What Really Killed Aloha?
The long answer may be simple: Us
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Aloha unveils its DC-3 airliner.
Last April, Brenda Cutwright took a Southwest Airlines flight from San Jose, Calif., to Reno, Nev. The 189-mile trip set her back about $200, a sum she gladly paid. However, during the short, 45-minute flight, the former Aloha Airlines executive grew frustrated and a little green with envy as she reflected on the plight of her former company, now bankrupt and idle back home.
“I would have killed to charge half of what I paid for that Reno trip,” says Cutwright, whose 20-year career at Aloha included stints as executive vice president and chief operating officer as well as acting president and CEO. “That flight was comparable to one of our interisland routes, but here in Hawaii anything over $60 is considered too high.”
Cutwright points out that if Hawaii’s airline market was structured like the Mainland, customers would not only be charged more for their airfare, but those flying from Kauai to Honolulu would pay slightly more than those traveling from Maui and slightly less than those flying out of Hilo or Kona. In just about every other market in the country, the further you fly, the more you pay. But not in Hawaii.
Frank Sinatra gets a little Aloha spirit.
However, Cutwright is also quick to point out that Hawaii isn’t like any other place in the country. It’s an isolated island state, so its interisland airlines also double as interstate highway systems, not only dispersing visitors throughout the chain but also transporting daily commuters and cargo.
In addition, until the arrival of the Hawaii Superferry last year, Islanders didn’t have another option for interisland travel. They had to fly and, with that in mind, airline executives on both sides of the terminal had built mechanisms into their business plans to equalize fares for travel within the Islands, so as not to penalize residents who lived on the state’s outer edges. In the days before direct flights to the Neighbor Islands from the continent, when all interisland travel emanated from Honolulu, the lower fares were subsidized by island-hopping Mainland and overseas tourists. Later, trans-Pacific routes helped offset the increasingly costly interisland operations. Moreover, the periodic entrance of a third airline into the market, and the resulting fare wars, temporarily provided Island consumers with extremely low — if unrealistic — fares.
According to Cutwright, the last interisland airfare that truly reflected the cost of doing business was the $99 both Aloha and Hawaiian charged for a one-way trip in the aftermath of 9/11. It’s a fare interisland travelers will inevitably see again soon.
“We’ve always known that despite great frequent-flyer programs and loyalty programs, the traveler, when it comes to discretionary funds, is a fair-weather friend,” says Cutwright. “That is why, when fares go down to $29, way below your cost, you match it, because people will move for as little as a dollar. They always have and always will.”
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