Republic Takes Half of Mokulele's Equity

(MoneyWatch)  Republic has been a big fan of doling out money to help carriers get on their feet. They've done it for US Airways, Midwest, and Frontier, and they've now done it for Mokulele in Hawai'i as well. Now they're taking it a step further, and apparently they want to get into the business of running an airline.

Originally, Republic provided the aircraft for Mokulele to run an interisland operation and they added an $8 million loan to help them get started. It didn't take long for Mokulele to burn through all that money, but instead of just shutting the operation down, Republic apparently thinks it can do better.

Now, Republic will take some of the $8 million loan, invest additional equity, and turn that into a 50 percent stake in the airline. In addition, they've decided to remove Bill Boyer as CEO, who will now be able to "more effectively lead Mokulele's expanding sales and marketing efforts." Republic's VP for Strategic Alliances, Scott Durgin, will take over as head honcho until they can find a permanent solution.

This seems to be confirmation that Republic sees real opportunity in the interisland market, but they don't have faith that the current management team can handle the task. So, they've decided to take control, and that's weird. Republic has long been an operator, a carrier focused on running a solid operation for its marketing partners. Now, Republic has crossed the line, and that can be a whole different world. It will be interesting to see if they do have the magic touch.

They won't, however, be starting off well. Mesa's go! announced that due to the change in control of the airline, it will be ending the codeshare agreement that fed Mokulele's smaller aircraft sooner than anticipated. This may be tougher than Republic thinks.