HAPPY NEW YEAR
STAR-BULLETIN FILE PHOTOS
The chief executives of Hawaii's four largest airlines didn't back down in 2006 as they fought it out either in court or at the ticket counter. Clockwise from top, Mark Dunkerley of Hawaiian Airlines, Jonathan Ornstein of go!, David Banmiller of Aloha Airlines and Rob Mauracher of Island Air.
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What to look for in the year ahead
Airline drama to play out with fares and lawyers
Hawaii's airfare war, fueled by new interisland carrier go! in 2006, could explode in 2007 with more battles expected in both the marketing arena and in the courtroom.
Mesa Air Group Inc., parent of go!, shows no sign of stopping its incursion into Hawaii; it plans to bring in larger aircraft before the peak summer season, while keeping its one-way fares at $39 or lower. Hawaiian Airlines and Aloha Airlines, who both have matched the low fares, have separately sued Mesa for using proprietary information from both carriers and are seeking damages in court. Hawaiian's nonjury trial is scheduled for September while Aloha, which partly blamed go! for losing $10 million in the third quarter, doesn't have a date set yet for its case.
And Island Air, which already has been forced to lay off employees, reduce its fleet and cut routes, appears to be struggling financially as it tries to come to grips with the state's new aviation environment.
Real estate boom cools off as median price declines
While none of the experts forecast a plunge for Hawaii real estate, the consensus is that it will be a while before homeowners see a return to virtually automatic short-term profits on their properties.
And buyers and sellers alike must wonder whether Hawaii is simply a few steps behind the mainland, where the November median price was down nearly 11 percent from year-earlier levels.
Hawaii's real estate market got its own winter chill in November, when the Oahu median price came in 4.8 percent below the year before -- the first significant year-on-year drop since the late 1990s.
Bank of Hawaii Economist Paul Brewbaker is adamant that "this ain't no stinkin' bubble."
But he also cautions that any return to the price upswings of recent history may be one to five years off.
Inflation curbs euphoria over tourism, jobs data
Booming tourism numbers and record-low unemployment can distract from an economic disease that quietly hollows out the surface prosperity: inflation.
In August, the U.S. Bureau of Labor Statistics handed Honolulu a dubious honor, a 5.8 percent increase in the consumer price index for the first half of 2006, the worst of any city it surveyed. Projections for 2007 run in the 4 percent range. That's not up there with the double-digit national rates of the "Whip Inflation Now" 1970s, and local economists don't think inflation here is bad enough to choke off growth -- but it is serving as a brake on the island economy.
More ominously, it is enough to outstrip many Hawaii workers' wage increases, and the Hawaii Foodbank sees it as a factor in rising numbers of people coming in to get food.