CINCINNATI, Ohio - Robert Mauracher is shaking things up at Island Air in Hawaii ever since becoming president earlier this year. Mauracher wrapped up two deals last week in Cincinnati during the Regional Airline Association's annual convention.

The operator of "pass me down" aircraft will be getting three new Bombardier [BBD] Q400, 72-seat turboprops. The first plane is set to arrive in November. All should be in place by next summer's tourist season. The carrier needs the capacity because it has planes booked solid for the peak travel periods. Mauracher is leasing the planes from Bombardier.

The second deal involves adding Continental Airlines [CAL] as a partner. Already operating under code-share agreements with Aloha Airlines, its former parent, and Hawaiian Airlines, Island Air is now adding CAL. It has had a similar long-standing relationship with United Airlines [UALAQ].

In order to retain frontline employees, Mauracher recently hiked their wages by $2 per hour. The carrier had been losing too many employees to customer service jobs at other companies in the islands. The raises have reduced the turnover.

Cape Air

Cape Air's operations in Micronesia have been successful, but not yet profitable, said Dan Wolf, its president. Operating with a Continental code-share, Cape has 18 flights a day between Guam, Saipan and Rota. Its earliest flight is at 2 a.m. to make a Continental flight to Tokyo. While it has been flying three ATR-42s and two Cessna 402s, the carrier will be shifting the Cessna's back to Cape Code for its Northeast operations, Wolf said.

It is the "unknown unknowns" that have driven up costs. For example, the avionics in the ATR would not work in the remote Pacific so GPS devices had to be installed on the aircraft, Wolf said. The operations center on Cape Cod now operates 18 hours a day to handle the Micronesian operations 12 hours away.

Continental, which invited Cape Air to set up the feeder operation with former Continental Express aircraft, is paying Cape Air on a pro-rated basis. Wolf said the load factor has been averaging in the 50 percent range. About half of the passengers are Japanese tourists and the remaining half is inter-island traffic.

Cape Air is exploring other opportunities in the region, but Wolf said Continental would not permit him to discuss them.

MAIR

Mesaba Aviation and Big Sky are being outfitted with new aircraft to improve the prospects for both carriers, said Paul Foley, CEO of MAIR Holdings [MAIR], the parent of both carriers.

Mesaba recently won the rights to fly Bombardier CRJ 200s for Northwest Airlines [NWAC] as well signing 10-year renewal contracts for its Saab 340B and Avro RJ85s. Big Sky is in the process of replacing its Metro fleet with Beechcraft 1900Ds.

MAIR is continuing to explore other code-share relationships, Foley said. Because of restrictions on Mesaba by Northwest, any growth will have to be with the Big Sky certificate.

Horizon Air

Now in its fifth quarter of restructured operations, Horizon Air has become profitable, Jeff Pinneo, the carrier's president, said. One-quarter of Horizon's revenue now comes from a code-share agreement with Frontier Airlines [FRNT]. It is flying eight CRJ 700s for Frontier. Another quarter of Horizon's capacity has been devoted to "harmonizing" its routes with Alaska Air [ALK], its sibling carrier. Under the program, the routes are coordinated so the most appropriate aircraft are serving the routes for either the regional or mainline.

Horizon has eight more CRJ 700s on order with two per year scheduled for delivery. It has the option to convert each order into a CRJ 900 or a Q400 turboprop.

Comair

Things are looking up at Comair, proclaims its president, Fred Buttrell. Now on the job for four months, Buttrell has been working to clear "the toxic air" between management and labor that has plagued the company since the 2001 strike. He has persuaded most unions to accept a salary freeze as part of cost-cutting program. Delta recently awarded 10 additional CRJ 200s to this wholly owned subsidiary carrier.

Buttrell said the day is approaching when the network carrier will require the regionals to operate RJs on a pro-rated basis. The regionals will be required to take on greater risk by sharing the expenses of flying between some city pairs, he said.