Changes should help
airlines’ economic stability


Aloha and Hawaiian have eliminated coupons and adopted price increases to survive what they call an economic crisis.

HAWAII'S airlines have responded quickly to Governor Lingle's complaint about booking interisland flights, but not in a way that many will embrace. Higher prices and less convenience are in store for interisland travelers, but that may be necessary to ensure stability for the airlines and more competition at the end of current economic difficulties. The market will determine the strategy's success or failure.

Both Aloha and Hawaiian airlines have decided to stop issuing flight coupons, which have allowed people to board planes without reservations, and charge a $25 fee for paper tickets. People will have to reserve flights in advance or pay more. Electronic ticketing has been the trend for booking nationally, allowing airlines to save processing costs and keep better track of seat availability.

Hawaiian Airlines also raised prices by $17.50 for flights to and from Lanai and Molokai and for other flights requiring connections in Honolulu or Maui. The cheapest one-way rate for an interisland flight under the new price structure is $66 for a ticket bought at least a week in advance, while the steepest -- less than three days in advance for a Hawaiian flight requiring a connection -- is $92.50.

Most affected will be business travelers who lack the flexibility of booking flights in advance. Some small businesses are likely to cut down on the number of trips to neighbor islands, but larger businesses probably will take the changes in stride. "It's just an adjustment," said Steve Tabussi, vice president for marketing at First Insurance Co. of Hawaii.

In recent months, coupons lost some of their allure because planes were booked solid in advance after the government allowed the airlines to consolidate flight schedules. Suddenly, passengers had to make reservations to assure themselves of seats. The only advantage of coupons was their cheaper price and assurance that they would be honored even if prices were to increase.

"Coupons are the legacy of another era in Hawaii, when local carriers used them to build market share and raise cash, but they've outlived their purpose," said John W. Adams, Hawaiian Airlines' chairman and chief executive. Hawaiian said the changes are needed to cut costs "in the midst of the worst economic crisis our industry has ever seen."

After the antitrust exemption is removed, the airlines will be forced to re-examine their practices. That will be yet another era, to which interisland travelers can look forward.


Airport taxi operation
needs thorough review


The awarding of a contract for managing Honolulu Airport's taxi operation has been postponed so the system can be reviewed.

GOVERNOR Lingle has acceded to a state panel's recommendation that she postpone the awarding of a four-year contract for the Honolulu Airport taxi-dispatching service, agreeing to examine a system that has been under attack for many years. The review should result in contract specifications assuring competition among taxi companies by allowing equal access to pick-up areas.

A state judge ruled in 2001 that SIDA of Hawaii Inc., which has the current license, violated the contract by favoring its drivers in various ways, including allowing them to cut in front of other cabs lined up for curbside customers. Independent drivers had sued SIDA, alleging such favoritism.

Star-Bulletin columnist Rob Perez reported last month that several taxi operators also had complained that the process for selecting the contractor, including the brief turn-around time, seemed designed to favor one or two bidders. A major flaw in the current contract bases SIDA's monthly payments to the state upon the number of cab trips to the airport recorded by SIDA, with no method of verifying that count. SIDA still owes the state $670,000 in payments for the existing contract.

In its request that Lingle postpone the close of bidding, which had been scheduled for next Wednesday, the state-appointed Small Business Regulatory Review Board said it was especially concerned about the "honors" system of counting cabs. "It just doesn't make sense the way they're setting it up," board member Sidney Quintal told Perez.

The taxi companies also are concerned that a change in the bidding requirements would allow bus companies to participate. They complain that could make it possible for Roberts Hawaii, the bus company that runs the airport shuttle-bus service to Waikiki, to gain full control of curbside pick-ups at the airport. The governor's review should include a look at the problems that could result from such a large presence by a single company.


Published by Oahu Publications Inc., a subsidiary of Black Press.

Don Kendall, Publisher

Frank Bridgewater, Editor 529-4791;
Michael Rovner, Assistant Editor 529-4768;
Lucy Young-Oda, Assistant Editor 529-4762;

Mary Poole, Editorial Page Editor, 529-4748;
John Flanagan, Contributing Editor 294-3533;

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