Site Admin

Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

This is how excess capacity should be handled. Let the market sort out the weak.

http://money.cnn.com/2008/03/3...ankruptcy.ap/index.htm?cnn=yes

Site Admin

Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

Interesting. I guess everyone should have seen this coming the day that go! launched. There never was room for a third interisland airline in Hawai'i. And that's really how they made their money. Back in the 80's and early 90's (at least, because that's when I lived in HI and experienced this), interisland fares for nonresidents were ridiculously expensive. Unless you booked some kind of discounted package together with a mainland-to-island fare, you would pay upwards of $300-400 r/t for some short flights like HNL-OGG. That's about the same distance as IND-CVG (and while IND-CVG is certainly an expensive nonstop fare, it's for altogether different reasons). The point is, both Aloha and Hawai'ian stayed in business largely by gouging tourists and businesspeople on interisland travel. Way back in the day, you could only fly from the mainland to HNL, and later on to OGG as well. So if you were going to any of the other airports in Hawai'i, you were stuck with the interisland airlines and the prices they charged. The state government coddled and protected them in both official and unofficial ways as well, because they saw a crucial need for interisland transport. And there was a two-tiered system of fares based on what your home address of record was - if you lived in Hawai'i, you generally got very cheap fares. If you were "haole" (outsider) from the mainland, Japan, etc., you paid the inflated fares. So long as residents weren't subject to the high fares, the state didn't care. So when go! came in, there was a giant hue and cry from both Hawai'ian and Aloha, with wailing and gnashing of teeth. And then the Superferry started - which also elicited a big uproar from the two dominant interisland carriers - and is certainly siphoning off even more HNL-OGG business.

The Free Market Economist side of me would say, "good riddance," to a bloated, inefficient airline. But I do hope this doesn't become simply another excuse for go! and Hawai'ian to raise fares and get back to the bad old days. Also, Aloha was a fun flying experience, and many will miss them. But in the end, I agree. It's best to let inefficient airlines die a peaceful death and be done with them.