DOT to rule on airlines' exemption request today

By Frank Cho
Advertiser Staff Writer

The U.S. Department of Transportation is expected to rule today on a controversial request by Aloha and Hawaiian airlines to coordinate some of their operations in an effort to stem millions of dollars in losses since Sept. 11.

Aloha and Hawaiian applied for a one-year exemption from antitrust laws to coordinate passenger-seat levels between five Hawai'i airports under the recently enacted Transportation Security Act, which was passed by Congress after the Sept. 11 attacks to help financially struggling air carriers reduce their costs.

Bill Mosely, a DOT spokesman, said that if the application is approved today, the airlines would have a full year to operate under the exemption as the law intended.

Receiving approval from the agency would clear a major hurdle for the airlines as they try reduce costs and find profitability.

A Hawaiian Airlines spokesman declined comment on the exemption request last week. Aloha Airlines said it will wait to see if the DOT will approve the application before commenting.

Hawaiian and Aloha both suffered steep drops in interisland travel immediately following the Sept. 11 attacks on the Pentagon and World Trade Center. Both airlines also have acknowledged that the decline in interisland travel was a trend that afflicted them long before the attacks because of increased direct flights to the Neighbor Islands.

Hoping to reverse the falling passenger loads and mounting red ink, the airlines won support from Gov. Ben Cayetano to seek an antitrust exemption from federal transportation officials.

The exemption, if granted, would allow the carriers to coordinate their efforts to reduce costs by consolidating passengers on fewer flights.

But the plan has received stiff opposition from the U.S. Justice Department and a Maui commuter airline concerned about competition.

The Justice Department said an exemption would hurt consumers because it could lead to both higher fares and fewer flights.

Kahului, Maui-based Pacific Wings argued against the exemption in a filing with the federal government saying the carriers could cut capacity without the antitrust exemption.

Aloha and Hawaiian so far are the only carriers in the nation that have taken advantage of the Transportation Security Act by applying for the antitrust exemption, Mosely said.

Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.