HONOLULU -- Two of the three jet carriers that fly interisland routes in Hawaii are merging.

The parent companies of Mokulele Airlines and go! announced Tuesday they have formed a joint venture and will continue to operate under both brand names.

Phoenix-based Mesa Air Group Inc., which operates go!, will own 75 percent of the new company while Mokulele shareholders will own 25 percent.

The partnership is the latest in the fast-evolving interisland market in recent years that saw both startup carriers enter Hawaii and the abrupt shutdown of Aloha Airlines. It will now compete against Hawaiian Airlines.

Passengers can continue to book travel on both Mokulele and go! and existing reservations will be honored. But the airlines will operate out of one terminal -- the commuter terminal -- where go!'s check in counters are currently located, officials said.

The consolidation of go! and Mokulele Airlines begins Thursday.

"Economic conditions dictate that we probably would not have continued, either of us, in the current market," said Paul Skellon, Vice President of go!

Skellon said the move has been in the works for weeks, after an extremely disappointing summer and low passenger numbers last month.

Hilo residents Thalia Pacheco and Roxane Freitas said they count on low fares to shuttle them between the islands. So they said they are relieved that the airlines are fighting to survive in Hawaii --- by merging into a single operation.

"I fly on both. So, I think it's a good idea," said Pacheco. "It gives us price options."

"It's good, we need more besides just Hawaiian Air," said Freitas. "We don't have choices, so with this, at least we have another choice."

The new airline will be called go! Mokulele, KITV reported.

Mokulele will stop operating its jet flights Thursday and its passengers will be flown by go! aboard its CRJ 200 aircraft.

Since its take off in November, Mokulele has struggled to survive against go! and Hawaiian Airlines -- which dominates Hawaii's inter-island market.

"By joining forces with Mokulele, we are going to ensure that there is a strong, viable, low fare carrier to provide competition here in Hawaii," said Skellon.

Mesa Air Group said it does not anticipate any layoffs after the merger. go! has an employee base of 300 while Mokulele said it has 160 workers.