buyer as billionaire Larry Ellison, the new owner of Lanai. The newspaper cited two anonymous sources “familiar with the situation.”

“Yes, we are in the midst of a potential sale,” Cindy Vanairsdale Island Air’s corporate secretary, told The Molokai Dispatch last week. “Amidst all the media speculations, from our end, it is still an unnamed entity during this due diligence period, and anything can happen.”

Island Air CEO Les Murashige sent a letter to employees on Jan. 10 warning them of possible downsizing beginning March 11. He issued the letter under the Hawaii Dislocated Worker’s Act, which requires employers to notice employees of possible layoffs at least 60 days in advance.

“While the potential acquiring company has indicated it will offer employment to many of the current Island Air employees, the potential acquirer has indicated it expects Island Air will engage in a right sizing of the Island Air workforce as it transitions to new ownership,” Murashige told employees in the letter. “At this time we do not have enough information to be able to tell you the impact a possible transaction may have on you, other than to provide you with this notice.”

Murashige went on to thank employees for their loyalty and wrote, “We are confident this sale transaction will result in the best chance for the long term viability of Island Air and the greatest employment opportunities of our people.”

Murishege did not respond to Dispatch emails for further comment in time for publication.

Officials at the state Department of Transportation told the Dispatch via email that they could not speculate on the effects of the possible sale of the airlines.

“It is our understanding, through what we have seen in media reports, that negotiations are ongoing and no sale has been finalized,” a spokesperson said.

District 13 Rep. Mele Carroll issued a written statement Jan. 18 that the new ownership will bring positive changes to the airline and the islands it serves, noting Ellison’s purchase of the company.

“The positive impact to the economy and the community could be significant, which would also benefit Mr. Ellison,” she said. “I have not spoken to Mr. Ellison directly, but would welcome any meeting in order to keep the lines of communication open between him and the state.”

Carroll also said she hopes the new ownership brings with it much-needed updates to Island Air aircraft as well as new routes between the islands.

Last July, Island Air announced plans to upgrade its current Dash 8 aircraft in 2013 as part of its rebranding and overhaul. That announcement came in the same month Hawaiian Airlines came forward with plans to offer flights to and from Molokai this year for the first time since 2004.

Island Air has served Hawaii for over 30 years, and Gavearnie Holding, LLC has owned the airlines since 2004, according to islandair.com.

It currently employs more than 250 workers and offers five round-trip flights daily between Molokai and Honolulu and additional flights to Maui and Lanai.