Hawaiian disputes
Justice Department
objection to deal

It isn’t about the condition
of the carriers, but the condition
of the market, says airline

---

By Russ Lynch
rlynch@starbulletin.com

Hawaiian Airlines said the U.S. Department of Justice missed the point in its strongly worded objection yesterday to the proposal that Hawaiian and Aloha Airlines should be allowed to talk to each other about reducing excess capacity on the five most highly traveled interisland routes.

The Justice Department said that if the two airlines are allowed to do what they want to do, which is prohibited by federal monopoly laws, the result would be serious harm to consumers through higher fares and lower service.

The department opinion, filed with the U.S. Department of Transportation, said the airlines' financial reports show they are surviving and don't need extra help. They have expanded routes and replaced older aircraft, not signs of near failure, the Justice Department said.

If one of the airlines fails, the result would be an almost total monopoly by the survivor, which could not help making money and the notion that both could fail simultaneously, suggested in the airlines' filings, is "entirely implausible," federal attorneys said.

Hawaiian said the department is misinterpreting the proposed agreement. "It isn't so much about the condition of the carriers as it is about the condition of the interisland market and the future of our transportation system," said Keoni Wagner, a spokesman for the airline.

He said changes must happen if the local airlines cannot resolve their problems and the changes can only be negative for consumers.

Aloha Airlines declined to comment, saying it will respond officially to the Department of Transportation.

The airlines have asked for an antitrust exemption so they can work out a formula to reduce excess capacity, meaning empty seats, on the most popular interisland routes. The Justice Department yesterday asked transportation officials to deny the request because the proposed agreement is "deeply anticompetitive" and can only result in "serious harm to consumers" through higher fares and lower service.

The secretary of transportation has until Oct. 1 to act on the airlines' proposal.