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Airline competition
a welcome boost
for consumers

THE ISSUE Mesa Air has announced plans to establish an independent airline to fly interisland routes.

MESA Air Group Inc.'s plans to fly Hawaii skies will give consumers another carrier choice, and maybe even lower costs, for interisland travel. The optimistic venture by the Phoenix-based airline raises hopes for competitive fares, especially among Hawaii residents and business people who have cut back on flying between islands, discouraged by prohibitive ticket prices.

Though Mesa's chairman and chief executive Jonathan Ornstein is uncertain his company's entry into the local market will start a fare war, his pledge that "we are not going to be underpriced" will be welcomed by cost-weary consumers.

Mesa Air's entry would boost the number of interisland carriers in the state to more than five at a time when the largest and long-established companies are struggling financially.

It was just in June that Hawaiian Airlines got out of bankruptcy. It appears Hawaiian's main competitor, Aloha Airlines, is poised to follow, announcing it has found investors who will bring in $100 million in cash and financing to cover about $67 million in loans Aloha owes.

In addition to Mesa, another carrier, FlyHawaii, plans to start up service early next year, offering low-fare travel that virtually disappeared when Hawaiian and Aloha revised operations and jettisoned the discount coupons and last-minute reservations both said cut their revenues.

Mesa has a strong record for profitability. The Star-Bulletin's Dave Segal reports the company has made money for 27 of the last 28 quarters and expects profits this year to exceed $100 million, indicating it knows how to control expenses while operating a network of flights to 165 U.S. cities as well as Canada and Mexico.

Still, escalating jet fuel and labor costs have creased airlines' bottom lines. Northwest and Delta earlier this month filed for bankruptcy, placing four of the seven largest U.S. carriers in Chapter 11.

Mesa, which aims to serve Honolulu, Hilo, Kona, Kahului and Lihue, will face a tough task in offering attractive fares while gaining enough returns, particularly with FlyHawaii and Island Air, another discount carrier, on similar flight patterns. But FlyHawaii believes the demand for interisland flights has been held down by pricing and that cheaper tickets will lead to market growth.

In any case, Mesa Air and FlyHawaii will increase the supply side of the equation, which could benefit consumers. Financially healthy airlines, fast becoming a rare breed, also will add stability to the local tourism industry and economy.

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