go! ends operations as Island Air acquires new planes
In June, 2006 go! Airlines entered Hawaii's interisland market with a splash by undercutting existing fares and setting off a price war with its competitors.
Eight years later, the discount airline quietly ended service Monday after parent company Mesa Air Group Inc. announced March 17 it would concentrate on mainland operations, where it supports United Airlines and US Airways with regional flights.
"With the significant expansion opportunities in flying large regional jets in contracted service, we are redeploying the go! aircraft to support our existing mainland operations," Jonathan Ornstein, Mesa's chairman and CEO, said in a news release announcing go!'s departure.
Ornstein added the rising price of fuel also played a role in Mesa's decision to pull go! from the Hawaii market, since the cost had more than doubled since go! began service.
Although the basic principle of supply and demand might have some interisland travelers thinking go!'s absence will lead to higher interisland fares, airline industry analyst Peter Forman said that's not the case this time.
"It's not going to change the market much because go! was down to two airplanes and Island Air already had more seats going to and from most of the big destinations," said Forman, who flew 22 years as a commercial airline pilot.
The greater impact on interisland travel may come from Monday's announcement that Island Air is purchasing two Q400 NextGen turboprop planes from Bombardier Aerospace for $60.9 million, with an option to acquire an additional four, which would increase the value of the agreement to $188 million.
The Q400's will seat 71 passengers, fly nearly as fast as Hawaiian Airlines' Boeing 717s and are highly fuel efficient. Island Air hasn't announced which routes the new aircraft will fly, but the carrier already provides service from Honolulu to Kahului, Lanai City and Lihue. Service to Kaunakakai is being discontinued April 1.
Forman explains other carriers were hesitant to enter Hawaii's interisland market with go! still on the scene. Now that go! is gone, an opportunity exists to invest in additional aircraft and the possible expansion of routes.
"Nobody else wanted to spend a lot of money while go! was in the market," said Forman. "Now that go! is leaving, you can see other players such as Island Air are ponying up and getting some pretty nice airplanes. It's going to be a positive."
Island Air's announcement of the new Q400 aircraft comes a few weeks after Hawaiian Airlines launched its Ohana Service with ATR-42 airplanes, which seat 48 people. The service features three daily trips between Honolulu and Molokai, and two daily trips to Lanai.
Some longtime interisland travelers like Sal Alcantara of Kona won't miss go!'s exodus from Hawaii as the airline was constantly plagued by on-time issues. Alcantara and his family were forced to spend an additional two days on Oahu because of go!'s decision to end operations.
"I'm glad they're gone," Alcantara said of go!. "We had to layover two days here in Honolulu, which was not supposed to happen and was not in our plans."
Still, some flyers say go!'s absence will make it more difficult to travel interisland, especially for those who live in hard-to-reach places where flights are already hard to come by.
"Unfortunately, it reduces our options for going off island for work or to visit family," said Koki Foster, a teacher in Kaunakakai. "So in that way, it's really devastating for Molokai I think."
Hawaiian Airlines spokeswoman Ann Botticelli said the carrier would have additional customer service representatives on hand at Honolulu International Airport Tuesday to deal with any overflow from passengers who were booked on go!.
"We'll be standing by so the people who expected to be accommodated will be," said Botticelli.
In March, Hawaiian averaged about 20,000 daily interisland seats and the airline doesn't see capacity becoming an issue with go!'s withdrawal.
Ironically, go!'s final day of operations comes on the same day that Aloha Airlines stopped flying in 2008, March 31. Many analysts blame go! for facilitating Aloha's demise with rock-bottom fares.
"You had Hawaiian matching go! and for that reason Aloha had to match go!," said Forman. "That was something that basically took the money out of the bank."
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