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The Honolulu Advertiser
Posted on: Tuesday, April 1, 2008

Remaining Isle carriers move to fill void from Aloha's closing

By Greg Wiles
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

At the Aloha Airlines ticket counter yesterday, Hawaiian Airlines opened a counter to help passengers who were holding no-longer-valid Aloha tickets to the Mainland. Hawaiian put those people on a standby list.

GREGORY YAMAMOTO | The HOnolulu Advertiser

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Hawaiian Airlines said last night it is looking to acquire more Boeing 717 aircraft as it races to fill the void left by the end of Aloha Airlines' passenger operations. go! airlines also is considering adding more aircraft.

"Hawaiian has a team working on acquiring more B717 jets for our interisland fleet," said Mark Dunkerley, Hawaiian Airlines president and chief executive officer, in an e-mailed statement.

"It's a top priority for us and we are looking around the world, but we don't have a set timeframe yet as to when more of these aircraft will be added to our fleet."

Aloha ended passenger flights last night as money problems brought an end to more than 60 years of flying residents statewide and landed the airline in bankruptcy court. The carrier is letting go more than 1,900 of its 3,500 workers as it looks for buyers for its remaining businesses in aviation services and air cargo. It has said that airfare competition from the entry of go! airlines in 2006, along with rising fuel prices, added to its financial woes and inability to attract a buyer.

Aloha was the No. 2 interisland carrier and had offered between 11,000 and 13,000 seats between the islands daily, said Thom Nulty, Aloha's chief marketing officer. Hawaiian has already said it will boost capacity by 6,000 seats daily by scheduling more flights for its about 123-passenger Boeing 717 jets and adding a 254-seat Boeing 767 into the interisland service.

go! has said it will boost seat offerings by operating all seven of the 50-seat jets it has in Hawai'i. Previously, two go! jets had been idle. With their added service, go! will have 2,000 additional seats each day. It also said yesterday it may add more aircraft here.

The next several days will help spell out how much Aloha's demise will disrupt the market. Data from the state Department of Business, Economic Development and Tourism show Aloha on average scheduled about 13,600 seats daily in the interisland trade last year.

Blaine Miyasato, Hawaiian vice president of customer service, said the company was seeing brisk bookings on its Web site yesterday from what could have been former Aloha customers. The airline is advising people who've previously booked and paid for Aloha flights with credit cards to get refunds from the card companies.

Both Hawaiian and go! are also accepting Aloha tickets for flights during the next several days.

SOME JETS UNSUITABLE

Analysts yesterday said Hawaiian may not want to operate the 254-seat 767 jet on interisland routes on a long-term basis because the jet is designed to operate on longer-distance flights. Moreover, they said the airline could have a difficult time finding 717s, which ended production in 2006.

"Hawaiian is in a unique position to do very well here," said airline industry consultant Robert Mann. But he said 717s are difficult to find since airlines that operate them generally like the aircraft and want to hang on to them.

"You can't go to the desert and find one."

Mann said there are other considerations for Hawaiian in ramping up interisland operations, including not expanding so fast that it compromises the level of service it has for its existing operations.

"Who knows, they could do so well they could bring on some of the 1,900 employees from Aloha," he said.

Scott Hamilton, a Washington state-based aviation industry consultant, said even if Hawaiian finds aircraft immediately, they are likely to have cockpits configured for other airlines.

He said go! airlines probably could bring in more of its CRJ-200 aircraft from the Mainland, because they probably have been replacing the 50-seaters with larger 90-seaters in some Mainland markets. He said there may not be any of the larger 90-seat version of the aircraft to introduce here.

"I don't think they have any surplus 90-seaters," Hamilton said. "You go with what you got."

PENDING GO! LAWSUIT

There is one other factor for go! to consider in bringing in more aircraft, Mann said. That is the pending lawsuit Aloha Airlines filed against go!'s parent company, Mesa Air Group, alleging the Phoenix-based company misused confidential information in an attempt to drive Aloha out of business.

Aloha has alleged Mesa received proprietary information when Aloha was in bankruptcy previously and was selling tickets below cost to damage Aloha.

Mann said it will be interesting to see how go! responds in pricing and scheduling. If they raise ticket prices or bring in many aircraft, it might tend to support Aloha's allegations about predatory pricing and go! trying to drive the company out of business to grab market share, Mann said.

"They have to be fairly careful as to what they do now," he said. "It really is an interesting situation."

Hamilton disagreed, saying go!'s reaction to Aloha's grounding of passenger flights shouldn't be a factor in the court case.

"The issue has been predatory pricing, it hasn't been capacity," he said. "The allegations are there already. go! could bring in a 747 and it wouldn't make any difference."

Reach Greg Wiles at gwiles@honoluluadvertiser.com.