Where's the aloha? Crowded planes, higher fares on Hawaii routes

George Hobica, May 30, 2008
Fares from Washington DC:

    Stop by the ticketing hall of Honolulu International Airport's Interisland Terminal these days, and you'll see what a split personality looks like, up close.

    One side of the terminal is clogged with passengers, many of them waiting in long lines just to use self check-in. These are the Hawaiian Airlines counters. Down the hall, however, the Aloha Airlines desks sit in silence, a few lone, bored security people amble around, making sure nobody disturbs what remains of a once vibrant airline.

    Hawaii has always operated a little differently than other American states, with two daily newspapers in its small capital, Honolulu, and two state airlines, Hawaiian and Aloha. But at the end of March, Aloha suddenly went bust, leaving more than 3,000 employees without work.

    Why do bad things happen to good airlines?

    Crippled, it said, by predatory pricing on the inter-island routes that were its bread and butter, Aloha (currently embroiled in a multi-million dollar lawsuit against Mesa Air Group, parent company of the lowfare, inter-island flyer go!) insisted it could no longer compete, disappearing almost instantly.

    The news for Hawaii wasn't good, but it was about to get worse.

    On April 2, Indianapolis-based ATA Airlines, which was relied on for key mainland services, utilized both by Hawaiians and mainlanders coming to spend money, disappeared as well.

    Whereas many Aloha mainland services were operated by United Airlines -- for instance, nonstops form Los Angeles and Chicago -- together with the loss of ATA, the departures comprise a significant decrease in service, affecting markets such as Oakland, Phoenix and Las Vegas.

    Who benefits?

    The news is certainly good for Hawaiian Airlines, which has been setting records since April 1, flying an unprecedented 718,767 passengers during the month, according to data obtained by Travel Weekly.

    According to an airline spokesperson, however, while planes may have appeared to have been more crowded, an uptick in load factor -- that's airline speak for more seats in the sky -- was the key to scooping up extra butts. Hawaiian's Keoni Wagner told the Honolulu Advertiser last week that "the extra capacity we put in the market met demand."

     Some of these extra services include a new daily nonstop to California's Oakland International Airport from Honolulu (a busy route for both ATA and Aloha), plus larger planes on interisland routes.

    Immediately after the double-header of bad news, The Arizona Republic reported a $300 fare jump on available seats from Phoenix on US Airways, one of two remaining carriers serving the Islands (the other is Hawaiian) from Sky Harbor. The San Francisco Chronicle reported a similar jump from the Bay Area -- $420 for an August roundtrip on ATA vs. $700 on United. A recent check of midsummer, midweek flights show fares starting at $670 RT on Northwest from San Francisco to Honolulu. Even so, on Memorial Day, Airfarewatchdog.com discovered that United slashed fares from both Newark and Houston to Honolulu and Kauai to under $300 including taxes, for travel through April 2009.

    Too early to tell

    One of the most bitter domestic airline feuds in recent memory is what Aloha blames in part for its downfall. Aloha rival go! is still flying, and, according to parent company Mesa, which usually contracts with other airlines to operate short-haul services on smaller planes, it has almost doubled capacity since the shutdown.

    While go!'s arrival on the scene in 2006 -- almost days after Aloha emerged from its last bankruptcy -- did bring the islands closer together, with their $19 fare sales and breezy accessibility (a recent flight will be remembered for having the most cheerful and friendly cabin crew you could ever hope to fly with), it did so at a loss, and to the detriment of Aloha. CEO Jonathan Ornstein famously said that he could fly empty planes and cover it with profits from elsewhere in Mesa's sprawling network.

    Ornstein's remarks grated on Hawaiians, many with connections to people working at the competing "hometown" airlines. However, despite insistent claims that go! was an unwanted outsider and "had no Aloha," it continues to fly, now with ever-so-slightly-higher prices. A ticket for May travel from Honolulu to Kona purchased more than 15 days in advance cost $55; the same ticket for June travel was showing for $59 each way. 

    Take the waters

    The strife in the air coincides with the state's troubled waters. Last year's almost-failed effort to give Hawaii its first high-speed ferry service is today just limping along. After launching the Hawaii SuperFerry from Honolulu to the Maui port of Kahului and Kauai's Lihue, protests and other actions led to cancellation of the  Kauai service and left the company operating with just one route (Maui-Honolulu) per day.

    After unexpected dry dockings and numerous stops and starts on a second Maui service -- not to mention an uncertain timetable for its return to Kauai, the future of the SuperFerry looks murky. The second daily Maui departure has been inaugurated, but a new CEO says the people of Kauai can decide whether or not they want the service. (He probably shouldn't worry about keeping the phone lines free.)

    But wait, there's more?

    It doesn't take a financial analyst to recognize that Hawaii might still be over served. At least when you look at the Oahu-Maui route. There are now two daily ferry departures, plus dozens of daily flights to Kahului (and even some to tiny Kapalua and Hana) various airlines. People may be flying (or taking the boat), but are they paying enough to keep everyone in the air?

    According to the Department of Transportation, Maui's Kahului -- along with three other Hawaiian airports -- featured the lowest average roundtrip fares in the United States last year. It wasn't always this way. In a separate report on the change in average airfare from 1995 to the present, Kahului rings in at the third most changed, from an average round-trip fare in 1995 of $50 to a current fare of $183. But is it enough?