A Mokulele Airlines plane sits on the runway of Kahului Airport in February 2018. Mokulele was purchased by Southern Airways. The Maui News / MATTHEW THAYER photo

Mokulele Airlines has been acquired by Southern Airways, a deal that both companies hope will bring more interisland flights in the future.

“We are already starting to sharpen our pencils,” Mokulele President Rob McKinney said. “Our first expansion looks like it might be Kauai.”

Mississippi-based Southern Airways announced the deal on Tuesday, making the combined entity the largest commuter airline in the U.S.

Stan Little, Southern’s chairman and chief executive officer, said that the company had been looking at “several potential acquisitions over the last couple of years,” and that Mokulele was “the perfect complement.”

“We fly the same aircraft type, we have similar operational structures and their assets and revenue streams help diversify our balance sheet,” Little said. “This acquisition will give the newly combined company stability in an otherwise volatile marketplace, while making Southern Airways a nationally recognized brand.”

In 2013, Southern began offering flights from Memphis, Tenn., to Destin., Fla., with four pilots and three aircraft. In 2015, the airline acquired Illinois-based Executive Express Aviation, which was previously contracted to operate Southern’s flight schedule, and in 2016 it acquired Sun Air Express, a commuter airline operating Essential Air Service contracts in the mid-Atlantic. In November, Southern launched service between Palm Beach, Tampa and Key West. The airline now offers 600 weekly flights across 20 cities.

The combined entity of Southern and Mokulele will operate 1,380 weekly flights, more than any other commuter airline in the U.S. Together, they will have about 550 employees, said Keith Sisson, chief marketing officer for Southern.

McKinney said nothing much will change — flight schedules and prices will stay about the same, no employees will be cut and everything from the paint on the planes to the uniforms of the pilots will remain the same. Southern said that unlike its previous two acquisitions, Mokulele will keep its branding.

“Really, this is a financial transaction that is going to have very little impact on the employees, the customers and the passengers,” Sisson said.

Sisson explained that Southern’s operations are about the same size as Mokulele’s, “but we’re not quite big enough to get a lot of attention and help from the major international carriers that are bringing many people into the Hawaiian Islands.” By combining with Mokulele, Sisson said the company hopes to add more interline and baggage agreements with big carriers.

Southern currently has interline agreements with American Airlines and Condor Airlines, while Mokulele has agreements with Alaska Airlines and Air New Zealand. These allow customers to more easily book flights with connections, Sisson said. For example, if someone wanted to book a flight from Phoenix to Honolulu with a connection to Hana using Mokulele, they could do it all through a single airline’s site and have their baggage transferred to the right plane.

“That’s one of the big advantages of having an airline the size we are now that these companies are combining,” he said. “You have to think at it from the position of a legacy carrier. It may not be worth their time to go through the effort and expense of partnering with an airline that only has a certain number of flights. But now we can really bring them good value because we have so many weekly flights.”

With the acquisition and with Mokulele now entering its 25th year, Mokulele founder Rebecca “Kawehi” Inaba will return as the company’s community relations adviser, Little announced. Inaba became the first Native Hawaiian woman to start an airline when she founded Mokulele in 1994. The airline was later purchased by William Boyer Jr. in 2005 and then sold to Mesa Air before being acquired by its latest owner, Transpac Aviation Inc.

Mokulele has 15 aircraft and operates 787 weekly departures out of 11 cities, including four Essential Air Service communities — Hana, Kalaupapa, Waimea-Kohala and Imperial, Calif. These are hard-to-reach communities that the government subsidizes airlines to service. Mokulele’s contract for Hana expires in November, and McKinney said the airline “absolutely” plans to seek a renewal.

Within the next three to six months, the newly combined company plans to make an announcement “of a new destination not presently offered by Mokulele,” Sisson said. More frequent interisland routes could be on the horizon, including more direct flights from Kahului to Honolulu, McKinney said.

McKinney added that the impact of Southwest Airlines’ eventual entrance to the Hawaii market “remains to be seen.”

“You just never know until the dust settles,” he said. “Mokulele started in 1994 and has operated continuously, when there’s been five competitors in the market, and now when there are two competitors in the market. We welcome Southwest, and we know there’s always going to be a place for Mokulele.”

When asked how Southern could help ease the impact to the islands with potentially more flights and passengers, Sisson said, “I think the biggest help we can do is get them out of here once we bring them in.”

“Outside of that, we’re always interested in being a community partner,” Sisson added. “Everywhere we operate, we are very involved in the community, and we look to continue that here as well.”

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