Hawaii interisland carrier Island Air has announced plans to discontinue service to the island of Lanai March 31.


Oracle founder Larry Ellison, who purchased 98% of Lanai for a reported $300 million in 2012, bought Island Air outright in 2013, but he sold controlling interest of the airline to a group of Hawaii-based investors in January.

“It was a difficult decision,” Les Murashige, the current CEO of Island Air, said in a March 1 statement. “However, as Island Air continues to restructure, we are taking a hard look at all of the destinations we serve and where our resources are best deployed.”

Island Air currently operates two daily flights between Honolulu’s International Airport and Lanai City, both featuring stops at the airport in Kahului on Maui. The airline said the 11 members of its Lanai-based staff will be offered an opportunity to transfer elsewhere within the company.

Adhering to a previously announced service boost, Island Air will begin three nonstop, daily flights between Honolulu and Lanai March 15 before discontinuing flights to the island entirely at the end of the month, according to a company official.

“Lanai is more than adequately serviced right now by Ohana [by Hawaiian],” Murashige told Travel Weekly, referring to flights operated by Hawaiian Airlines’ turbo-prop division.

“They have four flights into Lanai right now,” he continued. “And the demand for Lanai right now would not sustain both Ohana flying as well as our flying.”

Still, Island Air’s decision to end its Lanai service comes as a surprise, especially after the oceanfront Four Seasons Lanai property, owned by Ellison, reopened to guests Feb. 1, following a multimillion-dollar renovation to all of its guestrooms and a major overhaul of restaurants, public areas and the addition of new pools.  

Murashige refuted the notion, however, that Ellison had no input in Island Air’s decision to end flights to Lanai, saying that the billionaire Oracle founder “is still a minority shareholder but very much in any decisions that we make.”

“They [Ellison and his representatives] totally understand what we’re doing and support what we’re doing,” Murashige added.

Murashige also wasn’t alone in asserting that Lanai will have sufficient airlift following Island Air’s departure.
“Four Seasons Resorts Lanai respects the decision of Island Air to determine their interisland flight schedules,” Lori Holland, a spokeswoman for the property, said in a statement. “We do not believe the cessation of service to Lanai will have any impact to our business levels as Ohana by Hawaiian Airlines services our island destination and provides an adequate flight schedule.”

Island Air, meanwhile, will restore nonstop flights between Honolulu and Kauai’s Lihue Airport March 15 and plans to boost Maui service in coming months, according to Murashige, who added that the carrier hopes to open a new market later this year.

“We’re trying to get into the Big Island hopefully before summer,” he said.    

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