Republic May Be Looking to Start a Hawaiian Airline

(MoneyWatch)  I'm once again back in action after a fantastic wedding week. Hopefully you enjoyed some of the posts I put up while I was gone, but now I'm back to more timely pieces. There's definitely a backlog of things to talk about, but today I thought I'd start with an interesting tidbit in the Honolulu Advertiser about Republic looking to enter the Hawaiian interisland market.

"Oh no, we've seen this before," you say . . . right? Not so fast. There are some big differences between what Mesa did with go! and what Republic is said to be doing here.

1. There's a lot less capacity right now. When go! was looking to come in, both Aloha and Hawaiian were running very frequent flights on their 737 and 717 aircraft. Now that Aloha is gone, go! and Hawaiian stepped up to fill the void, but there's still nowhere near what was there before.
2. Republic has the right plane. They're supposedly interested in using the Embraer 170 here. This is far superior to go!'s CRJ efforts. The cost per seat will be far less and it will better match capacity with demand than the CRJ. Simply put, they should be able to make money with lower fares or fewer people than go! can.
3. Republic wants to partner locally. Remember when go! started? The Hawaiian people were up in arms over this interloper's entrance. Republic doesn't want to create a new airline or fly under its own name. It wants to partner with current go! partner Mokulele, if the article is to be believed. This makes it somewhat of a local operation and less likely to see a backlash.

I look at something like this and have a hard time seeing why anyone would choose go! over Republic/Mokulele. That means it'll be a fare battle once again, and go!'s aircraft means it will probably lose more money than Republic will. If it's a battle of attrition, Republic is far stronger than Mesa is these days anyway. Not a bad idea for them at all.