Interisle fare The company that will dominate Hawaii's interisland flights following the merger of Hawaiian and Aloha airlines said yesterday it will keep kamaaina interisland fares in check for the next five years.
cap planned
The merged airline says it
Proposed fare structure
will keep kamaaina fares
down for the next 5 years
Lingle sees deal going throughBy Lyn Danninger
ldanninger@starbulletin.com
The merged airline guarantees a one-way fare of $55 or less for 10 percent of its interisland seats and a $60 one-way fare for 20 percent of its seats, said TurnWorks Inc., the company overseeing the merger. Annual increases would be tied to the Consumer Price Index and the fares would be guaranteed for five years following the merger.
But the new fares would still be subject to taxes such as the 8 percent federal aviation tax, $1.50 departure tax and any other surcharges that the airline passes on, such as the new federal airport security tax of $2.50 per flight segment that take effect next month.
The company also leaves room to raise fares to compensate for increased taxes and "large increases in uncontrollable costs such as insurance or fuel."
The maximum kamaaina interisland air fare would not exceed $78 for the first two years after the merger with any increases to that fare tied to the index.
The company said it will honor all coupons sold before the merger date and will combine any customer frequent flyer miles earned on both airlines into a single account.
Reaction to the proposal has so far been cautious. There is widespread fear in both the local business and travel agent communities that air fares would rise substantially once a single airline dominates the interisland market.
Currently, interisland airline coupon prices run anywhere from about $59 to $62, including taxes, said Danny Casey, president of The American Society of Travel Agents Hawaii chapter.
Casey said he has plenty of questions about the new fares.
"Will (the cheapest fares) only be good on flights leaving at 5 a.m. or at 8 p.m.?" he said. "There are still a lot of unanswered questions that need to be addressed, such as surcharges, number of flights to different destinations, times of day, how restrictive those fares will be and the relationship the airline will have with the travel agent community."
But Wendy Goodenow, a travel agent and owner of HNL Travel Associates, said while she is worried about the impact on interisland fares and lack of competition, she also has larger concerns regarding the merged entity's dominance of its mainland-West Coast routes.
"The one thing I'm a little nervous about right now is that they will have the market cornered on four West Coast cities as well: San Diego, Orange County, Oakland and Portland," she said. "There's no competition. They will be the only ones who go direct."
A spokeswoman for TurnWorks, Alison Russell, said answers to many of those questions must still be worked out.
"It's very early in the process yet," she said. "A lot more decisions need to be made with the full participation of the state Attorney General's Office."
Russell said the proposed fare structure has already been presented to the Attorney General's Office.
Here is a breakdown of interisland kamaaina airfares promised following the completion of a merger between Aloha and Hawaiian airlines: New interisland fares
>> 10 percent of seats will be available for one-way tickets costing $55 or less.
>> 20 percent of seats will be available for one-way tickets costing $60 or less.
>> The maximum one-way coach fare for kamaaina will be $78 or less for the first two years of the merger.
>> Current kamaaina coupons sell for $59 to $62.
>> All coupons sold before the merger takes effect will be honored.
>> All frequent flyer miles will be honored.
>> All existing air cargo contracts will be honored. Increases will be tied to inflation.Source: Turnworks Inc., Star-Bulletin
KAANAPALI, Maui >> Prospective Republican gubernatorial candidate Linda Lingle said she believes the federal government will approve the merger of two major interisland air carriers because of its support from key political figures and the pilots' union. Lingle predicts
airlines will mergeThe state must ensure the carrier
will keep current fares, she saysBy Gary T. Kubota
gkubota@starbulletin.comBut the former Maui mayor said to gain public support for the merger of Hawaiian and Aloha airlines, the state should make sure the new airlines will maintain prices at today's level for five years.
"I think it's critical," she said.
Lingle made the statements yesterday during a general membership meeting of the Maui Hotel Association and an interview later with the media at the Sheraton Maui Resort.
Lingle said she does not expect federal officials will oppose the merger, in light of backing from the state, Gov. Ben Cayetano, U.S. Sen. Daniel Inouye and the pilots' union.
Lingle said she understands the new airlines will have to cut some flights but thinks the state should make sure the reduction is no more than 15 percent and that service to any of the current destinations is not eliminated.
Lingle said her "gut-level" reaction initially was against the merger because it would result in less competition and higher airfares. But she said if the merger did not occur, one of the two airlines would probably go out of business, leaving only one major interisland airline anyway.
Hotel association executive director Terryl Vencl said she thought Lingle's comments were "right on target." Vencl said the association is worried about the schedule of flights and future prices.
"People are concerned the prices will go up," Vencl said.