Aloha, Hawaiian merger may get state monitor

By Susan Hooper
Advertiser Staff Writer

The possible long-range effects of the merger of Aloha and Hawaiian airlines came under close scrutiny yesterday by a panel of senators who questioned what fares and service would look like after the airline's proposed five-year guarantees end.

"There are still a lot of unanswered questions about whether the merger will have a negative impact on consumers," Sen. Ron Menor, D-18th (Waipio Gentry, Wahiawa), chairman of the Senate Committee on Commerce, Consumer Protection and Housing, said after the four-hour informational hearing.

Menor said he is considering introducing a resolution to allow the state Office of Consumer Protection to monitor airfares and service provided by intrastate airlines. Currently, federal airline deregulation law bars state officials from such oversight.

The informational hearing came as efforts to complete the merger move forward and some opposition has started to surface. Testimony came from representatives of the state attorney general's office; Department of Transportation; Aloha and Hawaiian airlines; Turnworks Inc., the Houston turnaround firm engineering the merger; airline employee unions; the Citizens for Competitive Air Travel; and Pacific Wings, a smaller interisland carrier.

Officials leading the merger have offered a five-year guarantee on fare caps to the state attorney general's office, but lawmakers questioned what would happen after that. Airline officials said that industry competition would ensure quality prices and service.

Senators also raised concerns about the effect of the merger on employees. Officials have said that less than 10 percent of the current combined work force of about 6,000 would likely lose work. But lawmakers questioned whether further cuts may occur.

Menor also asked what assurances Turnworks officials could make that the new carrier would not be sold to an out-of-state company.

"We've not made any assurances," said Steve DeSutter, executive vice president with TurnWorks. "The airline will be a publicly traded airline. Those decisions are in the hands of the public board and public shareholders."

Sen. Cal Kawamoto, D-19th (Waipahu, Pearl City), chairman of the Senate Committee on Transportation, Military Affairs and Government Operations, said lawmakers may introduce a resolution reinforcing a state Department of Transportation proposal that about 50 percent of the space in the interisland terminal be left available for a possible competitor to the merged airline.