Rising fuel prices bump up airfares
In what may be the first major crack in the 18-month-old airfare war, Aloha Airlines increased one-way interisland fares $10 this week after acknowledging that it no longer could absorb the soaring price of fuel.
But Mesa Air Group's go! and Hawaiian Airlines, playing a game of musical fares, each matched Aloha yesterday at different times of the day and then apparently withdrew the increases after believing the other airline would not match.
Aloha's lowest one-way fare is now $49 while go! and Hawaiian are still at $39.
Thom Nulty, Aloha's senior vice president of marketing and sales, said the increase will stick for the time being.
"We're going to stay with ours for awhile," he said. "There's no doubt the cost of fuel has gone up substantially, and all this is an effort to recapture the additional cost of the gas. I think there was confusion among them about fares. And we can't talk to each other because it's illegal."
Aloha's increase marked the second time in November that the airline attempted to raise interisland fares due to soaring fuel costs. Earlier in the month, Aloha raised its fares $5 only to withdraw it a few days later after Hawaiian and go! failed to match.
Nulty said that in the three years he's been at Aloha the airline never has successfully implemented a price adjustment because of fuel costs.
"This time we felt it was fully justified and fully necessary," he said. "All we're trying to do is offset this added cost that's totally out of our control."
Nulty said when Aloha began the $10 increase on Monday that jet fuel was $2.89 a gallon, meaning that fuel alone was costing Aloha $18.25 per passenger on a flight 70 percent full.
"When I came here about three years ago, fuel was at $1.25," Nulty said. "That would have put the cost of fuel for a passenger on a flight at about $8."
Through the first six months of this year, Aloha's fuel costs for its systemwide routes have risen 3.6 percent to $49.2 million from $47.5 million in the year-earlier period, according to the federal Bureau of Transportation Statistics. In 2006, Aloha spent $100.5 million for fuel, up 7 percent from $93.9 million in 2005.
Hawaiian's six-month cost for fuel systemwide was $121.5 million, up 9.3 percent from $111.1 million a year earlier, according to the BTS. In 2006, Hawaiian's fuel costs were $230.8 million, up 21.2 percent from $190.4 million in 2005.
Mesa, which doesn't break out separate figures for go!, had a six-month cost for systemwide fuel of $171.6 million, down 11.9 percent from $194.8 million a year earlier. In 2006, Mesa spent $394.7 million for fuel, up 21.6 percent from $324.5 million in 2005.