Gov OKs
airline exemption

The request now goes
to the federal level

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By Lyn Danninger
ldanninger@starbulletin.com

Gov. Ben Cayetano said yesterday he will recommend to the U.S. Department of Transportation that Hawaiian and Aloha Airlines be granted a limited antitrust exemption allowing them to coordinate airline capacity within the state.

Normally, antitrust regulations forbid airline carriers from talking to one another about such issues. But after Sept. 11, Congress provided for a limited antitrust exemption for airlines providing air transportation within the boundaries of a state.

To obtain the exemption, the airlines must first get the governor to issue a declaration saying limited cooperation is necessary. The matter then goes to U.S. Secretary of Transportation Norman Mineta for review.

Cayetano said that the proposed agreement would be limited to coordinating airline capacity and would not allow the carriers to coordinate individual route schedules or fares.

Both airlines declined comment about the governor's declaration.

"We are not in the position to discuss the details at this point in time because the DOT has not received it yet," said Hawaiian spokesman Keoni Wagner.

But unless the airlines could talk about schedules and routes where they are running well below full, it wouldn't make any sense to talk only about capacity, industry observers said.

"It's a question of which flights are full and which ones aren't," said Fred Collison, a professor in the University of Hawaii School of Travel Industry Management.

"When you are looking at too much capacity, you are looking at individual routes. It only makes sense from the standpoint of individual routes particularly when they have two planes operating at the same time," Collison said. "Frankly, I'm a little puzzled."

The president of Maui-based commuter airline Pacific Wings agrees.

"It makes no sense to coordinate capacity but not schedules. It wouldn't produce any real beneficial results," said Greg Kahlstorf. "I thought the point was to have some latitude in coordinating scheduling."

Cayetano noted that if after reviewing the airlines' plans he finds that it creates undue restrictions on the availability of flights or it is not in the state's best interest, he would have the right to withdraw the declaration.

Cayetano spokesman Cedric Yamanaka declined further comment on the proposed agreement.