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Aloha Air Cargo asks DOT to remove regulatory handcuffs on expansion

Aloha Air Cargo is urging the U.S. Department of Transportation to lift a cap on the number of aircraft it can operate in inter-island Hawaii service, which it claims is inhibiting its ability to grow and help the U.S. Postal Service overcome mail delivery backlogs.

High mail demand exceeds Aloha Air’s current capacity, resulting in transit delays. The Postal Service has asked Aloha Air Cargo to begin transporting mail from Honolulu to both Maui and Hilo and could be forced to use slower boats because of the capacity shortage, the airline said in a petition last week.

But the Postal Service, responding to FreightWaves’ queries, said it doesn’t need more airlift capacity to move mail to outer islands in Hawaii and that use of boats for non-preferential mail has been a long-standing practice.

“To improve delivery times, specifically in the morning, USPS solicited Aloha Air Cargo in November 2022 and awarded them a contract to transport mail to Kahului and Hilo in the AM through August 2023,” said Duke Gonzales, a spokesman for the Hawaii district in an email. “We work closely with our air transportation partners to effect the timely delivery of mail to locations across the state of Hawaii. We are committed to serving our customers across the state and collaborate with them to adjust to the occasional operational challenges that they experience.”

The DOT imposed conditions on Aloha Air Cargo’s operating authority in 2008 when Seattle-based transportation conglomerate Saltchuk Holdings acquired the cargo assets of bankrupt Aloha Airlines, which went out of business. Federal transportation regulators required Aloha Air Cargo to be a wholly owned subsidiary of Saltchuk and that it be limited to five aircraft.

Aloha Air Cargo is currently the only large jet operator transporting mail between the Hawaiian Islands for the Postal Service after the Federal Aviation Administration suspended the operating license of Transair following a July 2021 crash. Aloha flies a mix of Boeing 737-300 and -400 converted freighters, plus charters a 767 operated by sister carrier Northern Air Cargo between Honolulu and Los Angeles.

The carrier said the Postal Service asked it to pick up the former Transair routes to Maui and Hilo.

The company argued in the petition that it has outgrown the need for guardrails after proving itself as a financially viable provider of reliable and consistent service. The primary reason for amending Aloha’s operating certificate is so it can add a couple more aircraft, but management also wants to remove the subsidiary requirement because no other airline has a condition like that on its license.

Saltchuk is a large, diversified freight company. It also owns scheduled carrier Northern Air Cargo; Caribbean freighter operator StratAir and a couple of repair stations; Tropical Shipping, an ocean line serving the Caribbean and Bahamas; Tote, a domestic shipping line serving Alaska and Puerto Rico; and several logistics companies.

The DOT typically monitors a new carrier and limits its fleet growth for a few years when there is a question about the company’s solvency or to give it time to gain operating experience.

“The passage of nearly fifteen years and [Aloha’s] solid operational and commercial track record have rendered moot the need for this condition,” the company said in the filing.

It asked regulators for an immediate temporary exemption while they go through the lengthy process of formally amending Aloha’s operating certificate.

Click here for more FreightWaves and American Shipper articles by Eric Kulisch.


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