Facing “significant costs” and a Neighbor Island market that has yet to recover, Hawaiian Airlines announced that it will permanently end its ‘Ohana by Hawaiian passenger service between Honolulu and Molokai and Lanai along with statewide cargo service.

Hawaiian Airlines President and CEO Peter Ingram said in a statement on Thursday that bringing ‘Ohana service back is “economically unsustainable with the current fleet and business model.”

“With our focus on rebuilding and restoring our mainline interisland, North America and international service, we cannot responsibly justify incurring the startup costs and weakening our financial outlook,” he said. “We do this as stewards of our company, with a firm eye on ensuring that Hawaiian Airlines is positioned to not only survive but thrive as we exit the pandemic.”

Hawaii has been seeing a steady increase in visitor arrivals that has boosted the travel industry, including Hawaiian Airlines, which has been rebuilding its network and recalling nearly all furloughed employees. The company announced earlier this week that it is seeking to fill more than 400 positions and offering a $2,000 bonus for most positions on Maui, where the need for workers is especially great.

However, the signs of economic improvement haven’t been enough to keep ‘Ohana service alive.

“While we have seen a strong recovery for our North America routes, Neighbor Island and international demand continues to be suppressed by travel restrictions,” Hawaiian Airlines spokesperson Alex Da Silva said.

Prior to the pandemic, ‘Ohana offered up to 30 flights daily, which put a financial strain on the business, but “we maintained it to provide a reliable air transportation option to Molokai and Lanai,” Da Silva said.

“That strain was intensified during the pandemic with the severe drop in travel, especially Neighbor Island travel, caused by quarantine and pre-travel testing requirements,” he added.

Hawaiian Airlines tried to maintain essential services and supported new needs that arose from the sudden disruptions of deliveries due to COVID-19. However, operations were suspended in January and the company has since begun moving turboprop aircraft to the Mainland for long-term storage, maintenance and eventual sale. The company said it has lent some of its ground support equipment to Mokulele Airlines.

“This outcome is a disappointment not only for all of us, but for the communities that we hold dear on Molokai and Lanai,” Ingram said. “But it is important to make some difficult decisions in order to preserve our long-term sustainability. Thank you for your ongoing support of our company, and for all you do for Hawaiian Airlines.”

‘Ohana was operated by Idaho-based Empire Airlines as a third-party feeder carrier, according to Hawaiian Airlines. When service was at its peak, Empire employed 82 pilots, flight attendants and maintenance personnel in Hawaii, as well as 15 in Idaho. All 97 employees were dedicated to the ‘Ohana operation.

Contractor Worldwide Flight Services, meanwhile, employed a staff of 28 to provide ground handling services. All other ‘Ohana operations were managed by Hawaiian Airlines employees, who will be reassigned to other areas of the company, the airline said.

Since it was suspended in January, ‘Ohana service to Molokai and Lanai “has been sorely missed,” especially because it was the only option for residents who use wheelchairs or those needing physical assistance to travel off island, said state Rep. Lynn DeCoite, who represents East Maui, Molokai and Lanai.

“While I am grateful that they served our communities for the past six years, even to their economic detriment, I am sad to hear today’s announcement,” DeCoite said in a statement on Thursday.

With the easing of COVID-19 regulations and the start of the intercounty vaccine passport program, ensuring viable travel options “is paramount” for Molokai and Lanai residents needing to travel for medical care or to see family, DeCoite said, adding that “options are minimal” and “we do want to get island hopping again.”

While the ‘Ohana operation ended, Ingram said that Hawaiian Airlines is still working on other ways to support Molokai and Lanai communities.

“We may not be able to serve them in the same way, but they are important to us, and we will explore partnerships and leverage our understanding of the market to assist where we can,” he said.

Da Silva said that the airline looks forward to returning in the future if the opportunity presents itself.

“As economic conditions improve and demand for Neighbor Island travel increases, we will continue to explore long-term solutions to resume connectivity to Molokai and Lanai,” he said.

Mokulele Airlines, now the lone air travel option for the two islands, is “prepared to immediately bring more flights to Molokai and Lanai as the demand is needed,” said Keith Sisson, Mokulele chief of staff.

Additional daily flights will be added to this Tuesday’s schedule, which “brings our peak-day departure to 134 statewide,” Sisson said. Mokulele recently tacked on two additional flights to Molokai on Memorial Day, he said.

Sisson said that Mokulele is not increasing fares for the holiday weekend.

“People traveling to Molokai or Lanai are paying the same fares as they would on any other day of the year,” he said. “We are committed to serving the Neighbor Islands with the same level of safety, reliability and affordability as they received for many years from ‘Ohana by Hawaiian.”

The airline announced earlier this month that it will bring a 19-passenger, Beechcraft 1900 aircraft to Hawaii to begin service in the fall, with an initial schedule of two round trips to Honolulu from Molokai and Lanai most days of the week. The larger aircraft can accommodate limited mobility passengers and will be available for specialty charters like high school athletic teams traveling to other islands.

Maui County Council Vice Chairwoman Keani Rawlins-Fernandez, who holds the Molokai residency seat, told The Maui News on Thursday evening that she wasn’t surprised by Hawaiian Airlines’ announcement.

“Molokai is a resilient community, and I’m grateful to Mokulele Airlines for taking the initiative to fill in the gaps left by Ohana’s absence with their purchase of a 19-passenger plane with weekday service to Molokai that can accommodate more of our community members, including those in wheelchairs,” Rawlins-Fernandez said.

Mayor Michael Victorino said that he hopes to see the program resume one day.

“Sadly, pandemic-related financial hardship and difficulty in hiring essential personnel led to this difficult decision,” Victorino said in a statement on Thursday. “Hawaiian Airlines has been a good partner for the Neighbor Islands, and I’d like to believe the airline can return someday in the future.”

* Dakota Grossman can be reached at dgrossman@mauinews.com.