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Island Air to take its last flight after 37 years of service to Hawaii due to legal pressures

Photo Courtesy: Island Air

Hawaii Island Air, Inc. (Island Air) announced today it will be closing operations as of 12:01 a.m. Saturday, November 11, 2017. As a result of this announcement, all Island Air passengers must make alternative arrangements for interisland transportation, effective this Saturday, November 11, 2017. Earlier this month, Island Air was forced to file for Chapter 11 bankruptcy protection in an effort to continue operations following threats of legal action by the Lessors of Island Air’s aircraft to ground and repossess the company’s fleet. Island Air was unable to locate a new investor or lender to provide funding to support airline flight operations and a successful reorganization.

One of the difficulties of attracting new investors was the aggressive legal attacks by Lessors Wells Fargo Bank Northwest, N.A. and Elix 8 Ltd. Although Lessors’ Motion for Temporary Restraining Order was denied by Judge Robert Faris of the District of Hawaii Bankruptcy Court on Friday, November 3, Lessors continued to engage in multi-directional legal attacks which Island Air could no longer combat without additional financing. The aircraft Lessors were seeking termination of all leases and immediate repossession of all aircraft.

“Island Air has taken every measure possible to avoid this tremendous hardship to its passengers,” said David Uchiyama, Island Air president and CEO. “Island Air appreciates the loyalty and support its customers, management, employees, and vendors have shown the airline, especially during the last few weeks of this bankruptcy process. Island Air is proud of its 37-year history of service to the State of Hawaii.”

Governor Ige released a statement saying: “I want to thank Island Air for its decades of service to our communities. For 37 years the company and its employees have played a big role in connecting island families and supporting our business community. The closure will have a tremendous effect on 400 employees and their families, and the state will be working with Island Air to help the employees apply for unemployment insurance and provide assistance with job searches and training opportunities.”

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