Inouye balks
at airlines request

Hawaii’s senior senator says
Hawaiian and Aloha should not
be granted an extension of their
antitrust exemption

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By Russ Lynch
rlynch@starbulletin.com

The two major interisland airlines should not be granted an extension of an antitrust exemption allowing them to coordinate interisland capacity, Sen. Daniel K. Inouye said yesterday.

"The purpose really was to ensure that our carriers would continue to fly," said Jennifer Sabas, Inouye's chief of staff. It was clearly intended to be finite, through Oct. 10 of this year, and Inouye believes normal market competition should return, Sabas said.

A resolution in the state Senate is aimed at urging the congressional delegation to seek an additional year of exemption from federal anti-monopoly laws. The exemption, which began in December, allows Aloha Airlines and Hawaiian Airlines to calculate what they believe will be the total interisland seat demand for each month and then adjust their individual capacity so they can each handle 50 percent of that total.

The airlines told a state Senate hearing earlier this week that they like the idea of a one-year extension, allowing them to talk only about how much interisland capacity is needed in a given month and then split it 50-50.

Aloha and Hawaiian both said additional language in the resolution calling for the airlines to be able to divide specific interisland routes and schedules between them, is not practical.

Aloha is "very appreciative of what Sen. Inouye and the Hawaii congressional delegation did in securing the waiver," said Stu Glauberman, an Aloha Airlines spokesman. "We believe that it is working and we fully understand that it ends in October."

Keoni Wagner, a spokesman for Hawaiian Airlines, said his company believes the exemption has helped bring stability to the market.

"There is a case to be made for an extension, given the current environment, but of course we will continue to do our best in the circumstances," he said.

The other members of Hawaii's congressional delegation were not available for comment yesterday.