Posted at 11:46 a.m., Tuesday, September 3, 2002
Airlines protest antitrust exemption bid
By Frank Cho
Advertiser Staff Writer
This morning was the deadline for the public to comment on a request last month by Aloha and Hawaiian to be granted immunity from antitrust law to coordinate capacity on five major interisland air routes for a limited time.
The filings come a day after the Department of Justice filed its own objection to the exemption, saying allowing the two carriers to coordinate capacity would do "serious harm" to consumers in Hawaii.
Pacific Wings, which operates scheduled air service between smaller airports around the state, said in its 12-page filing this morning with the U.S. Transportation Department that Aloha and Hawaiian fear competition and have largely themselves to blame for their poor financial condition.
Hawaiian and Aloha airlines have said such cooperation is necessary to ensure that both survive in the interisland market, which has seen declining air travel for several years.
American Airlines was the only other airline to make a filing with the Department of Transportation this morning. It asked regulators to ensure that Hawaiian and Aloha, if granted the exemption, do not reduce seat capacity on popular interisland routes or coordinate pricing on interisland routes.
American has a code-share arrangement with both Aloha and Hawaiian airlines that allows the airlines to ticket passengers from the Mainland to O'ahu and then to a Neighbor Island destination on the two carriers.
"American is concerned that without appropriate safeguards to ensure that sufficient capacity is maintained on the intra-Hawai'i routes, passengers traveling on American beyond Hawai'i gateway cities may find it more difficult or perhaps impossible to obtain seats...," according to the filing by Carl Nelson, a lawyer for the airline.
American also asked for an extension of today's deadline to review the justice department's comments in opposition to the application.
"Our comments were delayed by the necessity to review the submission made by the Department of Justice ... just prior to a holiday weekend," American said.
A spokesman for Hawaiian declined to comment on today's filings. Aloha officials could not be reached for comment.
Bill Adams, a spokesman for the transportation department, said today that the department is reviewing the request but it was to soon to say if it will be approved.
Transportation officials had already extended the deadline for comment once on the request of Pacific Wings. They have said they will make a decision by the end of the month.
In its filing Friday, justice officials said that neither airline is in imminent danger of failing and that the anti-competitive effects of an exemption could last well beyond the limited life of the agreement.
The sharply worded objection by the Justice Department has been the strongest yet against the effort by the two carriers to coordinate operations.
An influential agency, the Justice Department's opposition now raises questions on how it might affect the Department of Transportation's decision on whether to approve the carriers' request.
Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.