Aviation bill clears path to interisle air cooperation
By Andrew Gomes
Advertiser Staff Writer
Aloha and Hawaiian airlines could begin immediate discussions over how they might cooperate on interisland service now that President Bush has signed into law a national aviation security bill.
The law, which establishes new airport security measures and procedures, also exempts Hawai'i's interisland carriers from federal antitrust laws prohibiting airlines from collaborating on anything that could reduce competition or affect fares.
The exemption, designed to assist Hawai'i's air transportation system and local airlines hit hard by a downturn in tourism and the economy since the Sept. 11 attacks, will allow the local airlines to work together on everything from service and security to routes and pricing.
No meetings scheduled
Officials with Hawaiian and Aloha said yesterday they had few details about what options might be considered, and said no meetings have yet been scheduled.
Keoni Wagner, Hawaiian's spokesman, said flight scheduling is the paramount issue, and added that the airline has no plans to discuss or coordinate fares and ticket pricing with other interisland carriers.
Stu Glauberman, Aloha's spokesman, said the airline does not yet have a good idea what it can or cannot do under the exemption.
"We're still studying the legislation to see what its parameters are," he said.
Jennifer Goto Sabas, chief of staff for Sen. Daniel Inouye, who added the Hawai'i exemption to the aviation security bill, said routes were the main concern when the carriers requested the exemption.
"When the carriers made the request, it was really more the scheduling and economies of scale," she said. "Pricing did not come up."
Higher prices feared
Some airline industry analysts have raised concerns that coordinating service, and perhaps collaborating on pricing, would result in diminished service and higher fares in the market. Union officials representing some of the employees at Hawaiian and Aloha have expressed concern that combining service would result in a loss of jobs in addition to the 680 already cut by the two carriers since Sept. 11.
Under the new law, whatever proposal the airlines might develop would have to be sent to Gov. Ben Caye-
tano, who would have to determine whether it is necessary to "ensure the continuing availability" of interisland transportation.
If declared essential to interisland service, the proposal would then be sent to U.S. Transportation Secretary Norman Mineta for approval.
Cayetano has asked state Transportation Department Director Brian Minaai to discuss with the airlines what arrangements they desire and why they would be necessary to ensure service.
Sept. 11 effects linger
Hawai'i's airlines continue to be affected by the downturn in travel since the Sept. 11 attacks, though neither Aloha or Hawaiian yesterday would provide specific details.
The two major carriers have been relieved of paying $12 million in annual landing fees to the state and should receive more than $30 million in federal aid.
Glauberman said the general business decline that has hurt Hawai'i tourism "is continuing." Aloha is making 121 daily interisland departures, following a 26 percent cut in service in September.
Aloha's sister company, Island Air, which flies small propeller aircraft between islands, increased its schedule from 38 flights a day to 54 flights a day last month.
Hawaiian yesterday reported that it carried 15.8 percent fewer passengers in October on its interisland and Mainland routes. But because of a 20 percent cut in service, the percentage of filled seats rose to 79.7 percent, a 4.5 percent increase over October 2000.
The antitrust exemption for interisland carriers is scheduled to end Oct. 1, 2002, but could be extended for a year. Mineta also would have the authority to end the provision earlier.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
