Aloha to drop
coupons, too

A new fare structure also mirrors
Hawaiian in what the carriers
say are cost-saving measures

Local businesses take the loss in stride

By Russ Lynch

Isle travel agents say they were not surprised Aloha Airlines is matching competitor Hawaiian Airlines in eliminating coupons for interisland travel and raising fares for last-minute bookings.

Aloha announced yesterday it will stop selling coupons to the public or for resale through travel agents. All coupons sold through the close of business today will be honored up to their expiration date, the airline said.

Aloha Air Aloha will also match Hawaiian's new interisland fare structure. On both airlines, tickets purchased seven days or more ahead of travel will be $66 one way. Three days in advance, the fare will be $70, and the unrestricted fare for no advance booking will be $75.

Both airlines will charge $25 to any traveler who wants paper tickets and will add a $15 fee for a change in bookings.

Hawaiian announced the same three-tier structure Wednesday.

Some travel agents say the changes will give them an opportunity to sell more services.

"Almost every travel agent can tell you about the customer who walks in and wants to buy two coupons. They really want a hotel and a car, and we can sell them an air-and-car package that will be cheaper," said Danny Casey, special-projects manager of Quality Travel Inc. and president of the American Society of Travel Agents Hawaii chapter.

"There are some agencies out there that primarily roll coupons over," Casey said, buying them at one price and selling them for more to get some profit in an environment in which airlines have cut or eliminated commissions for travel agents.

Agents will lose that source of income but no longer need to have cash tied up in coupon inventory. Paperwork also is reduced, and there is the added convenience of electronic processing, Casey said.

Both airlines said they need to eliminate coupons so they can better manage their business and cut costs in a tight interisland market. The airlines each have lost millions on the interisland market in recent years, and are operating under a federal antitrust exemption allowing them to coordinate interisland capacity.

Aloha spokesman Stu Glauberman said yesterday that "eliminating coupons enables us to better manage our inventory of seats." Like Hawaiian, Aloha said the lowest fare in the new structure is cheaper than coupon fares but must be booked in advance.

In its announcement Wednesday, Hawaiian said getting rid of coupons and introducing a new fare structure are steps needed to save money "in the midst of the worst economic crisis our industry has ever seen."

Sharon Lester, president of International Travel Service, said trends on the mainland have made agencies accustomed to ticketless travel and fees levied on those who insist on paper tickets.

"The one thing that is going to be different is that coupons have been very easy to use," Lester said. "If you had coupons, you could just go jump on a flight."

Those days are ending, along with most last-minute travel as the interisland airlines tighten their capacity. Most affected will be business people who had grown used to the idea that if a meeting on another island went longer than expected, they could just walk into the airport, hand over a coupon and catch a later flight, Lester said.

That flexibility is important when you live in a state in which you cannot drive from city to city, she said.

Pleasant Hawaiian Holidays, a big mainland packager of tours to Hawaii, said it does not issue interisland tickets anyway, since it sells packages and the most paperwork a client would have would be a printed itinerary showing airline, hotel and rental car bookings.

ASTA chief Casey said coupons helped airlines survive tight cash-flow times by generating cash from selling books of coupons that would be good for a fixed price for flights well into the future.

"But many in the industry knew this day was going to come," he said. "Those that made a lot of money selling coupons will be negatively affected."

But for many travel agents, it is an opportunity to sell more services and still save customers money, he said.

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