NEXT time you feel crowded on your flight between Hawaii and the mainland look at your ticket price and feel grateful. If you are an average passenger the airline is barely recovering its costs on what you paid. Hawaii-mainland
flights are a bargainIndustry-wide figures presented to a Hawaii Economic Association last week show airlines harvest only 6.1 cents per passenger mile between Honolulu and Los Angeles and only 6.9 cents to San Francisco. The national average is 12.3 cents. Between New York and Boston it's 61.1 cents.
The near-unbelievable difference raises the question of why airlines serve Hawaii at all. Why is United now celebrating its 50th anniversary of service to Hawaii? Shouldn't it be mourning instead?
One reason the big airlines keep flying here, says Don Fields, international aviation coordinator for the state, is that Hawaii is the No. 1 frequent flier choice for redeeming mileage bonus awards. Earning them creates incentives to fly on the line's higher cost runs.
A second is that we are a high-volume destination. Though top-dollar business travelers are a relatively small part of the mix on any flight to Hawaii, the low-cost visitor volume is high, much of it on package tours.
Fields' data comes from a variety of sources, primarily AVITAS, a Washington, D.C.-based research firm. He worries that the revenue picture causes airlines to resist increasing capacity to Hawaii, something our No. 1 industry badly needs. Instead airlines push more people onto each plane. Eighty-eight percent of seats are filled on West Coast-Hawaii runs versus 72 percent nationally and only 55 percent Hawaii interisland.
It's far more rewarding for airlines to fly in the semi-protected Hawaii-Japan service. Here the average passenger pays 10 to 15 cents per mile and it shows. We now have nonstop service from six Japanese cities -- Sapporo, Sendai, Nagoya, Tokyo, Osaka and Fukuoka. We get 165 flights a week from Japan, more than twice as many as are flown from Japan to Los Angeles, the next closest U.S. city in Japanese preference. The passengers on each flight to Hawaii generate $35 million in direct visitor expenditures.
Fields considers it heretical to argue for higher Hawaii-mainland fares. Competition keeps them from happening anyway. United, the biggest Hawaii-mainland operator, has only 22.6 percent of the traffic. Following behind are American 15.6 percent, Delta 13.8, Hawaiian 13.4 and Northwest 12.7, Continental 6.3 and Canadian 5.6.
If the airlines can't get higher fares, their remedy must lie in lower costs. That's one reason our landing fees are being contested even though they are only about 2 percent of overall costs. The overseas airlines say interisland carriers aren't paying a fair share. It's also why we have drastically cut back on airline-financed capital improvements at our 16 state airports.
ANOTHER cost-cutting opportunity lies in airline code-sharing for coordinated scheduling and pricing. This has received antitrust immunity. It permits United, for example, to book a passenger from Hawaii to Frankfurt using United flight numbers, even though the passenger will change in San Francisco from a United plane to one flown by Lufthansa. By code-sharing with Aloha and Hawaiian to neighbor island destinations United and Northwest can do less flying direct to these airports.
Cost-cutting and/or fare-raising are the two ways airlines have to keep their Hawaii services viable. For the sake of the No. 1 engine of Hawaii's economy, tourism, we have to hope they succeed.