Republic Airways Holdings, the majority shareholder of Mokulele Airlines, and Mesa Air Group, the parent company of Go Airlines, entered into a joint venture on Oct. 15, creating the second-largest interisland airline in Hawaii.
Under the terms of that agreement, Mesa will own 75% of the operation, while Mokulele shareholders will own the remainder.
In an Oct. 13 statement announcing the deal, Mokulele CEO Scott Durgin suggested the current state of Hawaii's economy compelled his company to pursue the new partnership.
"Mokulele's mission has always been to provide affordable, reliable interisland air service to both local travelers here in Hawaii and to the many who come to visit this beautiful state," Durgin said. "Unfortunately, the global economic crisis has dramatically decreased air travel and tourism, and these effects have been sorely felt in Hawaii. The agreement will allow us to continue offering a low-fare schedule, one that is appropriate to the level of demand in the market today."
Durgin elaborated on those comments via email with Travel Weekly on Oct. 20.
"Mokulele entered the Hawaii market in a tough economic climate, and though we weathered it well, both Mokulele and Go were not operating at sustainable levels," Durgin said.
None of the statements announcing the partnership used the word "merger," and Durgin said that was intentional.
"The joint venture is to preserve the brand recognition of both Mokulele and Go," Durgin told Travel Weekly. "We want to let the customers know that we're not leaving them but adapting to market conditions to better serve their air travel needs."
When asked how the joint venture would impact Mokulele's 160 employees, Durgin said the company's staffing needs were still under evaluation.
"We have had to temporarily furlough 63 Mokulele employees; however, we are in the process of an internal assessment to determine the extent of our human resources requirements," Dugin said. "We have committed to completing that assessment in short order. In the meantime, the company has committed to covering the employee cost portion of those enrolled in its health insurance plan so that none of our associates, or their families, will risk a lapse in coverage."
Ultimately, Durgin seemed to have a pretty straightforward message for folks looking to travel between Hawaii's islands.
"Our intent in this venture is to create a stronger, more financially viable business which will provide customers with affordable airfares and reliable service," Durgin said. "Travel agents and independent travelers alike should see this joint venture positively, because both Mokulele and Go each have combined ticketing, baggage and codeshare agreements with other airlines to improve the ease of traveling and booking convenient travel."