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HONOLULU (HawaiiNewsNow) -
A year after buying the island of Lanai and four months after purchasing Island Air, software billionaire Larry Ellison is in talks to purchase another interisland air carrier, go! Airlines.
"We are committed to building a strong regional airline and part of that process is exploring all options including discussions with Mesa Air," Paul Casey, the CEO of Island Air said in a statement. The Phoenix, AZ, based Mesa is the current owner of go!
Go! began service in Hawaii in 2006. Most of that service has been turbulent. "Go! has fallen on hard times," said HNN business reporter Howard Dicus. "It's original business plan, if court documents are to be believe,d is that they were going to sell tickets at a loss, set off a fare ware, cause Hawaiian and Aloha to go through all their cash, and drive Aloha, which had the least cash, out of business."
Aloha Airlines went out of business in 2008. But go! did not become competitive in the interisland market. It began with five Bombardier CRJ-200 regional jets, which carry 50 passengers each. It now has a fleet of just two aircraft. Meanwhile, Dicus said Hawaiian Airlines is even more dominant, with 85 percent of the interisland market.
"Some airline was bound to come in and become the second airline interisland. And I think Ellison may be making a play to become the second serious interisland airline to compete against Hawaiian," said local airline analyst Peter Forman.
Purchasing go! could also ensure that Ellison could bring more visitors to Lanai. "It sounds like he's taking steps to make sure that his resorts can get traffic by making sure that it's not too hard to get to the Pineapple Isle," said Dicus, who added that the regional jets can land on Lanai's airport runway.
However, Dicus and Forman also believe Ellison should replace the jets with another aircraft. "It found that it made a mistake in having regional jets that don't have a lot of storage space," said Dicus. "When people are on vacation they have a lot of bags, and that's a continuous problem for go!"
"So maybe he wants to fly jets to Lanai, but that 50 passenger regional jet that go! flies is a very expensive jet to fly," said Forman.
Forman also said that the airline's name itself has a lot of baggage. "So many of the people in Hawaii, after Aloha disappeared, said, 'I'm never going to fly go!' So one of the first things that Island Air needs to do, if it's a consolidation between those two companies, is to get rid of the name."