Southern Airways Acquires Mokulele Airlines

Southern Airways, operator of 600 weekly flights across 20 cities, has acquired Hawaiian-based Mokulele Airlines. The deal is Southern’s third in the last four years, firmly cementing itself as America’s fastest growing airline.

With established footprints in the Gulf South, the mid-Atlantic, and South Florida, Southern now adds Hawaii and California to its portfolio. Following the integration of the two airlines, the combined entity will operate 1,380 weekly flights, more than any other commuter airline in the 50 states. Terms of the acquisition have not been disclosed.

Southern began in 2013 by offering flights from Memphis, Tenn. to Destin, Fla. using a total of four pilots and three aircraft. In 2015, Southern acquired Executive Express Aviation, the Illinois-based charter company that was previously contracted to operate Southern’s flight schedule. In February 2016, Southern acquired Sun Air Express, a commuter airline operating Essential Air Service (EAS) contracts in the mid-Atlantic. Today, Southern still operates routes in those original Sun Air-served Pennsylvania and Maryland communities, plus three additional cities in the mid-Atlantic, along with three EAS cities in Arkansas. In November 2018, Southern launched service between Palm Beach, Tampa, and Key West, replacing routes abandoned by Silver Airways.

Mokulele Airlines, founded in 1994 by Rebecca “Kawehi”Inaba, was the first airline started by a native Hawaiian woman. The airline was sold in 2005 and had multiple ownership changes, until it found stability with its latest ownership group, Transpac Aviation, Inc. Since 2011, Mokulele has grown to 15 aircraft serving 11 cities, including four EAS communities. Mokulele currently operates 787 weekly departures.

"We’ve looked at several potential acquisitions over the last couple of years,” said Stan Little, chairman and CEO of Southern. “This was the first opportunity that I believed to be the perfect complement to operation. We fly the same aircraft type, we have similar operational structures and their assets and revenue streams help diversify our balance sheet. This acquisition will give the newly-combined company stability in an otherwise volatile marketplace, while making Southern Airways a nationally-recognized brand.”

One of Southern’s goals for the expanded company will be to obtain additional interline ticket and baggage agreements with major carriers. Southern has interline agreements with American Airlines and Condor Airlines, while Mokulele has agreements with Alaska Airlines and Air New Zealand. Expanding those partnerships to include multiple national and global carriers will be the focus post-integration.

Unlike Southern’s previous two acquisitions, which included name changes and rebranding, Southern intends to keep the Mokulele brand alive and well in the Hawaiian Islands, while eventually operating all flights on the Southern Airways FAA operating certificate.

“The Mokulele brand is beloved in the Hawaiian Islands,”explained Little. “I’ve found their aloha spirit to be very similar to our company’s core values, so we are truly excited about adding the Mokulele name to the Southern family of companies.”

Southern is coming off a record-setting year for passenger growth in its Essential Air Service cities with some communities seeing 40 percent increases in traffic over the previous year, and many airports having had their best year for enplanements in more than a decade. Southern has also posted some of the best performance statistics in the industry, completing over 99 percent of its scheduled EAS flights in the last six months.