Mokulele seeks subsidy for Hana service

But the future of the Essential Air Service program is unclear

Mayor Alan Arakawa (right) and state Sen. J. Kalani English were part of the festivities marking the first Mokulele Airlines flight into Hana Airport on Oct. 1, 2012, as part of a partnership with Travaasa Hana. On Aug. 22, the airline issued a notice with the U.S. Transportation Department that it plans to end nonsubsidized flights to Hana in 90 days in an effort to get the ball rolling on obtaining federal subsidies for the flights. -- The Maui News / MATTHEW THAYER photo

Mayor Alan Arakawa (right) and state Sen. J. Kalani English were part of the festivities marking the first Mokulele Airlines flight into Hana Airport on Oct. 1, 2012, as part of a partnership with Travaasa Hana. On Aug. 22, the airline issued a notice with the U.S. Transportation Department that it plans to end nonsubsidized flights to Hana in 90 days in an effort to get the ball rolling on obtaining federal subsidies for the flights. -- The Maui News / MATTHEW THAYER photo

Mokulele Airlines, the only company that offers flights in and out of Hana, is seeking to have the federal government subsidize flights to the East Maui community.

The airline has been servicing Hana since 2012. On Aug. 22, it sent a notice to the U.S. Department of Transportation that it plans to end nonsubsidized flights to Hana within 90 days. But Mokulele President Rob McKinney explained that the airline isn’t going anywhere; the notice is just the first step toward getting a subsidy.

“We just want everyone to understand that this is just the governmental process,” McKinney said Tuesday. “We’re dedicated to Hana, and we want to continue to serve that community out there.”

Now that Mokulele has notified the federal government, the department will put out a request for proposals to service Hana. Mokulele intends to bid on that, McKinney said. In the meantime, the department will require the airline to continue flying to Hana.

McKinney said that the goal “is to bring Hana back into the fold of the Essential Air Service program.” In 1978, Hana was one of nine Hawaii communities deemed eligible for the federal program, which helps fund transportation to hard-to-reach communities. Since then, many airlines have come and gone at the Hana Airport.

A Mokulele Airlines Cessna Grand Caravan is seen taking off from Kahului Airport in April 2014. The airline is seeking government subsidies for service to Hana Airport. -- The Maui News / MATTHEW THAYER photo

A Mokulele Airlines Cessna Grand Caravan is seen taking off from Kahului Airport in April 2014. The airline is seeking government subsidies for service to Hana Airport. -- The Maui News / MATTHEW THAYER photo

The last subsidized carrier was Pacific Wings, which the department selected in 2002. Trying to ease its reliance on federal funding, Pacific Wings offered to service Hana, Kalaupapa and Kamuela on a subsidy-free basis starting April 1, 2007, according to a department order from 2006. But the company folded in 2013.

Hana has “been eligible this whole time,” McKinney explained. “They’ve just not been participating in the program.”

Mokulele offers 1:34 p.m. and 5:35 p.m. flights daily from Hana to Kahului that take about 20 minutes and start at $48 one way, according to the airline’s website. Hana residents can also fly to other islands via Kahului.

To help support flights, Mokulele has had a cost-sharing agreement with Hana businesses.

“They would help us make up the difference if it was at a loss,” McKinney said. “A lot of local businesses rely on tourists being able to get there easily and experience the city without taking the road.”

However, that agreement is coming to an end. McKinney said it was a private deal and could not provide details, including how many businesses had been involved.

“Different economic forces changed for them as well,” McKinney said. “We appreciate the partnership we’ve had over the years.”

In 2012, Travaasa Experiential Resorts announced on its website that it would partner with Mokulele to provide travelers better access to the resort. Travaasa offered complimentary flights for guests who booked a three-night, all-inclusive Total Travaasa package. Manager Marni Aina could not comment on the agreement but said that the hotel continues to offer flight package deals for customers.

“Our guests rely on those flights regularly, and we hope that the service will continue,” Aina said. “We love working with them. They’ve provided a valuable service not only to our guests, but to our community.”

‘A lifeline’ to Hana

Nothing is expected to change while Mokulele continues offering flights to Hana and bids for the subsidized program, McKinney said. If Mokulele gets a contract, “prices would probably stay about the same. What probably would increase is frequency and destinations.”

Maui County Council Member Bob Carroll, who holds the East Maui residency seat, welcomed that. He remembered many years ago when the Royal Hawaiian Air Service offered about 20 flights a day in and out of Hana.

“Our transportation needs were well met,” Carroll said. “When they went, we never had anywhere near those services. . . . I’d like to see something similar to that come back.”

Hawaiian Airlines later offered daily flights at noon but eventually left, too, Carroll said. That’s why the lawmaker would “strongly support a subsidy.” Driving two hours to catch a flight from Kahului and paying $15 a day to keep a car at the airport is “cumbersome, and it’s expensive,” he said.

“There’s so many people that really depend on it,” Carroll said. “And of course, our hotel, we want it to stay viable. It’s the biggest employer in Hana.”

Clayton Carvalho Jr., operations manager with Hana Ranch, said that air service is “a lifeline” in a town that needs alternate sources of transportation. The curving, two-lane Hana Highway is prone to landslides and closures, and is well-trafficked by residents and tourists. Carvalho said the ranch relies on flights weekly, whether its employees are flying to Kahului or visitors coming in.

“It just eliminates a lot of the logistics and a lot of the planning because it’s 15 minutes versus a two-hour drive,” he said.

Carvalho is “fully in support” of subsidizing flights.

“I’m a basketball coach here (at Hana High), and even hearing about what happened with the Molokai ferry, I hope we don’t have to go down that road,” Carvalho said. “I hope it’s an easy negotiation to get it subsidized.”

Aina said that flights to Hana are a way to “sustain our tourism economy without creating more traffic on Hana Highway.” She said about two to four guests fly in daily to stay at the hotel, which employs close to 100 people.

“For guests that just want to get back and forth quickly without renting a car, it’s a great option,” Aina said. “We travel such a long distance anyway. That (short) flight is amazing for residents. You can’t beat it.”

McKinney said Mokulele wants to continue servicing Hana, “but we need assistance to make sure it’s a viable economic endeavor.” He said it wasn’t falling ridership that prompted the decision. The route has simply “never been sustainable.”

“Without any kind of cost sharing or subsidies, it would not hold its own economically,” McKinney said. “That’s why we have the cost-sharing relationship with the businesses because there was never enough traffic to cover the cost to fly the flights.”

In 2016, Mokulele flew 3,881 passengers to and from Hana. So far in 2017, the airline has flown 2,826. McKinney estimated that ridership is split at about 60 percent visitors and 40 percent residents.

Interest from Makani Kai

Makani Kai Air owner Richard Schuman said Wednesday that if the U.S. Department of Transportation puts out a request for proposals to service Hana, his company would “absolutely” bid on it.

The department subsidizes Makani Kai to service Kalaupapa and Mokulele to service the Waimea-Kohala Airport under the Essential Air Service program, according to an announcement from the office of U.S. Sen. Mazie Hirono, who is fighting proposed cuts to the program.

Makani Kai receives $710,656 to fly to Kalaupapa, and Mokulele gets $417,310 for flying to Waimea, according to a Congressional Research Service report. Not including Alaska (which has 61 communities totaling $20.9 million a year), those were among the five smallest annual subsidies in the country as of Feb. 1.

But the future of the Essential Air Service program is unclear after President Donald Trump’s proposed budget eliminated $175 million in program funds for the upcoming fiscal year. In May, Hirono and Republican Sen. Dan Sullivan of Alaska introduced a measure — co-sponsored by U.S. Sens. Brian Schatz of Hawaii and Lisa Murkowski of Alaska — that would reauthorize program funding through 2022. The bill is in committee, according to congress.gov. So far, lawmakers have opted to keep funding in the budget.

Schuman said he’s not concerned about the program’s future.

“No sense worrying about something you have no control over,” he said.

If, in the end, Mokulele can’t get flights subsidized, would the airline stop offering trips to Hana?

“We’d have to determine that internally,” McKinney said.

* Colleen Uechi can be reached at cuechi@mauinews.com.

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