In business as in life, death is one of the few absolutes. In the end we all must go. And in the world of business, yesterday, the end came to one of the biggies. Living aloha in Hawai‘i just got
In business as in life, death is one of the few absolutes.
In the end we all must go. And in the world of business, yesterday, the end came to one of the biggies.
Living aloha in Hawai‘i just got a little more difficult.
Some 61 years of operation in Hawai‘i could not hedge Aloha Airlines’ financial situation against the onslaught of rising fuel prices, a second bankruptcy and an interisland fare war.
In the state’s No. 1 industry, the bare-knuckle tactics employed to respond to competition brought on by go! entering the interisland market two years ago in June, seem to have accomplished what was intended. A major competitor is gone and fare hikes for the remaining airlines are likely, possibly before this newspaper hits driveways in the morning.
Recovering loss will be a very big part of the surviving airlines’ acumen in the weeks to come. Hawaiian and Aloha combined claimed $65 million in losses last year, while go! claimed $20 million. That kind of bleeding will require serious recovery.
When Aloha came out of its first bankruptcy in 2006, Mesa Air Group (operator of go!) announced within hours it was entering the interisland market. Mesa’s entry into the market came shortly after Aloha refused to partner with the go! operator to help the company enter the interisland market.
Some feel go! has a grudge.
The basis of Aloha’s current lawsuit against Mesa centers on the alleged use of Aloha documents by Mesa during the company’s first bankruptcy.
The basis of the Hawaiian Airlines lawsuit against Mesa also centers on the acquisition of documents during business dealings.
As go! entered the market and quickly sent fares into a spiral, we the consumer responded by snapping up the cheap tickets. Though accounts of the behind-the-scenes jockeying of the companies were widespread in the press, few were concerned with the long-term implications as overnight lines formed at airport ticket counters statewide.
Many $1 fares persisted for days. Those short-term gains helped set the stage for the events occurring now. The “airline of the people” moniker of Aloha and a 61-year-old brand means very little when a few more dollars in the pocket seems so much more important. It was only a matter of time before one of the companies was priced out of the game.
Who’s to say what effect the fare war had on the Hawaii Superferry as it stumbled to begin service during the airlines’ fare war. Many can remember the arguments against the high priced ferry during the days of the $39 roundtrip airfare.
It is disconcerting to see so many put out of work by the Aloha closure and the insecurity it will deliver upon so many families. It is also disconcerting to think of the fares as they tick upward in the days to come. As families all over the state deal with the rising cost of air travel, now 1,900 more of us are unemployed. Here on Kaua‘i it will cost 40 to 50 jobs alone. As stranded travelers scramble to rearrange travel plans in a much more impacted industry, their cost will become the surviving companies gain.
So as we mourn the loss of the Aloha brand and remember the past year’s fare wars, let’s remember when another airline appears on the horizon … it will be time again to get in line.
