U.S. airline shutdown bad for Hawaii

The tourism and cargo markets would be hit the hardest, report says

The liquidation of multiple airlines could have "severe" implications for Hawaii, according to a national report released yesterday.

The failure of one large airline would disrupt the travel of up to 300,000 passengers a day and thousands of tons of goods, according to the Business Travel Coalition Inc. a Pennsylvania-based travel information research and advocacy group.

Also, between 30,000 and 75,000 people would lose work immediately, with payroll losses of up to $6.7 billion.

"The geographical impact of airline failures would be locally severe," the report states. "United Airlines, for example, has historically provided the majority of 'lift' into Hawaii."

Hawaii is also highlighted in such critical areas as tourism and cargo. The report cited efforts by Love's Bakery to fly bread to outer islands by routing it on flights through the mainland after the brief shutdown of Aloha Airlines' cargo operations in early April. High-value tropical fruit and flower shipments from the state also would be disrupted if passenger aircraft stopped flying.

Tourism in markets such as Hawaii, South Florida and Las Vegas could be "devastated" by the failure of a large national airline, depending on which carrier failed, the report said.

"Airlines are paying about twice as much for fuel as they were just a year ago, and roughly four times as much as in 2000," the report said. "Fuel as a share of total airline operating expense has jumped from about 15 percent in 2000 to more than 40 percent today, and is still climbing."