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The Honolulu Advertiser
Posted on: Wednesday, December 19, 2001

Aloha, Hawaiian deal may remake Hawai'i's airlines

Previous story: Hawaiian begins exploring joint activities with Aloha
 •  Previous story: Aviation bill clears path to interisle air cooperation

Advertiser Staff

Hawai'i's two interisland carriers are expected to announce a deal today that would restructure and reshape the local airline industry.

In November, the two carriers received a federal antitrust exemption that allows them to collaborate on schedules and prices and share revenues to cope with the tourism downturn.

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Speculation among employees at both Hawaiian and Aloha airlines yesterday was wide-ranging, with possibilities including coordination of some operations and a merger of the two companies.

Aloha Airlines spokesman Stu Glauberman declined to comment last night. "Talks are ongoing," he said. Hawaiian officials did not return calls.

Both airlines have struggled since the Sept. 11 terrorist attacks. Hawaiian and Aloha have each cut 20 percent of their routes and have laid off hundreds of workers. They also have received emergency federal aid money.

In November, the two carriers also received a federal antitrust exemption that allows them to collaborate on schedules and prices and share revenues to cope with the tourism downturn.

It was unclear yesterday what form a deal between the airlines might take. A merger likely would need to be reviewed by the U.S. Department of Justice for possible antitrust violations. Justice officials likely would turn down a merger if they found it would reduce competition unacceptably. But a merger might be allowed if it was determined that one or both of the companies would fail without it.

Aloha reported a $1.25 million loss at the end of the third quarter Sept. 30. Hawaiian reported a $29 million profit.

Hawaiian is a publicly held company. Aloha and its sister company, Island Air, are privately owned. Stockholders include members of the families of the late Hung Wo Ching and Sheridan Ing.