Island Air, the Hawaii interisland carrier owned by Oracle founder Larry Ellison, will cut its workforce by 20% and make a substantial reduction in service across the state beginning June 1.

The airline lost $21 million last year, according to an April 30 letter to employees and customers from the carrier’s CEO Dave Pflieger.

Pflieger added that consolidating to fewer markets will help improve the company’s cost and revenue structure, and will hopefully “pave the way for a brighter future for Island Air in the tomorrows that lie ahead.”

Island Air will end its Kauai operations and reduce its Honolulu-Maui service on June 1. The airline has also canceled plans to acquire new Bombardier Q400 aircraft.

“We always knew that to remain Hawaii’s No. 2 airline in the face of overwhelming competition from another local airline, which is 60 times our size in revenue and controls nearly 90% of the intra-island market, would not be without its challenges,” Pflieger said, referring to Hawaiian Airlines.

Ellison, who owns 98% of the island of Lanai, purchased Island Air in 2013.

 

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