An Island Air ATR 72-212 on final to Kahului Airport.
The promise of “a new day at Island Air” finally started to become a reality in 2016 after several years of ongoing disappointment.
The regional carrier once known for its revolving door of executives—it’s had five CEOs in the past six years—has finally gained management stability, begun repairing its broken relationship with pilots, and is on the verge of a major expansion that will substantially improve its fleet and potentially double the size of its pilot workforce in 2017.
“It’s been a momentous year for sure,” said Capt. James Morris, the pilots’ Master Executive Council (MEC) chairman. “We enthusiastically support 100 percent the path our new management is taking, and we’re looking forward to continuing the turnaround and growth of our airline in 2017.”
Island Air was on the verge of shutting down in 2013, when software billionaire Larry Ellison bought the carrier with an eye toward using it to shuttle guests from Oahu to his upscale resorts on the island of Lanai. Ellison’s managers abandoned virtually all of the carrier’s other routes, and Island Air racked up huge losses.
Ellison’s plan to replace the airline’s old and unreliable fleet of ATR 72s stalled, with a pair of Bombardier Q400s sitting unused in a hangar on the mainland even though some of the pilots had already been trained to fly them. Management tried to back away from the pay raises it had promised in the letter of agreement (LOA) that brought the new aircraft onto the property, and grievances started to pile up. Morale plummeted, and the MEC began encouraging pilots to explore moving on.
“Sixty percent of the group departed in just six months, and we were well on our way to going out of business,” Morris said.
Then in January 2016, Ellison sold a majority interest in the airline to a group of local investors. Three months later, CEO David Uchiyama, a former executive with the Hawaii Tourism Authority, was hired and immediately began mending fences with employees. The new owners began to refocus the airline and began rebuilding service to its core markets on Kauai, Maui, and the island of Hawaii.
Under Uchiyama, the company reached agreement on a contract extension that significantly increased pilot pay while favorably settling all grievances and pending arbitrations. Island Air now has the fifth-highest starting pay among the 18 regional carriers operating in the U.S. In accordance with the pilots’ contract, the airline offers substantial retention bonuses for existing employees as well as relocation and retirement bonuses that boost new-hire total pay to more than $47,000 per year.
In July, another major piece of the airline’s renaissance fell into place when the pilots and the company agreed to a new aircraft transition LOA that will replace Island Air’s five ATR 72s with at least seven Q400s by mid-2017.
The newer, larger fleet should almost double the size of the pilot group and allow the airline to continue expanding its service. And thanks to CEO Uchiyama’s investment in his pilot group, Morris believes Island Air can be a competitive player in the tightening pilot marketplace.
“Our new contract is already paying dividends with pilot retention and recruitment, and we expect more good things to come,” commented Morris. “Our new owners have done a complete 180 from the past 18 months, and it’s amazing what wonderful things can happen when pilots are treated as part of the team.”