Island Air Service (2O, Kodiak) has been awarded a subsidy for flights that it provides at Akhiok in Alaska. The airline advised the US Department of Transportation on March 30, 2017, that it could no longer provide the service subsidy-free. Following the DOT's official call for tenders to apply for an Essential Air Service (EAS) contract for the route, Island Air was awarded the subsidy. It was the only carrier to apply.

Island Air will continue to offer 3x weekly round trips from Akhiok to Kodiak aboard 5-seater Piper (single piston) Cherokee PA-32 aircraft. The subsidy is worth a total of USD466,446 for a period of two years.

In awarding the contract, the DOT noted that Island Air had already provided many years of reliable service.

Akhiok is a small community located in the south of Kodiak Island, approximately 130 kilometres from the city of Kodiak. It is relatively isolated due to a lack of a road network.

Island Air Service connects coastal communities on Kodiak, including Old Harbor, Port Lions, Ouzinkie, Larsen Bay, and Karluk.