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Hilo flights likely to cost more


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POSTED: Friday, July 10, 2009

Interisland airlines likely will boost fares of outbound Hilo flights by possibly $20 or more in the wake of a 371 percent increase that went into effect on July 1 in what the carriers are charged by the state for using the passenger waiting lounge at Hilo Airport.

Hawaiian Airlines, go! and Mokulele Airlines all said yesterday they can't absorb such an increase without passing on some — if not all — of that amount to their passengers.

The state Department of Transportation, citing airport activity and revenue and expenditure forecasts, increased the holdroom rate at Hilo to $18.43 a passenger from $3.91. It was the second increase in five months after the rate was adjusted to $3.91 from $2.81 on Feb. 1.

“;These charges will significantly impact air travel, result in much higher fares, less service and ultimately could result in the elimination of all service to Hilo,”; said Jonathan Ornstein, chairman and chief executive of Mesa Air Group, the parent of go! “;It's 100 times higher than it is in Kona.”;

Under the new rates, Kona's holdroom rate is 18 cents a passenger, while at the other major airports it is 53 cents on Kauai, 92 cents on Maui and $1.13 on Oahu.

“;In the short term, fares are set by competitive forces, but ultimately, carriers have to cover their costs,”; Hawaiian spokesman Keoni Wagner said.

As of yesterday all three carriers were charging one-way fares from Hilo to Honolulu for as low as $43.

Go! Vice President Paul Skellon called the new holdroom rate “;completely out of line with those imposed at other airports throughout the state.”;

“;They represent about 40 percent of go!'s current one-way fare,”; Skellon said. “;I think the state is effectively singling out travelers and airlines who choose to fly from Hilo, and this will likely result in fewer flights.”;

Skellon said the fee, which makes up part of the base fare, applies only to outbound flights from Hilo because fees are levied from the departure airport.

In addition to the base fare, passengers already are required to pay an additional federal excise tax of $4.50, a federal segment excise tax of $3.60 and a Sept. 11, 2001, security fee of $2.50, according to Skellon.

“;Those add-ons are what the federal government is charging the passenger and requires the airline to collect on its behalf,”; Skellon said.

Among other increases at Hilo Airport, the DOT also increased the terminal rental rate per square foot to $30.10 from $17.60 and raised the baggage-use fee to 78 cents a passenger from 55 cents.

“;I'm very disturbed by it,”; Mokulele Chief Executive Scott Durgin said. “;It's counterproductive, in my opinion, to try to stimulate the economy to some level of well-being.

“;We're going to be competitive, and we're going to keep an eye what the competition is doing, but none of us can endure that type of increase without having to pass some of that along.”;

State DOT spokeswoman Tammy Mori said one of the reasons for the big spike in the holdroom rate to $18.43 a passenger was the result of a drop in passenger traffic due to the shutdowns last March and early April of Aloha and ATA airlines, respectively.