Hawaiian, Aloha working on exemption approval

By Susan Hooper
Advertiser Staff Writer

Hawaiian and Aloha airlines are preparing a joint application for a federal antitrust exemption that would allow them to cooperate in several areas of their operations, including interisland routes and schedules.

Gov. Ben Cayetano, who must sign off on the application before it is sent to federal officials for their approval, has received a draft of the general cooperation agreement, Hawaiian Airlines spokesman Keoni Wagner said yesterday.

Wagner would not provide details but said the application's "primary area of concentration" is interisland capacity. An Aloha spokes-man said the airline was working on the application but did not have details.

A spokesman for Cayetano said yesterday that the governor has asked the airlines to make some revisions in their proposal and those have not yet been completed.

Cayetano's spokesman, press secretary Cedric Yamanaka, did not have details on when the airlines submitted their proposal to Cayetano or when the governor sent it back for revisions.

The Hawai'i attorney general's office has been working with the airlines on their application, according to Rick Keller, the state's first deputy attorney general.

Keller said Cayetano has not received anything final and that, because of the complicated antitrust issues involved in the agreement, the governor "will not sign anything or agree to anything until we advise him formally on this matter."

Keller said his office began looking at the airlines' proposals last month. He said he expects the application will be ready for the governor's review "within a week or so."

Under the terms of the federal law creating the antitrust exemption, Cayetano must agree that the exemption is necessary, Keller said. The application then goes to U.S. Transportation Secretary Norman Mineta for his approval.

The antitrust exemption provision is part of a sweeping aviation security measure passed by Congress and signed into law by President Bush in November. The attacks had a devastating effect on the nation's commercial airline industry, with carriers, including Hawaiian and Aloha, experiencing a drastic drop in business.

The provision would allow the local airlines to operate outside federal antitrust law that prohibits carriers from communicating with one another on schedules, pricing and other competitive issues. The exemption expires Oct. 1, 2002, but could be extended for another year.

After the measure became law last November, representatives of the two carriers said they were studying the legislation to see how they could proceed under its terms. One month later they announced plans to merge, and pursuing the antitrust exemption took a back seat to those efforts, officials said.

Some weeks after the merger fell apart in mid-March, officials with Hawaiian and Aloha said they were again looking at applying for the antitrust exemption.

Reach Susan Hooper at 525-8064 or shooper@honoluluadvertiser.com.