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The Honolulu Advertiser
Posted on: Thursday, March 23, 2006

Airlines offer $39 interisland fares

By Rick Daysog
Advertiser Staff Writer

The interisland airfare war has begun.

Within minutes of each other, Hawai'i's two largest carriers announced last night they are slashing one-way fares by as much as half.

The move was prompted by the arrival of Mesa Air Group Inc., a Phoenix-based low-cost carrier, which has scheduled a news conference for 10 a.m. today to announce details of its planned entry into Hawai'i's interisland market. Mesa said Tuesday it will fly between Honolulu and Kaua'i, Maui and the Big Island for prices starting at $39 one way.

To match Mesa's price, Hawaiian Airlines said it will offer one-way fares as low as $39 on its interisland routes this summer. Aloha Airlines immediately matched Hawaiian's new fares with identical restrictions.

Aloha and Hawaiian said the $39 fares, which don't include fees and taxes, are good for travel between June 9 and Sept. 30 on most routes, must be purchased by April 7 and are subject to seat availability. Neither airline would say how many seats will be sold at the new low price.

The fares are the lowest in at least a year when Aloha briefly offered a special $33.80 ticket.

"We're delighted to be a catalyst for change," said Jonathan Ornstein, Mesa's chief executive officer, who was in Hono-lulu last night and will be meeting with the media today.

With lower fares "there will be more people traveling and more people will visit their friends and family and there will be more business travel," Ornstein said.

Mesa announced last September that it plans to invest as much as $50 million in a low-cost interisland carrier that will compete with Hawaiian and Aloha.

Both Hawaiian and Aloha whose lowest fares range between $70 and $80 have said they won't be undersold.

"Our customers have always been able to rely on us for the best possible fares, the highest-quality service, convenient schedules and the comfort of a modern all-jet interisland fleet," Mark Dunkerley, Hawaiian's chief executive officer, said in a news release.

Mesa's Ornstein said the increased fare competition will result in "hundreds of millions of dollars" in savings for consumers. He believes that interisland traffic has shrunk in recent years because of high fares.

The lower fares come as airlines are battling higher fuel costs. Hawaiian and Aloha also face increased competition on their routes to the Mainland.

During the past several months, America West Airlines started flying from its Phoenix home base to Maui and Hono-lulu, while Delta Airlines added an Atlanta-to-Honolulu route.

Aloha and Hawaiian have both been through bankruptcy recently. Aloha emerged from Chapter 11 reorganization last month and Hawaiian did the same in June.

Aloha and Hawaiian also have announced plans to upgrade their aircraft fleets. Aloha said yesterday that it will replace six 20-year-old Boeing 737-200s with lower cycle planes of the same model this year. The 737-200s are used on Aloha's interisland routes.

Hawaiian said last month that it will spend $31.8 million to acquire four Boeing 767-300 aircraft for its Mainland routes.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.