Airlines await exemption ruling
By Frank Cho
Advertiser Staff Writer
Federal transportation officials have accepted an application by Aloha and Hawaiian airlines for an antitrust exemption that would allow them to cooperate for a limited time, and said the agency will issue a decision by a federally mandated Oct. 1 deadline.
The two airlines filed the application July 31 with the federal Department of Transportation seeking an exemption that would allow them to look at how full each other's planes are on interisland routes and coordinate interisland air service.
In a notice posted on the transportation agency's Web site yesterday, transportation officials wrote that the carriers' joint application has been reviewed and found to be "substantially complete."
The notice opened a 15-day period for the public to comment on the request before a decision is made next month.
"It's good to know that they are confirming that the application is complete, so that means that the process can move forward," said Keoni Wagner, a spokesman for Hawaiian Airlines. "It also shows that they are expediting the comment period, which is also good. It's another step in the process."
A spokesman for Aloha would not comment.
The transportation department notice clears the last hurdle for the two interisland carriers, which have been struggling financially since Sept. 11, before a decision that could allow the them to cooperate on planning interisland service.
Under the proposed agreement, the airlines have said they plan to review each other's routes to determine how many routes can be cut, and then evenly split the remaining seats and monitor sales to make sure one airline does not end up with more profits than the other.
The airlines have said coordination of capacity will not eliminate any airports served by the carriers. Aloha's sister airline, Island Air, is not part of the request.
The airlines have said such cooperation is necessary to ensure that both survive.
Earlier this week, Hawaiian reported losing more than $31 million during the second quarter of this year; Aloha also has said it continues to struggle.
But critics fear the exemption will mean higher ticket prices for consumers.
Federal antitrust laws normally would prohibit the competitors from cooperating. But as part of an aviation security measure passed after Sept. 11, Congress created a limited antitrust exemption that applies to airlines with intrastate operations affecting travel and commerce. Mainland flights would not be affected.
If the request is approved, the airlines could cooperate until Oct. 1, 2003.
Reach Frank Cho at 525-8088 or fcho@honoluluadvertiser.com.
