Lanai Is Getting Subsidized Air Service– What About Molokai?

For the first time, the community of Lanai will be getting subsidized flights through the federal Essential Air Service (EAS) program.
The U.S. Department of Transportation’s EAS program was established in 1978 to ensure small or underserved communities maintain adequate transportation to larger hubs. The program offers subsidies, if needed, to air carriers on a per-flight basis.
Lanai and Molokai were determined as EAS airports in 1983 but in the program’s more than 40 years, no airline has requested a subsidy to either island – until now. Both airports have operated under the “basic” EAS program, in which the U.S. DOT holds no contracts with airlines as long as a required level of air service continues to be offered.
But Lanai is about to see a change.
Last December, Mokulele Airlines – operated by mainland-based parent company Southern Airways – submitted a letter of termination of service to Lanai.
“It is with great regret that Southern Airways, d.b.a. Mokulele Airlines, submits a 90-day notice for termination of unsubsidized Essential Air Service at Lanai, Hawaii,” wrote Mokulele’s Chief of Staff Keith Sisson in the letter to the U.S. DOT. “Rising costs and stagnant market demand have caused unsubsidized air service on the island to remain perpetually unprofitable.”
But Sisson said the airline doesn’t actually plan to stop flying to the island, it just needs a subsidy to continue.
“Lanai qualifies for subsidized air service, and we are simply asking the U.S. Department of Transportation to pull that lever and allow us to turn those flights into subsidized flights from the DOT, so that we can keep the fares at the historical levels for the local traffic,” he said. “But at no point will there be a lapse of service for anybody on Lanai.”
In response to Mokulele’s notice of termination, the U.S. DOT issued a request for proposals for subsidized — or unsubsidized — service to Lanai.
Lanai’s EAS Options
The deadline for airline proposals was April 2, and two airlines submitted bids: Mokulele and Pacific Air Charters.
Pacific Air Charters is a Honolulu-based company started in 2003 by a group of airline pilots who wanted to teach their kids how to fly and then went on to become airline pilots themselves, said Pat McNamee, the company’s chief operating officer and director of operations. They have operated as an on-demand charter service in Hawaii and also fly some military contracts.
McNamee said Pacific Air Charters is ramping up for increasing charter services with four new Tecnam Traveler aircraft. The nine-seat, twin engine aircraft are safer to fly over water than single-engine planes, he said. With more of those aircraft additionally on order, McNamee said his company plans to have 25 Tecnams in service.
“We have the perfect airplane. We are the most experienced pilots,” he said. “We’ve got the financing in place… we’ve paid cash for all four of [the Tecnams]. We made the $15 million investment. And it’s going to be an additional $85 million to get the rest of the airplanes.”
McNamee said supporting their local business also means keeping money in Hawaii.
Mokulele says it also has two Tecnams coming into service soon.
For the Lanai EAS proposals, Mokulele is requesting a subsidy of between $3.5 and $4 million under several operating scenarios, while Pacific Air Charters is proposing around $8 million in subsidy for their service.
Pacific Air Charter’s proposal also included letters of support from Mayor Richard Bissen, Rep. Mahina Poepoe and others.
The U.S. DOT is currently accepting comments on the Lanai EAS proposals until May 3. After that, the department will select an airline for the contract, based on factors including subsidy amount and community feedback.
What about Molokai?
Could Molokai also get subsidized air service?
The same scenario that took place on Lanai could technically happen for Molokai – but it’s unlikely.
Mokulele would have to provide a notice of termination – either as a formality to request a subsidy, or because they would no longer fly to the island — and the airline has no plans to do either.
“We want to remain in the spirit of the program, and the spirit of the Essential Air Service program is that they will provide subsidy to airports that would otherwise not have service,” said Sisson.
Because of Molokai’s flight volume, “I don’t see Molokai ever having a subsidy,” he added.
However, because Molokai is an EAS airport, “communities can petition the Department if there are concerns about the service, which could result in the Department initiating an air carrier selection case by issuing a request for EAS proposals to serve the community, with or without subsidy,” according to a U.S. DOT spokesperson.
In 2021, following the withdrawal of ‘Ohana by Hawaiian’s service to Molokai and Lanai, the U.S. DOT wrote a letter to then-Mayor Victorino reaffirming the government’s commitment to ensure air service.
“We are writing you to remind you that, while the Department does not hold a contract with your air carrier outlining service to a specific hub airport, frequency of service, or aircraft type, we are available to hear any concerns, and answer any questions, your communities have about your basic EAS,” states the 2021 letter from Kevin D. Schlemmer, Associate Director of EAS and Domestic Analysis Division. “In addition, communities receiving unsubsidized EAS are also able to petition the Department regarding issues with basic EAS.”

According to U.S. DOT documents, “basic EAS requirements guarantee eligible communities a minimum of 12 weekly, scheduled round trips, ordinarily to a hub airport, using twin-engine aircraft.”
When ‘Ohana by Hawaiian requested the U.S. DOT to discontinue service to Molokai and Lanai in 2020, their request was granted because Mokulele wrote a letter to the department pledging to fill the gap.
“Mokulele submitted a filing supporting Hawaiian’s notice, affirming that it is prepared to increase service at both communities in order to replace the EAS provided by Hawaiian,” states a 2020 U.S. DOT document. “Subsequently, the president of Southern Airways Express LLC indicated that Mokulele can deploy twin-engine aircraft at Lanai and Molokai to meet basic EAS requirements, with service to Maui and Honolulu.”
So as long as Mokulele continues to fly to Molokai, no changes will be triggered federally.
In the meantime, community members with concerns about air service in relation to Molokai’s EAS status can email EAS@dot.gov.