Hawaii needs a greater diversity of transport options between islands. New ownership may give Island what it needs to be a bigger part of this.
While this may seem like a logical course of action for a company, it creates really sensationalist headlines like you see above. More importantly, it doesn't bode well for Ellison's relationship with the tens of thousands of people who look to him to make smart decisions about his island and airline.
Ellison typically doesn't lose. If he backs down on Island it will appear to be a case of the billionaire being bored with his Hawaiian folly.
Island Air had better get Larry Ellison to write a check and order that new batch of turboprops soon, or else there won't be any customers left if things keep going the way they are.