This whole analysis is ridiculous. You are comparing one route - LAX-LAS to base your claim on. The fact of the matter is that Hawaiian and Aloha are not making a profit on interisland service - the interisland service is costly to operate.

I can find you hundreds of routes across the USA that are significantly higher than the interisland flights. Ever look at Portland-Seattle? For the distance that is often a more costly flight.

The point is that your analysis is ridiculous and the demand is not there for interisland service without connections from mainland travelers. I've been on some Hawaiian flights in the past two years with 8 people on a 717. How the heck do you expect them to make money on this flight?

The interisland market also has to supply a steady stream of passengers for the airlines to make an investment. There is not a consistent steady stream without the connections from the mainland flights. The locals won't pay the reasonable costs to operate these routes. That is a fact.

In the end I think what will happen is that the routes will become subsidized by the state. There is definately a need for interisland travel, no doubt.