Isle airfares rise as fuel costs spike

A price of about $49 is what you should expect to pay to fly between islands

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After months of maneuvering, the lowest one-way isle airfares on all three major Hawaii airlines appear to have settled at $49.

Mesa Air Group's go! initiated the increase with a bump in its lowest fares from $39 on its Hilo and Kona routes last Saturday, prompting price matches from rivals Hawaiian and Aloha. Go! triggered a fare war when it entered the Hawaii market in June 2006 and eventually offered prices as low as $1 each way.

Aloha Airlines briefly floated $44 fares in early November, followed a few weeks later by a temporary hike to $49, which it pulled back when Hawaiian Airlines and go! declined to match.

The airlines are battling rising fuel costs as oil prices hover around $100 a barrel.

"We've been absorbing the rising fuel costs for the past year and a half," said Joe Bock, chief marketing officer for Mesa.

Interisland carrier Island Air, which announced price reductions Thursday of as much as 17 percent, said it does not plan to raise one-way fares from its current $47 before taxes and fees.

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Isle airlines seem to have found stability this week after a fare roller coaster that has seen interisland prices dip as low as $1 one way in the past 18 months.

The lowest fares for Hawaii's three major carriers have risen $10, to $49, this week in response to rising fuel prices and to remain competitive with rival carriers.

Mesa Air Group's go! bumped up fares on its longest routes -- Hilo and Kona -- on Saturday after fuel prices topped $100 a barrel, said Joe Bock, chief marketing officer.

"We are constantly examining our lowest fares and how much revenue we are generating," Bock said. "We also conversely have to monitor our cost. We've been absorbing the rising fuel costs for the past year and a half."

Aloha Airlines matched the fare on Saturday afternoon on all routes, spokesman Stu Glauberman said. On Monday, go! responded by raising fares for its Kauai and Maui routes as well. Hawaiian Airlines followed suit on Wednesday to help cover increasing costs, spokesman Keoni Wagner said.

"The price of fuel in the last three to four months has risen more than 50 cents, and every penny increase in the price of fuel amounts to $1.4 million on an annual basis hitting our bottom line," he said.

In early November, Aloha rescinded a brief one-way interisland $5 fare hike after rivals failed to match it. Later that month, it raised prices to $49 briefly before cutting the increase back to $44 in early December.

In an effort to remain competitive with go!, interisland carrier Island Air said Thursday it cut prices on all flights, some by as much as 17 percent, with one-way tickets selling at $47 before fees and taxes. The lower pricing will be offered throughout the year until further notice, spokeswoman BJ Whitman said.

All airlines said they have not seen any declines in booking levels over last year.

Competitive pressures kept any of the carriers from commenting on whether the current prices will stick.

"We are not sure what the market is going to do," go!'s Bock said. "We don't have any plans to raise our fares again."

Aloha's fuel costs for the first six months of the year for systemwide routes rose 3.6 percent to $49.2 million from the year-earlier period, according to the federal Bureau of Transportation Statistics; Hawaiian's fuel costs rose 9.3 percent to $121.5 million; and Mesa, which does not break out separate figures for go!, saw fuel costs decrease 11.9 percent to $171.6 million.