Richard Walker / RWalker@starbulletin.com
Most of the visitors stranded by the shutdown of ATA and Aloha Airlines have finally gotten flights home. People waited in the first class line at Hawaiian Airlines Monday for flights.
Officials fear less airlift, rising airfares
Most ATA and Aloha passengers have left, but the seat shortage worries officials
STORY SUMMARY »
The majority of the thousands of Hawaii visitors who were stranded by the abrupt shutdowns of ATA and Aloha airlines have finally made it home.
Now state tourism officials say the challenge will be getting them -- and the many others on whom Hawaii's economy depends -- to come back.
State tourism officials and industry leaders fear that limited capacity and rising fares in the wake of the airline shutdowns, as well as the poor health of the mainland economy, could flatten demand from visitors.
If more carriers collapse, or simply decide to pull out of the Hawaii market to cut costs, it could wreak havoc on the state's visitor industry.
By May, tourism officials hope to appropriate more emergency funds to influence carriers to add more lift and to build visitor demand for Hawaii.
FULL STORY »
State tourism officials say they have finally gotten most of the visitors stranded by the shutdowns of Aloha Airlines
and ATA Airlines
out of the state.
Now that the immediate crisis is over, state tourism officials have turned to a more enduring problem -- long-term airline capacity.
Rex Johnson, president and chief executive officer of the Hawaii Tourism Authority, said that the last of nine subsidized flights for passengers who were stranded between the Hawaii and the mainland left, half full, on Wednesday afternoon.
"We think that we got most everyone out. Demand has slowed," Johnson told a board meeting of the agency yesterday. "Our last flight left with 105 people and the plane had a capacity of 200."
All told, the state subsidized flights for about 2,211 passengers who were stranded between Hawaii and the mainland, Johnson said. The HTA spent approximately $500,000, or around 10 percent of the $5 million in emergency funds allocated to deal with the shutdowns, he said. Stranded passengers who took the HTA-subsidized flights paid from $200 to $300 per ticket while agency costs ran about $233 per traveler, Johnson said.
Now that the immediate crisis is over, state tourism officials, have turned to the longer term. State tourism officials have said that they'll meet again in late April or early May to make an appropriation designed to influence carriers to add more lift and to build visitor demand for Hawaii.
"We need to act as quickly as possible to maintain the health of the visitor industry," said State Tourism Liaison Marsha Wienert.
State tourism officials and industry leaders fear that limited airseat capacity and rising fares and package prices could flatten demand from visitors. Since Hawaii is almost exclusively a fly-to destination, the state's visitor industry is also worried about the general instability of the aviation industry. If more carriers collapse or decide to pull out of the Hawaii market to cut costs, it could wreak havoc on the state's lead visitor industry.
"It's pretty bleak for the most isolated land mass on earth," Johnson said.
The logistics of getting people to Hawaii will be even more difficult following the loss of nearly 15 percent of the state's airlift, he said. And, even if there are enough seats for travelers to come to Hawaii, there's the issue of how travelers will react to added costs at a time when a poor economy has made consumers increasingly price sensitive, Johnson said.
While state tourism officials thought that other carriers could fill the void left by Aloha, the loss of ATA's seats could cause state visitor counts to fall by more than half a million in the next nine months if no new airlift is added, Wienert said.
While Alaska Airlines and Delta have added seats back into the market, it doesn't make up for the seats that Hawaii lost, she said. Hawaiian Airlines has added more lift to Oakland, but it has cut its services in San Diego, Wienert said.
"I for one don't have a lot of comfort with the lift that we have," said HTA Board Member Kelvin Bloom. "We need to do all that we can to increase demand and demonstrate to the carriers that they should add lift to our state."
In addition, given current aviation industry woes, state officials have said that they are bracing for the potential shutdown of more carriers or deployment of airlift from the Hawaii market to other, more strategic destinations.
"There are going to be more carriers that are going to shut down and some of the Neighbor Island flights may be reclaimed by other markets," said David Uchiyama, HTA marketing director.
Johnson added, "The airlines are going through the toughest period in the industry that I can ever remember. There's no carrier that is making money it's all about getting enough cash to make it through."
In the aftermath of the Aloha and ATA closures, Hawaii's hoteliers say that they are seeing cancellations and a slowdown in future bookings, said Cheryl Williams, a Starwood Hotels & Resorts regional vice president for Hawaii and French Polynesia.
"We didn't have that many ATA customers, so our short-term cancellations weren't as significant as we had actually thought that they would be. However, we have seen a slowdown in the pace of future bookings, and our pick-up bookings for April and May have slowed substantially," Williams said.
ResortQuest Hawaii has also seen cancellations and booking dropoffs, said Kelvin Bloom, president of ResortQuest Hawaii.
Rising airfares and higher package prices are less palatable for mainland customers already struggling with the impacts of a poor economy, said HTA Board Member John Toner.
"This is a very, very serious time," Toner said. "The economy on the mainland is really struggling and in general people are going to rethink these trips."
ATA job impact tallied
ATA's shutdown has compounded the economic woes brought on by Aloha Airlines' decision to stop flying, the state said yesterday.
It is not just the 2,100 Aloha and ATA employees who already have lost their jobs in the shutdown. A total of 3,820 other people who work for companies that did business with Aloha and ATA airlines could lose their jobs, according to the state Department of Business, Economic Development and Tourism.
The agency estimates the job losses will increase statewide unemployment by 0.93 percentage points. That would push Hawaii's jobless rate, not including seasonal adjustments, to 3.93 percent from 3.0 percent in February.
Allison Schaefers, Star-Bulletin