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Passengers Being Accommodated On Mokulele

Merger details between go! and Mokulele Airlines have yet to play out

Andrew Gomes  Oct 16, 2009

Passengers booked on go! airlines are being accommodated onto Mokulele Airlines, and that is about all that has been figured out so far with the merger. Jet rebranding, flight schedule adjustments, ticket price increases, and job reductions have yet to play out.

Today, go! Mokulele is increasing flight frequencies with go!'s fleet to accommodate passengers who had been scheduled to fly on one of three Mokulele 70-seat Embraer 170 jets that have been removed from service by Mokulele's parent company as part of the merger.

Passengers flying on the new airline may encounter difficulties with rescheduled flights, though go! Mokulele said adjustments to flight times should only be slight.

In the near future, the new carrier anticipates making roughly 60 flights a day in an effort to reduce the number of empty seats that had plagued go! and Mokulele. Previously, the two carriers were operating 144 daily flights, or 50 for go! and 84 for Mokulele.

"Over the next few days as the dust settles on this, that is exactly what we'll be working hard on — a matched capacity with demand, while continuing to offer a convenient flight schedule,"said Paul Skellon, go!'s vice president.

Jonathan Ornstein, chairman and CEO of go!'s parent company, Mesa Air Group Inc., said it's possible the combined carrier will need to add another plane early next year.

"We're going to see how the market responds," he said. "The general environment is still bad. We need to see how things shake out."

Another unsettled issue is who will lead the merged company, which technically is a joint venture 75 percent owned by Phoenix-based Mesa and 25 percent owned by Mokulele shareholders including majority shareholder Indianapolis-based Republic Airways Holdings.

For the moment, go! Mokulele is being led by Skellon and Mokulele CEO Scott Durgin.

New logos on go! planes are expected to take about a week or so to be applied.

Airline analysts expect ticket prices to rise as a result of reduced competition, which is an assessment go! doesn't dispute. However, go! said present ticket prices remain unchanged.

Hawaiian Airlines said it plans no immediate changes in response to the go!Mokulele deal. "Hawaiian remains focused on its own operations and offering its customers the most competitive service and fares in Hawaii," the dominant interisland carrier said in a statement.

For employees of go! and Mokulele, the future for many is unclear. About 450 workers from five different employers are involved in operations for go! and Mokulele, and it is partly undecided where reductions will come from as redundancies are eliminated.

Some 93 of the workers are employed directly by Mesa, and will remain with the merged company, according to Skellon.

Another 60 people were employed by Republic affiliate Shuttle America to staff Mokulele's three Embraer jets. This crew is expected to follow the jets to the Mainland for redeployment by Republic.

The in-house staff of Big Island-based Mokulele comprised about 120 workers handling all other areas of service, including ticket agents and baggage handlers. Those jobs are in limbo.

A similar scenario exists for 180 employees outsourced by go! for positions including baggage handling, aircraft cleaning and ticket agents.

The contract workers are employees of two companies — Aloha Contract Services representing go! in Líhue, Kauai; Kahului, Maui; and Kailua, Kona on the Big Island; and Swissport International representing go! in Honolulu and Hilo, Hawaii.

Aloha Contract Services began working for go! in January under a one-year contract valued at $6 million and covering 46 flights a day.

In two unfortunate twists, Mokulele and Aloha Contract Services employees whose jobs are in limbo survived the March 2008 shutdown of Aloha Airlines. Many old Aloha employees also work for Mokulele, and resent go! for starting a fare war that helped push Aloha into bankruptcy and out of business.

Pacific Air Cargo, a Los Angeles-based cargo airline, bought the contract services division of Aloha Airlines to preserve operations and save roughly 1,000 jobs. The operation renamed Aloha Contract Services continues to service many airlines, so any loss of business from go! might be absorbed elsewhere.

Swissport also services many airlines. Representatives of both contract companies could not be reached yesterday.

Skellon said no decisions have been made regarding employees of Swissport, Aloha Contract or Mokulele. "That's an evaluation that's starting immediately, but no determination has been made on that," he said.

Merger details between go! and Mokulele Airlines have yet to play out
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