Island Air said in a news release there will no layoffs or other staff changes after its sale to Ohana Airline Holdings, a holding company owned by the billionaire.
Terms of the deal weren't disclosed.
"We are excited Mr. Ellison has acquired Island Air. He has the vision and resources to literally take Island Air to new heights," Island Air
Paul Marinelli, vice president of Lawrence Investments, another company owned by Ellison, said the purchase is a major investment and commitment to Hawaii.
"We understand the critical importance of transportation in an island state, and we will ensure that Island Air strengthens its role, capacity and service to the people of Hawaii," Marinelli said.
Ellison bought 98 percent of Lanai from billionaire David Murdock in June for an undisclosed price. The Maui News reported that Murdock, the CEO of Castle & Cooke, was seeking $500 million to $600 million for his Lanai holdings.
Ellison told CNBC in an interview a few months later he envisions the 141-square-mile island
His plans include converting sea water into fresh water, increasing the use of electric cars, and boosting fruit exports to Japan and other markets.
Forbes magazine named Ellison, who has a fortune estimated at $36 billion, the sixth richest person in the world last year.
Island Air offers 224 weekly flights between Oahu, Maui, the Big Island, Kauai, Molokai and Lanai.
It's dwarfed by the state's largest carrier, Hawaiian Airlines, which flies 160 flights between the Hawaiian Islands each day. Hawaiian also flies to cities in the U.S. mainland, Asia and Pacific.