• Aloha rescue, a mistake • Leave manipulators out Aloha rescue, a mistake I offer my opinion on the issue of an Aloha Airlines rescue by the state. It would be a very big mistake. The market is smarter than
• Aloha rescue, a mistake
• Leave manipulators out
Aloha rescue, a mistake
I offer my opinion on the issue of an Aloha Airlines rescue by the state.
It would be a very big mistake.
The market is smarter than we are and it has been functioning appropriately. Please slow down or help stop this improper use of taxpayer money.
Aloha stopped being the Aloha we knew and loved around the turn of the century. That is when Aloha’s owners and management decided that being a successful interisland carrier was not good enough for Aloha. They made the strategic decision to branch out and aggressively compete with the major U.S. and international carriers for the Mainland to Hawai‘i business. This decision was made even though this market segment was very popular with the then current carriers and extremely competitive without the addition of new carriers. It is unclear to me what competitive advantage Aloha believed they had over the big dogs.
Opening new markets in the aviation business when these markets were already adequately served must be a very expensive business. More and bigger planes, more pilots, high price competition for gate positions in these major airports obviously required major investment dollars. Operating 3,000 to 5,000 mile flights with only partial loads must have increased the expense burden. Yet, Aloha charged ahead and became a competitor in 10 of the top 20 airmarkets to the Mainland, more than the eight locations they serve in Hawai‘i.
How did they fund this investment? On the backs of the loyal interisland customers in their original Hawai‘i markets? Is it more than a coincidence that Aloha’s fares which had been around $100 for interisland round trips, ballooned to $100 (plus or minus) for one way tickets. This was an oppressive burden on Hawai‘i families. I believe they misused the loyalty of the Hawai‘i customers to help fund the low cost fares necessary to forge entry into the Mainland market.
As happens in a free market, when both Aloha and Hawaiian had raised rates to such a high level, the market noticed. Enter go!
Aloha and Hawaiian brought this on themselves. Through a variety of marketing techniques, go! has succeeded in bringing the overall level of fares back to a reasonable level. Thoughtful interisland passengers should be thankful and not overly concerned which of the three airlines survive.
But shouldn’t the people of Hawai‘i be loyal to Aloha and willing to help them financially with their taxpayer dollars? I think not. Today’s Aloha is not the same company that has been a partner with the Hawaiian Islands as they have grown and matured in a rapidly changing world.
The Aloha that emerged from its first bankruptcy is a different bird. Employee compensation has been reduced and/or restricted. I believe employees no longer have a pension plan. Ownership of Aloha rests in only a pair of hands. Some 68 percent is owned by a billionaire from the Mainland and 26 percent is owned by another investor group. If the Senate uses taxpayer dollars to “rescue Aloha,” my guess is they will only be helping these two investors reduce their losses until they sell the company.
Do these owners deserve this support? I don’t think so. They continue to trumpet that the cause of their problem is soaring fuel prices and predatory pricing by a new competitor. Is that accurate? Fuel price is a problem for every airline, not just Aloha. The customers end up paying that bill. go! did have an impact, but wouldn’t have if Aloha and Hawaiian didn’t raise fares so drastically to the detriment of Aloha’s customers and I believe the benefit of expenses of Aloha’s aggressive thrust into the Mainland market. To my knowledge, the management of Aloha has not shared the financial results of this Mainland strategy with the public. Could this be the third leg (unsaid) of the bankruptcy stool?
The Senate should not supply aid to Aloha with taxpayer money if they find out the Mainland thrust which the interisland customers funded through dramatically higher fares, proves to be a significant contributor to the need for the bailout.
What about the 3,500 Aloha employees? If the Senate doesn’t help, aren’t we neglecting them? Again, I don’t believe so. Limping along under the current management does not seem to be a win for them.
No pay raises. No pension. Maybe more cutbacks.
Aloha’s owners have said their main goal is to sell the business. I believe they will and that this will turn out to be a better prospect for the employees. Any buyer other than Hawaiian (not likely) will need the property and especially the people of Aloha. It isn’t feasible for any buyer to import to Hawai‘i the resources to run an airline. The same goes for the cargo operation. Hopefully, as happens frequently in takeovers, the employees would be brought under the same pay and benefits program as the acquiring firm. To me this would be far superior than keeping the current operation chugging along.
Please help let the free market run its course.
Fran Brennan
Princeville
Leave manipulators out
I would like to address John Hoff’s letter (“Tribes, now and then,” Letters, March 29):
I am a Native American and agree with the way he described what the government did to all Native cultures. While his opening paragraph, “‘Hope’ and ‘Change We Can Believe In’ are the cornerstones of Barrack Obama’s campaign for the president of the United States” was positive, I can only hope his final words “Can ‘Hope’ and ‘Change We Can Believe In’ have any meaning in our lives when instead of electing leaders we elect manipulators?” mean we need to be sure to elect Obama and leave the manipulators out so change can finally occur.
Barack Obama is the candidate who wants positive change for everyone, something Native people continuously strive to achieve.
Carlos Nosie Sr., San Carlos Apache Nation
Currently residing in Lihu‘e
