Both Aloha Airlines and Hawaiian Airlines — which filed for bankruptcy protection in March — made profits in the last few months of 2003. But officials from both airlines also heard the complaints of passengers angry over higher ticket prices, longer lines, fewer flights and the death of what had been a relatively convenient, inexpensive way to travel between islands.

"What happened in 2003 is the world changed dramatically," said Hawaiian's president, Mark Dunk-

erley. "It has obviously generated controversy and it has given rise to a change in the pattern in the way in which we live and travel."

The old system, Dunkerley said, had Hawaiian operating more like a bus service than an airline.

"It was not only utterly unprofitable, but unstable in the long term," he said.

Bracing for change

The past few tumultuous years have made working in the airline industry a test in flexibility and perseverance. Through it all, many employees say they are confident the airlines will remain an important part of Hawai'i's economy.

ALLIE TERUYA

"Some of my family and friends would say, 'Are you sure you want to go back after what happened?' " Teruya said. "You just have to take it as it comes."

Going into 2004, Hawai'i's air industry faces even more turmoil.

CHERYL FOX-WEALL

The attitude is "we need to go through change," she said. "We all want to be successful."

Sean Ross, 39, chief agent in reservations at Hawaiian Airlines, trains new reservations agents.

He said the agents must constantly adjust to changes in the airline industry, from security upgrades to electronic ticketing to savvier travelers who shop for the lowest air fares.

"The customer's becoming smarter. They want more for less," Ross said.

Industry in transition

The skies have gotten more crowded with Mainland airlines flying directly to the Neighbor Islands and bypassing the Honolulu interisland hub.

But an anticipated increase in interisland travel by tourists has politicians and airline officials hoping demand will rise while air fares stabilize or even drop.

The announced sale of Aloha Island Air by Aloha Airlines could be a wild card in the market. So would a potential new interisland airline being considered by Jim Delano, former president of Lion Coffee.

"It's an idea more than a proposal," said Delano, who nevertheless has spoken to Gov. Linda Lingle and Hawai'i's congressional delegation about the benefits of another interisland carrier.

For Hawai'i's largest airline, "the inescapable fact is that the pie of interisland travel that we're all trying to share is shrinking all of the time," Dunkerley said. "It is getting much smaller."

Any new airline also would compete with Maui-based Pacific Wings, which has gained an interisland following by flying nearly all the same routes as Aloha and Hawaiian.

Despite the sale of Aloha Island Air, Pacific Wings owner Greg Kahlstorf worries that passengers will end up with fewer choices.

"You'll see a move toward more consolidation, less competition, fewer choices by the consumer and more domination by the two companies that dominate and that have always dominated the market," Kahlstorf said.

The potential new owners of Aloha Island Air have been "hand selected to fill that role," Kahlstorf said. "What kind of airline can compete with an entity that has the backing of the two major airlines in the state?"

As Rep. Neil Abercrombie said, "It appears we know what's gone. But we don't have a clear idea of what's here and what's coming."

Others have tried and failed to start up airlines to compete with Aloha and Hawaiian in the past, Abercrombie said. But in today's market, customers may be more willing to try something new.

"People are complaining that the convenience of prices isn't there, the convenience of scheduling isn't there, the lines are horrendous and the prices are exorbitant," Abercrombie said. "You may have had a public that was indifferent in the past (to new airlines). Now they may be saying, 'Hey, I'm going to give these guys a shot.' "

Improvements sought

State Sen. Rosalyn Baker, D-5th (West Maui, South Maui), sat in Honolulu International Airport waiting for a flight home to Maui and said she was encouraged for passengers in 2004.

She and other Neighbor Island legislators met privately with Aloha's president and chief executive, Glenn Zander, this month and were assured some fares would fall.

It was a positive sign after a year filled with complaints, Baker said.

Nevertheless, she said, "the old way of airline travel is only a happy memory."

Zander, who was traveling, was unavailable to comment on the coming year. But Dunkerley and others are optimistic 2004 will be a good year for both passengers and carriers.

Among the many changes to the industry is a shorter booking window for customers, who often find last-minute deals on the Internet.

While Hawaiian and Aloha encourage online booking and offer discounts to Web customers, it also makes it harder to plan, Dunkerley said.

"Our horizons used to be months away," Dunkerley said. "Today, we can't do that. So while we don't see any dramatic shift in the marketplace at the moment, we only have good foresight for a couple of weeks."