Airline receives millions in subsidies from the government under strange circumstances

Another important development this week is that Mokulele Airlines, an inter-island airline in Hawaii, is still dealing with significant flight disruptions after part of its fleet was grounded for a routine maintenance inspection. We heard from someone on Molokai today who has been waiting nearly a week to leave the island until the situation hopefully passes.

It is interesting that Larry Ellison owns 98% of Lanai and yet has not stepped in to help in this way.

Now, it has been announced that the airline will receive approximately $8 million in federal grants from the U.S. Department of Transportation (DOT) to provide basic air service (EAS) to the island of Lanai over the next two years. This development underscores the critical role that Mokulele continues to play in connecting Hawaii’s smaller islands, but also raises concerns about the airline’s operational reliability.

Previously, the service was offered by Hawaiian Airlines subsidiary “Ohana”.

Hawaiian Airlines had previously ended the suspension of “Ohana by Hawaiian” service, which included passenger flights between Honolulu and Molokai and Lanai. The decision followed a sharp decline in travel demand during Covid, as well as the high costs and logistical challenges of resuming service as the main reasons for the suspension.

Federal subsidies for important air connections to the island, which is 98% owned by Larry Ellison.

The U.S. Department of Transportation awarded Mokulele an annual grant of approximately $4 million for the next two years to ensure uninterrupted air service to Lanai.

The mostly privately owned island has limited transportation options. Federal funding will allow Mokulele to operate more than sixty weekly flights to Honolulu and Maui. This will be the first time in forty years that there will be EAS-supported flights to and from Lanai.

Operational disruptions and impacts.

Despite government support, Mokulele Airlines remains under scrutiny for its recent operational problems. The grounding of flights following the discovery of discrepancies in landing gear maintenance documents has caused significant disruption to the airline’s schedule and to its passengers, which include residents and visitors traveling to and from Molokai and Lanai. Residents rely heavily on these flights to attend medical and other appointments not available in their rural medical systems.

Reports continue to emerge of stranded passengers still waiting for flights to resume. Mokulele has tried to accommodate the situation and the special needs of travelers, although this has not done much to ease the burden of the current outage.

Community concerns and USDOT accountability measures.

The airline’s lack of reliability has particularly angered the communities that Mokulele serves. The U.S. Department of Transportation is aware of both the need to keep Mokulele operating and the numerous complaints that preceded the award.

Due to its recognition as an EAS carrier, USDOT will require Mokulele to submit additional monthly performance reports as part of its enhanced oversight of the airline.

A look at federal funding and future control of Mokulele.

The combination of new subsidies and additional controls underlines the importance of the airline in maintaining flights to the island. We can only hope that the airline will soon be able to offer full service again and regain the trust of the population.

We look forward to your input!

Photo by Beat of Hawaii, taken at Three Sisters off Lanai.