Interisland fare wars may be a thing of the past.

The merger between go! and Mokulele Airlines combined with Hawaiian Airlines' decision to eliminate 5 percent to 8 percent of its interisland passenger seats makes higher ticket prices all but inevitable, analysts and travel industry experts said.

"I would say it's entirely possible that we will see fares in the $70 to $80 range," said local aviation industry historian Peter Forman.

"The fare war is over."

Since the June 2006 launch of go!, interisland airfares have plunged by as much as half, saving local consumers tens of millions of dollars. But the cut-rate fares, combined with higher fuel prices and excess capacity, also took their toll on airline profitability and contributed to the demise of Aloha Airlines.

After a brief hiatus with the March 2008 shutdown of Aloha, the fare wars came roaring back when upstart Mokulele partnered with Indianapolis-based Republic Airways last November to compete head-on with go! and Hawaiian.

The lowest published fare today is about $49, which is still well below the $80 to $90 from three or four years ago.

"You are back to two airlines," said Scott Hamilton, a Washington state-based aviation industry consultant.

"In a market with just two carriers, one of them can raise fares at 12 o'clock and the other will match at 12:05."

Hawaiian and go! said their recent moves were motivated by the weak economy, not by a desire to drive up airfares.

Hotel occupancies on the Neighbor Islands have plummeted to their lowest rates in two decades as a result of the global economic meltdown.

With fewer interisland travelers, Hawaiian said it has to take a more "conservative" approach, said Hawaiian CEO Mark Dunkerley.

The airline's decision to shrink the number of passenger seats by 5 percent to 8 percent next month combined with the merger between go! and Mokulele will mean that the passenger capacity for the entire interisland market will be down 12 percent to 15 percent later this year, which is closer to where the customer demand is, Dunkerley said.

"This is a natural adjustment to economic demand today," said Steve Danishek, a Seattle-based travel consultant.

"With the recession, all carriers have to face this reality."

As a part of the merger, Mokulele's three 70-seat Embraer 170 jets were removed from service by Republic and returned to the Mainland, leaving the new combined airline with go!'s five Bombardier CRJ-200 jets.

Jonathan Ornstein, CEO of go!'s Phoenix-based parent Mesa Air Group Inc., said interisland airfares will still continue to be a bargain compared to where they were before go!'s entry.

He added that fares can't go up by too much. If they do, people will stop traveling, which in turn will hurt the carriers, he said.

"There are very few things that a consumers can buy for less today than they could five years ago," he said. "If fares go to $200, then there would be a lot less people flying, and we would have a lot less revenue."

To be sure, higher fares were already in the works even before go! and Mokulele announced their merger agreement.

During the past month, crude oil prices have risen about 20 percent to about $80 a barrel, adding millions of dollars to the local carriers' operating costs.

"Eighty dollars a barrel is going to put pressure to increase prices," Forman said.

"The combination of higher oil prices plus a desire to return to profitability by the airlines is going to be a double whammy for the consumer."