Originally Posted by Paul Casey
In past years, Hawaiian and Aloha outlasted Mahalo, Discovery and Mid-Pacific airlines, each of which failed to catch on during times when travel between the islands was relatively robust. It's going to be a tougher fight for survival today because the market has gotten a lot smaller.
Funny, but my memory is that when Mahalo, Discovery and Mid-Pacific airlines tried to compete with you, you cut your prices. Aloha did too. As soon as Mahalo, Discovery and Mid-Pacific quit, the prices went back up again. This technique is called predatory pricing, and was the subject of some of the first anti-trust laws. It is what made Standard Oil, and made the Rockefeller fortune. Hawaiian and Aloha have been well-connected enough politically to avoid prosecution under anti-trust laws, and indeed have been granted exemptions to those laws so that they could openly violate the laws with impunity.
Originally Posted by Paul Casey
Contrary to what some people choose to believe, Hawaiian and Aloha's interisland profit margins are thin. Investments in cost-saving technology and, in Hawaiian's case, new, more efficient aircraft, have not managed to overcome the changing market dynamic, or the rising cost of jet fuel. As always, the two airlines compete fiercely with each other. Nobody is hauling cash to the bank.
While it is true that neither airline has been profitable recently, you have consistently refused to allow outside auditors to apportion your losses to interisland and mainland business sectors. If you have been losing money interisland, as you have consistently claimed, why not allow independent verification of that?
Originally Posted by Paul Casey
Mesa, which is based in Phoenix, is accurately described as a low-cost, discount carrier. It started with a clean sheet of paper and has relatively low overhead, using non-union employees with pay and benefits below most other airlines.
In contrast, Hawaiian and Aloha cope with costlier overheads in part because of higher wage and benefit packages that have been negotiated over the years between labor unions and management. The result has been long careers, a dedicated workforce, and economic stability for thousands of local families.
The recent bankruptcies of these two airlines forced some painful belt-tightening on employee compensation that has brought their costs more in line with today's realities.
"more in line with today's realities." That is the truest statement in this article. Not "into line with today's realities". Just closer. And guess who is paying for those costs that are not in line with today's realities?
Originally Posted by Paul Casey
But it might not be enough. If Mesa's low fares take customers away from Hawaiian and Aloha, or the two local carriers suffer financial losses from having to underprice their services, it's almost certain they will feel pressure to seek additional pay and benefit cuts from employees. No one will enjoy doing this again.
It is true that the employees won't enjoy it. But your customers, who you have been using your monopoly position to gouge, might be OK with the lower prices that result.
Originally Posted by Paul Casey
It's also possible that one of our local carriers could fall casualty to this low-fare game of chicken. If so, we may be worse off as a community. For the gain of a few dollars saved flying interisland we risk the loss of several thousand local jobs and the failure of a carrier headquartered in Hawai'i that also provides vital air service to the Mainland.
This is one of the more disingenuous statements here. First, Mesa will staff its jobs in Hawaii too. Second, despite what is implied here, if Hawaiian or Aloha (or both) fail, the state will not lack for air transport to the mainland.
Originally Posted by Paul Casey
Let's not forget that Hawaiian and Aloha have faithfully served Hawai'i's needs for many decades. These kama'aina companies are upstanding members of our community with a generous history of philanthropy.
Most of that philanthropy was during the days of regulation, when you were able to really stick it to your customers. Instead of forcing philanthropy on your customers (while you take credit for it) wouldn't it be better to allow your customers to make their own philanthropic contributions? Make your philanthropic contributions out of your pocket, please, not mine.
Originally Posted by Paul Casey
In the long run, we will enjoy greater control of our destiny as an island state by supporting Hawaiian and Aloha in their efforts to become stronger and more stable mainstays of our local air transportation system.
Paul Casey
Former president and CEO, Hawaiian Airlines
Well,
you would have greater control of
our destiny if there is reduced competition.
I would not. How about giving
me control over
your destiny instead of insisting I give you control over mine?
Wasn't it P.T. Barnum who said that nobody ever went broke underestimating the provinciallism of Hawaiians? Looks like Mr. Casey agrees.
The islands' primary industry is tourism, and the biggest factor retarding growth of tourism is the high cost of Hawaii as a destination compared to other similar venues. High interisland airfares are certainly a part of that higher cost structure. Competitive, market interisland airfares will promote growth, jobs, and ultimately wages in the state.
As I have said many times before here, I wish Aloha and Hawaiian well. I hope that they make the changes needed to bring their airlines "into line with today's realities." All the way, not just part way. If they do, they will survive and prosper. If they do not, they will surely fail. Thinking like that of Mr. Casey impedes that process and endangers the future of Hawaiian. He is doing no favors to the airline, its employees or stockholders.
Oh, by the way, welcome to Flyertalk, HAL717200. Do you, by any chance, work for HAL?