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The Honolulu Advertiser
Posted on: Wednesday, May 17, 2006

Interisland fare war may last for months

By Lynda Arakawa
Advertiser Staff Writer


Hawaiian, Aloha and go! offer $59 roundtrip interisland fares, with these restrictions:

  • Must travel on weekdays

  • Good only from June 9 to Sept. 30

  • Must buy tickets by Monday

  • Subject to seat availability

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    Interisland travelers should continue to enjoy lower airfares for months as the price war among local airlines heats up.

    Mesa Air Group Inc., operator of go!, offered a $59 interisland roundtrip fare last week, which was matched by Hawaiian and Aloha. In March, go! announced a $39 one-way special that Aloha and Hawaiian also matched. Now Mesa says that special won't be gone anytime soon.

    "I think there's a very strong chance that the $39 fare will be around for a while," Mesa chairman and CEO Jonathan Ornstein said yesterday. "That could almost become a trademark for us, at $39."

    The fare war has taken off even though go! doesn't begin flying until June 9.

    As a startup, battling two of Hawai'i's best-known brands, go! has to keep the heat on. "We know we need attractive fares," Ornstein said.

    Aloha and Hawaiian say they have no intention of backing down. Both have said they will not be undersold.

    "From the consumer point of view, it can't do anything but help," said Michael Boyd, president of Colorado-based airline consultancy The Boyd Group.

    Whether the three airlines can maintain these low fares and remain profitable is an open question. Aloha and Hawaiian both recently emerged from bankruptcy after painful cost cutting in the face of high fuel costs.

    Boyd says all three airlines are likely to survive the test.

    "Aloha and Hawaiian are now well-managed, strong airlines. ... And now you have this go!, and that's another well-managed operation," Boyd said. "Anytime you cut your fares, you've got a challenge on your hands. But you're talking about newly energized airlines with newly energized management."

    In the meantime, the flying public can cash in.

    Hilo resident Richard Kunimoto said he doesn't usually make interisland trips, but now he's looking into taking advantage of the lower fares.

    "Oh, yes, I'll consider it, sure," he said. But the 64-year-old retiree said he'll probably book a flight on Aloha or Hawaiian.

    "I'm not familiar with the Mesa group," he said. "I'm more familiar with Aloha Airlines and Hawaiian."

    Mesa's Ornstein acknowledged that challenge.

    "Clearly, there will be people that will do that," he said. But he added that go! has booked "thousands" of people.

    "So we are either generating new traffic or we're getting people to try us who might otherwise fly someone else," he said. "Bookings have exceeded our expectations, and we're just going to keep focusing on the product."

    Kapolei resident Josephine Lee also is planning on taking advantage of these fare specials. She travels to Kaua'i about once a month to take care of her brother.

    "Anytime (I) can save a little bit of money, I would," she said.

    The three carriers' $59 round-trip special applies to travel on weekdays from June 9 through Sept. 30, subject to seat availability. Tickets must be purchased by May 22.

    If the special fare is not available in both directions, Hawaiian and Aloha will allow customers to buy a $29.50 one-way ticket and combine it with a regular one-way fare.

    Go! will operate out of the commuter terminal at Honolulu International Airport and will fly 50-passenger Bombardier CRJ 200 jets. The carrier said it has signed an agreement with state officials for more than 5,000 square feet of space. The commuter terminal is mauka of the interisland terminal and serves smaller aircraft traveling to the Neighbor Islands, such as Pacific Wings and Island Air.

    Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.