HAWAII'S ISLANO 

MOKULELE FLIGHT SERVICES DBA MOKULELE AIRLINES, INC. 

PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICES 

KAMUELA, HAWAII 

Order 2013-4-17 

Served: April 25, 2013 

Docket: DOT -OST -1997-2833 

Dated: May 21, 2013 

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Mokulele Airlines Proposal to Provide Essential Air Service to Kamuela Airport 

Mokulele Flight Services, Inc. dba Mokulele Airlines submits the enclosed proposal to provide essential 

air services to the surrounding communities of Kamuela Airport located in Waimea, Hawaii, under Order 

2013-4-17, dated April 25, 2013. Mokulele Airlines is a 135 FAA certified entity with authorization to 

carry both passengers and mail. Operating under this certificate, Mokulele Airlines has provided 

scheduled passenger service throughout the islands for seven consecutive years. 

Mokulele fulfills the four selection criteria for essential air service award: (1) service reliability; (2) 

contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with 

a larger carrier at the hub; and (4) community views. 

Proposal: 

In this proposal, Mokulele is offering twelve round trip departures weekly between Kamuela Airport and 

Honolulu International Airport and or Kahului Airport. Included in the proposed schedule are inbound 

and outbound traffic operating seven days a week. 

Our goal is to provide cost effective flights for the residents of Kamuela and the surrounding 

communities with competitive fares on non-stop flights to Honolulu( OPTION ONE) and or 

Kahului( OPTION TWO). The timing and price of these flights afford the residents access to easy same 

day travel to and from Kamuela. Every effort is made to insure that the flight schedule affords the 

traveler connectivity to international and mainland departures in Honolulu and Kahului. 

Mokulele Airlines operates its main hub in Kailua-Kana, Hawaii. To maximize our operating 

performance, we will include flights to and from Kailua- Kana, Hawaii and will operate them as part of 

this bid. 

Mokulele is poised to begin this service immediately upon acceptance of the proposal. Many of the 

residents of Kohala are familiar with the excellent service provided by Mokulele Airlines at the Kona 

base and are enthusiastic about the possibility of enjoying these services at the Kamuela Airport. We 

are in a position to offer these flights to our passengers through global distribution networks assuring 

online access by traditional travel agents and online travel agencies such as Expedia and Orbitz. 

Experience: 

This is Mokulele Airlines' first bid on an essential air service proposal, under the airline's new 

management. We are confident in our ability to provide excellent service to Kamuela Airport. We feel 

that our excellent marketing programs, responsible management, customer service, new and well 
maintained aircraft, and our demonstrated operational excellence will build traffic in the Kohala Coast 

market. The anticipated tourism figures for the Kohala Coast are on the rise but the T-100 data for this 

market for the year 2012 shows a remarkable decline in passenger carriage from this airport. We are 

prepared to partner with the affected communities to make this a viable market. 

We have experience in returning under- serviced, neglected communities back to life. Through a 

marketing arrangement with Traavasa/Hana Hotels, we entered the Hana/Kahului market in 2012. We 

offered a competitive fare pricing structure that was not available from the previous operator. In 

operation for eight months, the Kahalui/Hana route is a real success story. In the first eight months of 

operation, Mokulele flew 1,706 passengers compared to the previous operator who flew less that four 

hundred passengers in the first ten months of 2012. 

Mokulele Airlines will repeat this success story with Kamuela/Waimea/Kohala Coast communities. 

Equipment: 

The proposed flights are offered aboard a Cessna Grand Caravan operated by both a pilot and a first 

officer on board. The Cessna Caravan is a modern aircraft, still in production. Manufactured by one of 

the most recognized aviation companies in history, the Caravan is one of the largest and safest aircraft 

of its size and range. The aircraft comfortably seats nine passengers with a large cargo pod for baggage. 

The aircraft is equipped with modern avionics, fully integrated auto pilot, weather radar, and onboard 

weather. The aircraft are air conditioned and heated for passenger comfort. 

Reservations and connectivity: 

Flight reservations are made easy on Mokulele Airlines. Reservations can be made via our website at 

www.mokulelehawaii.com. Reservations made on this site are tracked by very sophisticated, industry 

leading software which is certified SecureFiight, making it compliant with TSA regulations. Customers 

can also make reservations by telephone with our experienced, industry knowledgeable staff located in 

Hawaii. Mokulele Airlines offers global distribution integration, thus accommodating easy access to 

inventory by traditional travel agents and online travel agencies such as Orbitz or Travelocity. 

Mokulele Airlines is the only commuter airline in Hawaii with a code share partner operating interisland. 

This same affiliation carries the potential for bilateral interline ticketing with many major carriers. 

Mokulele has operated as a codeshare partner with Mesa Airline, Go! Since 2007. Mokulele also has 

interline agreements with Alaska Airlines and two international carriers. Under the Mesa Airlines code, 

Mokulele can also offer interline ticketing to Mesa partners- American, Delta, and USAIR. 

Service: 

The Mokulele ticket counter in Kamuela will be staffed by professional, well trained personnel who will 

assist in both reservations and the boarding process. The counter will be professionally marked with 

clearly readable signs identifying it as the Mokulele Airlines ticket counter. Personnel will assist 

boarding passengers in a professional and helpful manner. 
Passengers are required to check in 30 minutes prior to departure in Kamuela. Check in times in for the 

Honolulu return fight may be longer due to TSA requirements. 

Flights to and from Honolulu are operated out of the interisland terminal. Shuttle bus service operates 

continuously assuring easy transportation to the international terminal. 

Conclusion: 

Mokulele's record for ontime performance and reliability coupled with their dedication to the 

communities that they serve, make Mokulele an ideal candidate to provide essential air service to the 

Kamuela Airport. Daily service between Waimea and Honolulu provides this community the ability to 

connect with mainland as well as interisland flights. 

Our bid assures that the proposed route is serviced reliably and cost effectively. The proposed schedule 

coincides with many daily departures to the mainland and other islands. 

We appreciate the opportunity to respond to your request for proposal. 

Respectfully submitted by: 

Ron Hansen 

CEO/President 

Mokulele Flight Services dba Mokule[e Airlines, Inc. 

73-350 U'u Street 

Kailua-Kana, Hl. 96740 

All correspondence regarding this proposal should be directed to Ron Hansen at the above address 
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OVERVIEW 

Based in Kana, Hawaii, Mokulele was founded in 1998 as an inter-island airline offering service to seven 

destinations on five islands. The management team of Mokulele is highly experienced in the airline 

industry and has seized on the opportunity for expansion by providing greater efficiencies and 

operational controls. Mokulele is a "scheduled" Part 135 Air Carrier with 15 years of accident-free 

service. Mokulele operates more than 80 daily flights and carries 15,000 plus passengers monthly with 

its fleet of eight Cessna Grand Caravans. 

Current Operations 

Mokulele currently employs 70 full-time and 30 part-time employees, most performing collateral duties 

at the seven airports it currently serves. The employee group is non-union, primarily comprised of 

young, local residents eager to see the company prosper and grow in the island market. In December 

2012, Mokulele relocated its call center from the mainland to Maui to provide Mokulele's passengers 

with an enhanced level of customer service by ensuring that their calls will be answered by local 

residents who are knowledgeable about Hawaii. 

Presently, Mokulele owns and operates eight new and late model Cessna Grand Caravans, each 

configured with nine passenger seats The aircraft maintenance departments are located at Kana and 

Kahului where it employs 12 licensed A&P mechanics on a 20 hour, seven day per week schedule. All 

maintenance except engine and prop overhaul is accomplished by Mokulele's maintenance department. 

Operating Certificate and Authority 

Mokulele conducts business as a certified FAA Part 135, Scheduled Air Carrier. Refer to Exhibit A for 

copies of Mokulele's FAA Air Carrier Certificate No. MK9A559L and DOT Certificate of Public 

Convenience and Necessity for Interstate Air Transportation. 

Routes and Airports Served 

Mokulele operates as a passenger carrier and code shares with Go Airlines with the intention of 

expanding the inter-line agreements with foreign and domestic airlines which serve Hawaii. 

The airports now served on the Mokulele route structure are: 

• Kana International Airport (KOA) 

• Kahului Airport (OGG) 
• Kapalua (JHM) 

• Hana (HNM} 

• Lana'i City Airport (LNY) 

• Ho'olehua Airport (MKK) 

• Honolulu lnt'l. Airport {HNL) 

Market Opportunity 

The following, in descending order of importance, are ten elements that will lead to the continued 

success of Mokulele Airlines: 

• Employing an experienced, professional management team that combines vision, realism and 

solid knowledge of the Federal Aviation Regulations relating to flight and legal responsibilities 

involved for companies engaged in scheduled passenger flights. The management team's 

strengths include familiarity with the latest aviation, electronic and informational technologies; 

familiarity with the region and markets to be served; realization of the crucial importance of an 

organization's personnel and their relationship to the company's success and a total 

commitment to the overall mission and goals of the airline. 

• Implementing an intelligent, progressive and aggressive marketing strategy that identifies 

Mokulele Airlines as a unique air carrier flying unique routes with a unique passenger clientele. 

It is a marketing philosophy that identifies Mokulele and its employees as sharper, smarter and 

with a higher level of professionalism and operation standard than is the norm in the market, 

combined with highly competitive fare pricing. 

• Presenting a friendly, cooperative, enjoyable yet highly professional safety-conscious flight 

crew to the traveling public. 

• Maintaining aircraft with a highly trained and knowledgeable staff equipped with spare parts 

and tooling, yields aircraft that comply with all FAA aircraft maintenance standards and high 

dispatch reliability. 

• Establishing a high level of operational oversight and quality control that will ensure that 

Mokufele always lives up to its commitment to a high level of flight safety, customer satisfaction 

and convenience at a reasonable, highly competitive fare. 

• Growing the company based on need rather than growth for growth's sake. This requires being 

aware of solid niche-enlargement opportunities that will allow incremental, but always 

profitable expansion. Examples of this strategy include the expansion of service to Kapalua and 

Hana, Maui in 2012. 

• Development and implementation of code share and interline agreements with well 

established major airlines thus offering cost advantages to our clients. 

• Identifying and developing cost-effective opportunities for new markets, new market concepts 

and expanded sales potential. This objective can be accomplished by maintaining an awareness 
of combining the core aviation business with ancillary marketing concepts and activities and 

ground-based operations that support, supplement, and complement the aviation elements of 

the business. These elements include such activities as aviation services, and other logical 

business pursuits both within and outside the immediate aviation business. 

• Utilization of the latest electronic and informational technologies in sales and marketing, 

reservations, scheduling, resource planning and operational oversight. Technologies such as 

Internet marketing, reservations, operational oversight and flight tracking all contribute to 

reduced staffing requirements for Mokulele. 

Competitive Advantages 

• The current competitive environment for Mokulele Airlines is bright with very little competition. 

Mokulele Airlines is uniquely positioned to continue growing. Mokulele has the most daily 

flights from the following airports: Kana {KOA) 121 Kahului Airport {OGG) 21, Kapalua (JHM) 7, 

Hana (HNM) 2, Ho'olehua Airport (MKK) 14. 

Sales and Marketing 

Mokulele's growth strategy concentrates on building market share through the following actions: 

• Code Sharing and Interline Agreements - Code sharing offers the passengers that begin their flight 

on Mokulele a reduced fare when they transfer to a code-sharing partner of Mokulele's to continue 

their flight to the final destination. 
"Our entire trip over to Molokai to ride the mules down to Kalaupapa, beginning with a flawless 

flight, was so amazing and challenging for me. Not one to love heights, nothing during the flight 

caused me concern or angst. Your pilots did a great job!" -Cheryl B. 

"I want to thank you Lehua Wanda for helping me with my United flight issues. She is so 

wonderful and helpful. I wouldn't be able to get to Maui without her help for over an hour. Big 

Hugs to her. Thank you Manit 

"On 7 February I flew from Molokai to Maui for a day trip. I flew my favorite airline, of course. 

Great service by the staff at the counter and the pilots were outstanding. There is one more 

reason to like Mokulele ... you take great care of our military personnel. Thanks for a great flight. 

I will be flying with you again in another 10 days." - PaulS. 

"What do I enjoy about flying for Mokulele?" "The people, the company, the planes, all the 

views ... It's all great." -Jordan B., pilot 

''As a former Navy P-3 Orion dude I just wanted to say what an amazing flight my family 

(especially very nervous-to-fly wife) had with Chris flying us from Maui to Kona on Sunday 26 

August. He is a tremendous "stick" and really greased the landing, and his positive attitude and 

aloha spirit made the flight extremely memorable. I will absolutely be flying Mokulele again on 

my next tripto Hawaii! Many thanks and please pass my gratitude and comments on to Chris 

and everyone in a leadership position with your great company!"- Commander Dave 

"I need help to locate one of your employees named Jeremy. Back in March I lost my backpack 

off the cliffs of Honolua Bay. To my surprise it was mailed back to my home in New York by 

Jeremy. He left a note with his business card but unfortunately I have lost this information. 

want to contact him and thank him for his thoughtfulness. Alii need is an email."- Angela 
GDS Connectivity 

Mokulele Airlines provides full global distribution connectivity. Mokulele flights are listed on Apollo, 

Worldspan, Galileo,Travelport and Sabre. 

Mokulele Airlines flights are available for booking by most travel agents and through popular online 

booking sites such as Expedia and Orbitz. 

Passengers can book directly with Mokulele Airlines through our website at www.mokulelehawaii.com. 

We also provide a call center for telephone bookings . 

CODESHARE AND INTERLINE 

Currently, Mokulele Airlines codeshares flights with GO Airlines. Through this connection, passengers 

can book onward flights with a number of interline carriers. 

RESERVATION 

Mokulele Airlines utilizes a sophisticated airline specific reservations system to initiate, track and report 

on reservations made through their website. 
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Mokulele Airlines operates eight nine passenger Cessna Grand Caravan aircraft. The Grand Caravan 

aircraft is currently in production. Four of the eight aircraft are new, off the production line. 

The Cessna Grand Caravan enjoys a reputation for dependability and safety. The aircraft is in worldwide 

use, accumulating more than 12 million hours throughout the worldwide fleet of aircraft. 

The aircraft is air conditioned and heated assuring passenger comfort. The nine passenger Cessna 

includes a large cargo pod assuring comfort in the passenger cabin. 

The Cessna Grand Caravans are equipped with: 

•!• Garmin G-100 avionics package 

•!• GPS Traffic and terrain avoidance systems 

•!• Onboard weather and weather radar 

•!• Integrated auto pilot 
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Subsidy Request 

Mokulele Airlines would like to propose a series of options to the Department for their consideration. 

We have two core choices: Option #1 is flights into Honolulu International Airport, and Option #2 is for 

flights to Kahului. Each option will come with a discount for a 4 year contract award. 

='-'-==-"; 

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Mokulele proposes 24 flights a week to and from Honolulu and 

Waimea/Kamuela for a subsidy of $584,956.01 per year. This comes 

to $477.91 per departure and $136.54 per passenger. 

Mokulele proposes 24 flights a week to and from Honolulu and 

Waimea/Kamuela- we feel a 4 year term will allow Mokulele the 

time needed to build traffic at Waimea/Kamuela to historical 

numbers. 

Year Annual Subsidy Per Departure Per Passenger 

Mokulele proposes 24 flights a week to and from Kahului and 

Waimea/Kamuela for a subsidy of $494,290.86 per year. This comes 

to $403.83 per departure and $161.53 per passenger. This is the 

same service pattern as the incumbent operator. 

Mokulele proposes 24 flights a week to and Kahului and 

Waimea/Kamuela- we feel a 4 year term will allow Mokulele the 

time needed to build traffic at Waimea/Kamuela to historical 

numbers. 

Year Annual Subsidy Per Departure Per Passenger 

1 $494,290.86 $403.83 $161.53 

2 $434,411.23 $354.91 $101.40 

3 $417,310.26 $340.94 $85.23 

4 $412,389.46 $336.92 $78.35 
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PROPOSED FlYING SCHEDULE- MOKULELE AIRLINES, INC. 

Essential Air Services to Kamuela, Hawaii 

Order 2013-4-17 

Served: April25, 2013 

Docket DOT-CST-1997-283 

OPTION 1 MUE/HNL/MUE 

This schedule is intended for illustration of the possible flying schedule and is subject to change based 

on operational requirements. 

OPTION 2 MUE/OGG/MUE 

This schedule is intended for illustration of the possible flight schedule and is subject to change based 

operational requirements. 
Weekly Frequencies 

Completion Factor 

Annual Departures 

Block Time (in minutes) 

Annual Block Hours 

Stage length (statute miles) 

Available Seat Miles (9 seats) 

Load Factor 

Passengers 

Revenue Passenger Miles 

Average Fare 

Revenue: 

Assumptions 

Direct Expenses: 

Total Direct Expenses· 

Indirect Expenses: 

Passenger 

Fuel Cost P/Gal 

Fuel Burn Gallons P/Hr 

Ownership 

Flight Crew 

Fuel & Into Plane Fees 

Insurance 

Maintenance 

Miscellaneous/Reaccom 

Station Costs 

Landing Fees 

Agent Bookings & Sales 

Web bookings & sales 

Marketing 

Mise 

Set up costs I training 

$3.50 

55.00 

$65.00 

$75.00 

$192.50 

$15.00 

$185.00 

$25.00 

$60.00 

$20.00 

$8.80 

$4.15 

$2.50 

2.0% 

Per Blk Hr 

Per Blk Hr 

Per Blk Hr 

Per Blk Hr 

Per Blk Hr 

Per Blk Hr 

per dept 

per dept 

per Pax 

per Pax 

per Pax 

of direct 

Kamuela to 

Honolulu 

Option #1, Years 1 & 2 

24 

99% 

1224 

1.1 

1346 

146 

1608336 

39% 

4284 

625464 

$86.51 

$93 fare 

$370,615.81 

$29,988.00 

$400,603.81 

$87,516.00 

$100,980.00 

$259,182.00 

$20,196.00 

$249,084.00 

$33,660.00 

$750,618.00 

$73,440.00 

$24,480.00 

$18,849.60 

$8,889.30 

$10,710.00 

$15,012.36 

$10,000.00 
Total indirect Expenses 

Income (loss) 

Profit element 

Subsidy requirement 

Subsidy per passenger 

Subsidy per departure 

General & Admin/Other 4.8% of Direct $36,029.66 

$197,410.92 

$948,028.92 

($547,425.11) 

$37,530.90 

$584,956.01 

$136.54 

$477.91 
Weekly Frequencies 

Completion Factor 

Annual Departures 

Block Time (in minutes} 

Annual Block Hours 

Stage length (statute miles) 

Available Seat Miles (9 seats) 

Load Factor 

Passengers 

Revenue Passenger Miles 

Average Fare 

Revenue: 

Assumptions 

Direct Expenses: 

Total Direct Expenses 

Indirect Expenses: 

Passenger 

Ancillaries 

Fuel Cost P/Gal 

Fuel Burn Gallons P/Hr 

Ownership 

Flight Crew 

Fuel & Into Plane Fees 

Insurance 

Maintenance 

Miscellaneous/Reaccom 

Station Costs 

Landing Fees 

Agent Bookings & Sales 

Web bookings & sales 

Marketing 

Mise 

Set up costs I training 

General & Ad min/Other 

$4.00 per passenger 

$3.50 

55.00 

$65.00 

$75.00 

$192.50 

$15.00 

$210.00 

$25.00 

$60.00 

$23.00 

$9.10 

$4.15 

$3.35 

2.0% 

4.8% 

Per Blk Hr 

Per Blk Hr 

Per Blk Hr 

Per Blk Hr 

Per Blk Hr 

Per Blk Hr 

per dept 

per dept 

per Pax 

per Pax 

per Pax 

of direct 

of Direct 

Kamuela to 

Kahului 

Option #2- Year 1 

24 

99% 

1224 

0.7 

857 

79 

870264 

28% 

3060 

241740 

$63.26 

$68 fare 

$193,562.79 

$12,240.00 

$205,802.79 

$55,692.00 

$64,260.00 

$164,934.00 

$12,852.00 

$179,928.00 

$21,420.00 

$499,086.00 

$73,440.00 

$28,152.00 

$13,923.00 

$6,349.50 

$10,251.00 

$9,981.72 

$10,000.00 

$23,956.13 

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Fe~eral Avla$n · Ad inlstration 

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Air Carrier Certificate ! . . . . 

This certifies that 

MOKULELE FLIGHT SERVICE, INC. 

73-350 UlU DRIVE 

KAILUA-KONA, HAWAII 96740 

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• has met the requirements of the Federal Aviation Act of 1958, as amended, and the rules, 

; regulations, and standards prescribed thereunder for the issuance of this certificate and i~ 

: heireby authorized to operate as an alr carrier and conduct common carriage operations in 

, ab~ordan~ with said Act and the rules, regulations, and standards prescribed thereunder 

: aht:l the terms, conditions, and limitations contained in the approved operations specifications. 

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· rWis certi~~ate is not transferable and, unless sooner surrendered, suspended, or revoked, 

sh~ll contihue in effect indefinitely. 

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Certificate number: --=t~·lK""'9.;;.;;J.·.;;:;..20.;;.;;3:..:cN'---

. Effective Date: Ja.:ma:::y 30, 2013 , I 

i !.ssued at: NP-13..,Honolulu, HI 

By Direction of the Administrator 

~ (Signature) 

R~gional Fligh~ S~andards 

Division Mar .. 

(Title) 

l'iast:ern Pacific Recr.i.on 

(Region/Office) 

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