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What Really Killed Aloha?

The long answer may be simple: Us

(page 4 of 4)

“There is a lesson here for everyone in Hawaii to learn, and it really goes beyond Aloha, because that is gone,” continues Banmiller. “We just can’t assume that something will always be here, whether it’s an airline or anything else. We live on islands, so it’s a matter of physics, a lack of space. We’ve got to look at the long term, make the hard decisions and then pay the price.”

It’s April 29, the day after Aloha Airlines announced the shutdown of its cargo operations and the state is in turmoil as businesses, large and small, race to find a way to transport their goods throughout the Islands. Colbert Matsumoto is gazing out of his conference room window and he’s upset. Matsumoto, chairman and CEO of Island Insurance, is a member of Aloha Hawaii Investors LLC, a group of local business people who invested $2.2 million in Aloha Airlines as it emerged out of bankruptcy in 2006.

But Matsumoto isn’t angry about the money he has lost. He kissed those dollars goodbye long ago, well aware of the risks of investing in the high-flying airline industry. He explains that his support of Aloha Airlines was more of a social investment than a financial one. The presence of local money helped secure a local voice on the airlines’ new board: Richard Ing, a fellow member of Aloha Hawaii Investors and the son of longtime Aloha Airlines co-owner Sheridan Ing.

What really rankles Matsumoto today is all the hand wringing and finger pointing going on throughout the city and the state. He has saved most of his ire for local government officials, who feign shock and surprise at the closure and the resulting impacts.

“What was frustrating about this whole thing was that there were public officials who lauded the entry of go! even though they had been around when other airlines had tried to enter the market. They knew the pattern,” says Matsumoto. “What was more troubling was that when they started to offer their $19 and $9 fares, nobody seemed to care, as long as the consumers were happy. Of course, they were happy. They were benefiting in the short term, but what was it doing to the community in the long term?”

Matsumoto believes that public officials should have seen the warning signs early on. They didn’t need to look into Aloha’s balance sheets. All they had to do was read one of the advertisements for ridiculously low airfares. Matsumoto points out that government intervention in the local airline market is hardly without precedent. Hawaiian Airlines received a state bailout 20 years ago, and both airlines received special federal dispensations and consideration post 9/11.

“Because of our geographic isolation, we can’t expect that everything we do will be the same as the way economies work and communities interact on the continent,” says Matsumoto. “We have to wake up to that fact and live and do business accordingly, because otherwise we have lost control over our destiny and the forces which control our lives.”

Instead of finger pointing and playing the blame game, Matsumoto believes that the demise of Aloha Airlines should be reframed as a sustainability issue, no different from individual efforts to reuse and recycle household goods or buy more locally grown produce. It’s still about mindfully weighing short-term benefits with long-term impacts. And it doesn’t end at the ticket counter.

“In the business community, should we be doing more to encourage local investment in local companies?” asks Matsumoto. “Should we all be buying Hawaiian Airlines stock right now, so that it will be controlled by the people of Hawaii? Should state pension funds be making more investments in some local companies like Hawaiian Electric and Bank of Hawaii, so we can maintain local management control and oversight? Yes, they might not earn the same return as some high-flying stock on Wall Street, but is that the kind of investment we in the community should be making?”

Brenda Cutwright agrees wholeheartedly with Matsumoto’s reframing of Aloha Airlines’ fall as a sustainability issue. Maybe someday “Remember Aloha!” will be a call to action and not a nostalgic reverie. But after spending a career selling fares to a fickle and cash-strapped public, Cutwright is a little doubtful that her former airlines’ fall will change personal behavior or alter economic policy. “Are you going to come to the aid and save Company XYZ when you have taken a pay cut or your husband has lost his job?” asks Cutwright. “It becomes personal at that point, and it is human nature to not want to pay more when there is a more affordable alternative. However, if everyone thought as a community and not as individuals who believe their actions have no impact, that would be fascinating to see.”   

Disclosure: Hawaii Business’ owner, Duane Kurisu, is also an investor in Aloha Airlines through Aloha Hawaii Investors LLC.

CORRECTION: The original story incorrectly identified Richard Ing as an attorney.

Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

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Jun 3, 2008 04:26 pm
 Posted by  hulalady

A right to the heart article. Now maybe Go should go! I for one would not support them, regardless how low they bring the fares. It is unfortunate there no longer are two regular local airlines. Also, we in Hilo need to fly west before we can fly east to the mainland, using several hundred more miles of fuel consumption. Perhaps rerouting flight schedules might help.

Jun 21, 2008 09:00 pm
 Posted by  keoni48

On a trip to the islands in 1994 I used both Aloha and Hawaiian for my inter-island flights. The cabin crews on both Hawaiian flights exhibited true Aloha Spirit and were friendly and courteous. However the cabin crews on both Aloha flights were basically arrogant and condescending. They acted like they could care less about their passengers. They laughed and joked among themselves during boarding and bassically offered no assistance with seating. In-flight service seemed to be offered simply because it had to be. If this poor service had been on one flight I would have shrugged it off, but it was the same on both flights, which indicated this was company-wide. Since then I have booked all my inter-island flights on Hawaiian and have not been disappointed with the high quality of service both on the ground and in the air.

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