Friday, October 5, 2001

Remember 9-11-01

Hawaiian gets
$18 million,
wants more

The airline's CEO asks for
an airport fee waiver to help
defray recent financial losses

By Russ Lynch

Hawaiian Airlines has received $18 million in the first phase of the new federal airline bailout plan and expects another $18 million.

But Paul J. Casey, vice chairman and chief executive officer, says the airline needs local help as well. Casey told an informal meeting in the state House of Representatives that a proposed waiver of landing fees at Honolulu Airport is also needed.

"We're not looking for financial assistance forever," Casey told the meeting of the House Transportation Committee, but the outlook for airlines is probably worse than has been portrayed in the media. "Traffic between now and the end of the year will probably be off 30 percent."

For all of 2002, Hawaiian's passenger traffic is likely to be off 15 percent to 20 percent, Casey said. He would not disclose Hawaiian's exact financial position. The airline has said it would cut 430 jobs and reduce its flight schedule by 20 percent.

A spokesman for the airline said yesterday that it had to submit projected losses to the government in order to get federal relief money, and the amount being received is less than the losses Hawaiian projected at the time. Those losses have increased because of the bankruptcy of a cruise ship operator that contracted with Hawaiian to fly travelers from Los Angeles to Tahiti, spokesman Keoni Wagner said.

Hawaiian and competitor Aloha Airlines each pay some $6 million in annual landing fees to the airport. Transportation Director Brian Minaai said the airport system can carry on for a time without the landing fees and with some waiver of the minimum annual guaranteed rent payable by operators of concessions at the airports.

But bonding agencies that authorize millions of dollars in airport loans watch closely, and the finances must be carefully managed, Minaai said.

Aloha Airlines said it has yet to receive any federal money under the Air Transportation Safety and System Stabilization Act, the emergency legislation set up to provide $15 billion in funding to airlines after travel fell off because of the Sept. 11 attacks. However, Aloha expects to get $10 million, spokesman Stu Glauberman said.

Hawaiian's Casey told legislators that reports seeming to show a recovery in travel to Hawaii are not telling the whole story. People who canceled trips in September put their travel back to October, and that accounts for any increase being seen now, but there are very few bookings for later in the year and beyond, Casey said.

"I believe it is a crisis statewide that the state has never seen before," Casey said.

DFS Hawaii, which has to pay the state at least $60 million a year in minimum fees for the rights to sell duty-free goods at the airports, asked the committee to approve a waiver of that minimum guarantee. So did Greeters of Hawaii, which has the floral concession, and Host International, which runs airport restaurants. All said that they are willing to pay a percentage of their sales as rent, but the travel slowdown and the complications of added airport security have cut into their business to the point where their survival may be threatened if they have to pay the minimum guaranteed in contracts written during better times.

In an earlier meeting of the Senate Tourism and Governmental Affairs Committee, a three-man committee appointed by Gov. Ben Cayetano presented details of a planned public relations and advertising campaign to try to get Hawaii tourism back on its feet.

There will be advertising promoting Hawaii as a place of recovery and rejuvenation, said officials of the Hawaii Tourism Authority; its marketing contractor, the Hawaii Visitors and Convention Bureau; and the bureau's advertising agency, Milici Valenti Ng Pak Advertising.

The messages Hawaii wants to send have not been finished, but samples shown to the committee included such phrases as "Come home to the blessings of Aloha," "Welcome home" and "Hawaii, now more than ever."

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