Hawaii's Interisland Air War - Chapter 2

[mel]

Re: Hawaii's Interisland Air War - Chapter 2

Regardless of whether you hate Go! and $19 airfares or not, the bottom line is this. More locals are flying interisland this year than they did a year ago when the lowest fare offered by the incumbents were at $79 a pop. And while the $19 and even the $39 fares may be here for only the short run until someone goes belly-up, I along with the thousands of interisland flyers will enjoy the ride.

I have 2 discount trips coming up over the holidays, one which I would not have taken had the fares been at the higher prices. Low fares are definitely a motivator and most customers don't care about loyalties to one airline over another because this is a pocketbook issue for the end users (and the airlines but in a different sense).

Enjoy the ride.

[aloha-anon]

Re: Hawaii's Interisland Air War - Chapter 2

Regardless of whether you hate Go! and $19 airfares or not, the bottom line is this. More locals are flying interisland this year than they did a year ago

Enjoy the ride.

Did you catch the part about while there is a mere 3% increase in ridership, there is a whopping 20% increase in available seats? Pure madness what these airlines do to each other.

[aloha-anon]

Re: Hawaii's Interisland Air War - Chapter 2

Todays Star Bulletin article says,

"Last week, U.S. Bankruptcy Judge Robert Faris released the text of a previously sealed e-mail message in which Mesa's chief financial officer, George Murnane III, told a consultant that it would be a "home run" if Mesa were to drive Aloha out of business without another airline stepping in to replace Aloha. Murnane also said just a week before go!'s launch that Mesa's foray into Hawaii "makes no sense" if Aloha remained in business, and that rather than simply waiting for Aloha to fail, Mesa "should be the ones who give them the last push."

It's difficult to tell how damaging a shove Mesa has managed to deliver to Aloha so far. Aloha, which is privately held, does not release passenger data".

That made me curious, so I went to the Advertisers archive of the actual court filing here and found the referenced e-mail.

Mesa claims that, in or around April 2005, Mesa began to think about
acquiring or forming a business alliance with Aloha Airlines, Inc.

At least at one time, Mesa hoped to drive AQ out of business. Mr. Murnane
stated in a declaration that “[a]t no time did Mesa base its business plan or decision to enter the Hawaii inter-island market on [AQ] or [HA] exiting this market.” In his deposition, he said that Mesa had not even done any analysis to determine what would happen to Mesa’s business if AQ were to cease operations. Both statements are false. One week before Mesa announced that it planned to enter the interisland market, Mr. Murnane wrote, in an email to Mr. Garfinkle, “I agree that if we assume AQ stays in market and in business forever, this project makes no sense. We definitely don’t want to wait for them to die, rather we should be the ones who give them the last push. . . . Clearly if we can get [AQ] out of the market without anyone else stepping in this is a homerun.” Similarly, HA has proven that, contrary to Mr. Murnane’s sworn testimony, Mr. Garfinkle prepared a set of projections based on the assumption that AQ would reduce its flights and go out of business.

those dirty RATS

[mel]

Re: Hawaii's Interisland Air War - Chapter 2

3%, 6% or 10% increase... an increase is an increase. Most consumers are happy with the fares and as I have said time and again, all consumers who are thinking about going to neighbor the islands, do it now before one of the airlines dies and prices go back up. It is the market of "now" with the low fares.

As for the glut of seats, well perhaps if the airlines offered more of them for the lower fares, the seats would fill up. What is more expensive? Flying a plane with a few high paying passengers half empty or flying a plane full of discount fare passengers?

If the incumbents would like to harvest some loyalty out of their local customers, perhaps offering the popular flight coupons that allowed passengers the flexibility of flight without having to suffer from change fees whenever they wanted to fly, no matter how close or far away from flight day and time they were. A coupon book offer by the airlines would lock me into that airline if I decided to buy.

Another place to be competitive is to eliminate the change fees. Once upon a time when we flew with coupons, there were no change fees. Even without coupons before 9-11 there were no change fees in the Hawaii interisland market. At least I never encountered or heard of them until after the year 2001 when people were generally frightened away from flying.

[Miulang]

Re: Hawaii's Interisland Air War - Chapter 2

Aloha Airlines isn't going to stand on the sidelines anymore. They just filed a lawsuit against Mesa/go! citing the same reasons that HA did when it filed its suit. Aloha also wants an injunction to stop go! from selling underpriced tickets.

If the HA settlement is any kind of precedent, the court will probably throw out the injunction part but rule that Mesa did use proprietary information from Aloha in order to gain an advantage over Aloha. If that's the case, then go! will have to ante up to Aloha too, which would help Aloha financially.

Miulang

[joshuatree]

Re: Hawaii's Interisland Air War - Chapter 2

3%, 6% or 10% increase... an increase is an increase. Most consumers are happy with the fares and as I have said time and again, all consumers who are thinking about going to neighbor the islands, do it now before one of the airlines dies and prices go back up. It is the market of "now" with the low fares.

As for the glut of seats, well perhaps if the airlines offered more of them for the lower fares, the seats would fill up. What is more expensive? Flying a plane with a few high paying passengers half empty or flying a plane full of discount fare passengers?

If the incumbents would like to harvest some loyalty out of their local customers, perhaps offering the popular flight coupons that allowed passengers the flexibility of flight without having to suffer from change fees whenever they wanted to fly, no matter how close or far away from flight day and time they were. A coupon book offer by the airlines would lock me into that airline if I decided to buy.

Another place to be competitive is to eliminate the change fees. Once upon a time when we flew with coupons, there were no change fees. Even without coupons before 9-11 there were no change fees in the Hawaii interisland market. At least I never encountered or heard of them until after the year 2001 when people were generally frightened away from flying.

I think the problem right now is, even with the low fares of $19, there's just too much capacity for the size of the market. So it's really a battle of which airline can bleed longer.

As for a few high paying passengers or a plane full of discounted paying passengers, that's gonna be heavily dependent on operating costs. You can breakeven on a half empty flight and you can also fly a full flight at a loss based on whatever your operating costs are.

I think what the incumbents should really focus on is getting their operation costs down and being able to offer a lower profitable price fare over the long term. I'm not talking about $19 but even fares at around $60 is better than before.

As for coupons, I guess, though it feels so bus like haha. "Here's my transfer ticket, haha." I've seen some airlines offer two prices, one for a nonchangeable ticket and one with the option to change schedule if needed. Maybe charge that second ticket option $5 more than the first? Sorta like buying insurance.

[craigwatanabe]

Re: Hawaii's Interisland Air War - Chapter 2

It's kinda sad on one hand that Mesa is using undermining tactics to drive AQ into the ground but on the other hand, I do like the pricing. Kinda like selling your soul to the devil.

I hope the lessons learned will be that for either Hawaiian or Aloha, they cannot keep island travelers at whatever airfare they want. I've been a frequent flyer on both airlines and really didn't like the way either was treating me as a customer, but what can you do? Where else could you go?

I know the price of travel gets higher each year but hey gas prices are dropping! I realize fuel costs aren't the only things driving the cost of inter-island travel up. Things like union wages and benefits affect the price of tickets as well as airport fees and other taxes imposed on the airlines that ultimately affect passengers. Hmmm they should make those fees tax deductable for us travelers.

But this little experiment in fare wars should have opened the eyes of those in charge at either incumbent airlines that the market will determine who will go and who will stay. And when a third party comes in and shakes their corporate stranglehold on the consumer, there will be very little sympathy from us when one or both of them fall the wayside.

We need affordable transportation options put on the table for all of us living on all islands. Whether it be a cruise ship, the Super Ferry, or airlines, we need viable options.

Maybe we do need an air transit bus system like OTS and call it: ThePlane where all counties ante up and subsidize the cost of an inter-island municipal airlines. Now that I would support if the GET were to be raised.

Aloha and Hawaiian...are you listening? If you offered better transportation schedules that don't pack us in like sardines at rediculous prices maybe your service to the transportation public would shine over discounted seats.

We need late night schedules for those of us who have late dinner meetings and are forced to stay over an extra day because the last flight to the Big Island leaves too early in the evening. Flexable schedules, decent pricing, and comfortable seating. Do all of that and we'll be loyal customers that will be willing to pay a bit more for better and more comfortable service.

It seems all of that faded away sometime in the 80's and everything was pack em in and leave the standby flyers out cold when they could have flown on an earlier flight but was bumped because the ticket agent convinced a later flight passenger to fly on an earlier flight. Meanwhile they're luggage arrives later on their original flight and you have to wait in baggage claim where there isn't any decent seating accomodations.

[damontucker]

Re: Hawaii's Interisland Air War - Chapter 2

We need late night schedules for those of us who have late dinner meetings and are forced to stay over an extra day because the last flight to the Big Island leaves too early in the evening. Flexable schedules, decent pricing, and comfortable seating. Do all of that and we'll be loyal customers that will be willing to pay a bit more for better and more comfortable service.

Didn't they stop going to the big island later in the evening, because the lighted runway was messing with the Telescopes on top of Mauna Kea... or something to that affect?

[craigwatanabe]

Re: Hawaii's Interisland Air War - Chapter 2

That makes sense but damn it surely makes for an expensive overnighter when it ain't necessary.

Damned those killer asteroids

[joshuatree]

Re: Hawaii's Interisland Air War - Chapter 2

Didn't they stop going to the big island later in the evening, because the lighted runway was messing with the Telescopes on top of Mauna Kea... or something to that affect?

So do both Hilo and Kona airports turn off their runway lights after a certain time?

[timkona]

Re: Hawaii's Interisland Air War - Chapter 2

especially if it is a new kid in town...

xenophobia anyone?

[joshuatree]

Re: Hawaii's Interisland Air War - Chapter 2

It's kinda sad on one hand that Mesa is using undermining tactics to drive AQ into the ground but on the other hand, I do like the pricing. Kinda like selling your soul to the devil.

In a twisted way, it's actually a blessing that someone shady like Mesa entered into the market because HA and AQ can actually counter Mesa on legal grounds. If it was someone more respectable and strong like Southwest stepping in, I think it would be safe to say one of the incumbents would be forced out.

Aloha and Hawaiian...are you listening? If you offered better transportation schedules that don't pack us in like sardines at rediculous prices maybe your service to the transportation public would shine over discounted seats.

I think both should get rid of their jets and switch to advanced turboprops. Island Air was on the right track with their recent Q400. Too bad the airfare war has made them decide to hold off on their fleet growth. Considering no interisland flight is more than 300nm and with the high cost of fuel, jets really aren't suited for this market. The turboprop has an operating cost advantage on these short hops and with the latest advancements in anti-noise and vibration technology, the ride in a turboprop is comparable to a jet.

[damontucker]

Re: Hawaii's Interisland Air War - Chapter 2

So do both Hilo and Kona airports turn off their runway lights after a certain time?

I believe so... anyone else know? I mean... I'm sure it's after the last flights... not saying it's exactly at the same time in Hilo and Kona.
Since the daylight lasts much longer on the Kona side as the sunsets over there... they may have a few later flights.

[mel]

Re: Hawaii's Interisland Air War - Chapter 2

It's kinda sad on one hand that Mesa is using undermining tactics to drive AQ into the ground but on the other hand, I do like the pricing. Kinda like selling your soul to the devil.

Whereas I would only take one holiday trip back to Hilo this year, I am taking 2 instead. Hooray for $19 or any low fares. You're only selling out to the perceived "devil" if you are flying on Go! and don't feel good about it.

However both HA and AQ are offering low fares to match, so I look on their sites first before I go to Go! I still like Hawaiian because they have the B717 which I like. However schedules are not the best when shopping for low fares, so in my case I had to mix and match, which meant flying Go! on one trip. It's an opportunity to try them out for the first time.

I hope the lessons learned will be that for either Hawaiian or Aloha, they cannot keep island travelers at whatever airfare they want. I've been a frequent flyer on both airlines and really didn't like the way either was treating me as a customer, but what can you do? Where else could you go?

I always think about my favorite cartoon on this issue drawn by John Pritchett a few years ago on comparative air fares for interisland and Hawaii to mainland market a few years ago:

http://pritchettcartoons.com/travel.htm

Today Aloha Airlines has an Oakland to Kona, Oakland to Honolulu fare for $149 each way. It's slightly higher to other West Coast cities they fly to, all of them farther away than it is from Honolulu to Maui, Honolulu to Hilo, Hilo to Lihue or whatever. If Go! was not in the picture we'd be paying $79 to $89 on the low end for a shorter plane ride to a closer city, and in all likelihood much more to those destinations than the promo fares they push on mainland flights. isn't flying interisland using less fuel per trip than long hauling it to the mainland?

Perhaps Aloha and Hawaiian are using fuel inefficient planes... definitely Aloha is as their Boeing 737-200's are at least 20 years old each.... they are thinking of switching to smaller jets. Someone also mentioned prop planes, and yes, they are more fuel efficient, but many people don't like to ride em. I've flown on them several times, I don't have a problem with em unless it gets too turbulent (jets fly higher and away from bumpy air) in bad weather.

But this little experiment in fare wars should have opened the eyes of those in charge at either incumbent airlines that the market will determine who will go and who will stay. And when a third party comes in and shakes their corporate stranglehold on the consumer, there will be very little sympathy from us when one or both of them fall the wayside.

Exactly. Just like looking for the cheapest music CDs or resorting to digital downloads, people will gravitate to the product that delivers the same end result at the lowest possible price. And especially since Hawaiian and Aloha have been gouging us since after 9-11, the travelling public has little sympathy for both as illustrated in the acceptance of Go's presence.

Maybe we do need an air transit bus system like OTS and call it: ThePlane where all counties ante up and subsidize the cost of an inter-island municipal airlines. Now that I would support if the GET were to be raised.

Don't go there. Not with the taxes and a "get government involved" scheme. I rather the private sector just fight this out themselves than resorting to government taking over.

[mel]

Re: Hawaii's Interisland Air War - Chapter 2

On the subject of runway lighting after hours, I think most airports allow pilots of incoming aircraft to turn the runway lights on from their planes on approach. I think this is true at smaller airports such as Waimea-Kohala. I would assume this to be the case if Hilo and Kona had to turn off their lights after a certain time in the night. However I do see that both HA and AQ offer night flights into both locations up to about 9PM. And Aloha does freight runs to and from Hilo in the wee hours, so I think Hilo keeps their lights on.

Hopefully our resident aviator can clarify us on this.