Something to think about RE: Mesa
 

Paul Casey, former CEO of Hawaiian Airlines wrote a letter to the editor in today's Honolulu Advertiser. Something to think about...

************************************************** ******

HAWAIIAN, ALOHA AIRLINES DESERVE RESIDENTS' SUPPORT

Both of Hawai'i's interisland jet operators have gone through very difficult times in the past three years. Hawaiian Airlines and Aloha Airlines have recently emerged from bankruptcy with new investors and cleaner balance sheets.

But running an airline remains a perilous business. A perfect example of this is the arrival of Mesa Airlines as a new competitor in Hawai'i's interisland market. This will no doubt ignite a "turf war" with Hawaiian and Aloha that will likely result in lower fares between the islands.

If so, enjoy it while you can, because three jet carriers flying between the islands is a tight squeeze for this market. Almost certainly, over time, we will be back to two. The question is, which two?

You can bet that both local airlines will protect their business with determination. Hawaiian is a public company and, along with Aloha, has new investors who expect a return on their investment.

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.

Interisland air travel, which relies heavily on visitors, has declined sharply in recent years due to the proliferation of direct flights between mainland cities and the neighbor islands. In addition, there's been a slowdown in travel by local residents due to fare increases driven by fuel costs.

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.

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.

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'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.

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.

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

as a hawaiian platinum flyer, for the moment, i'll just say that i'm thrilled to see mesa coming here.

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.

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?

"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?

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.

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.

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.

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. :rolleyes:

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?

Xlnt post. I had the same hunch. There was a pilot at HA who was on Flyertalk, who previously sent me private messages, and who was in touch with their VP of customer relations (as though they had any). I know I should welcome new posters to Flyertalk, but sometimes I too am a little leery. As an aside, I have also come to take posts on tripadviser.com with a grain of salt after determining that there's "funny business" in many of the posts.

I welcome 'em all. :) Some of our most valuable Flyertalkers (MVF?) are supplier employees. If they do post, though, it would be nice if they would say who they are, as it lends a somewhat different perspective to their post. I don't know about 717200, and he or she is certainly entitled to their opinion regardless of who they work for.

No, I don't work for Hawaiian. I am a pilot training to become a professional pilot. I'm a big fan of HAL. I want to fly for them one day. I did a pilot career shadow with HAL when I was in high school (DC-9).

What bothers me the most about this Mesa-Hawaii venture is the impact on jobs. Hawaiian currently has 98 pilots still on furlough - the most junior captain being hired in 1987. Aloha has 30 pilots still on furlough - the most junior captain being hired in 2000. I was hoping that after bankruptcy the airlines would be able to start re-calling their pilots and eventually hire again.

My life long dream was to stay in Hawaii and fly interisland for HAL or AAH. I want to work for a company that has deeply rooted its tradition in Hawaii. These airlines are very special to me.

I don't know a whole lot about Mesa. I've been trying to do some research on the internet about the company's history, lawsuits, working conditions, etc. So far, I am not impressed by Mesa. I'm just hoping for the best for HAL & AAH.

Hi, HAL. We are glad to have you here. Welcome. You are among friends.

The thing that will most directly determine the number of pilots who fly interisland is the demand for interisland flights. Like anything else, the lower the price of those flights, the higher the demand for those flights. In order to satisfy that increased demand, more pilots would be hired (by someone). So you see, I am on your side, and Mr. Casey is not. Mr. Casey and his coveted anti-trust exemption (and the resultant high fares) are why HA and AQ have pilots on furlough. Do you remember when you could pop over to a neighbor isle for $19, have dinner, and come back that same evening for another $19. I do. Now, I don't know anybody who does that. Do you?

What appeals to you about a company that has "deeply rooted its tradition in Hawaii?" How does HA fulfill that appeal for you?

I have a commercial ticket with an instrument license, so I know some of what you are facing.

Hi there! Much like how you're training to become a pilot, I'm in college pursuing Air Transportation. :) Of course I'd also love to work for HA right out of college, but Mesa's entrance is making me a little leery as to whether it is possible. At least I have the option of entering ATC if it doesn't all work out. :D

IIRC, Hawaiian will be recalling some 767 pilots from furlough once the ex-Delta jets come online, but that's not going to be until at least the end of the year.

Both Hawaiian and Aloha have a special place inside of me. Unfortunately, we all know that they will be up against some firece competition in the form of Mesa, who has a ton of financial capital available to remain competitive in the interisland market for some time.

I'm not impressed by Mesa one bit. If the Mesa work ethic finds its way to Hawai'i (and let's hope not), they'll be doomed from the start, IMO. Depending on how the flight schedules work out (especially in HNL), you may end up seeing the same set of ground agents rampside and gateside working 3-4 flights simultaneously. I've seen and heard a lot of how Mesa pilots themselves were loading luggage because the rampers were working on other flights.

Also at one outstation, I saw 2 people do everything, from ticketing to boarding to all the ramp work in trying to pull a 30 minute turn......the flight left late.


Here's to hoping for the best for Hawaiian and Aloha. We'll see if Mesa can sway some local residents to their side in the long run. :)

Thanks for the welcome.

What I like about Hawaiian Airlines is that the history they have in Hawaii. I was born and raised here. Riding on the airplanes of Aloha & Hawaiian interisland as a child greatly fueled my interest for aviation.

I've had absolutely wonderful experiences with Hawaiian Airlines.

When I was in elementary school I was entered in their 65th Anniversery poster contest and placed first place statewide for my grade. I was featured on the cover of Pacific Connections, their in-flight magazine at the time.

Pacific Connections - November 1994
My Poster

In high school a pilot came to my school to do a career presentation. I had a huge interest in DC-9's at the time. I had been designing a DC-9-51 Panel for Microsoft Flight Simulator 98 at the time. The pilot was impressed with my work and set up a cockpit career shadow for me a year before Sept. 11. The pilots I've made friends with at HAL really encouraged me to pursue aviation. Without the motivation, I don't think I would have gotten as far as I have today.

I feel like the company is really like a big family. I still keep in contact with that pilot that helped me with the career shadow. He flies the 717's now and is a great mentor. Last summer we went to go check out N699HA at the Pacific Aerospace Training Center.

Cool,

Are you with the Mesa Pilot Training program?

I got my private with the Civil Air Patrol & Hawaii Flight Academy on the Big Island. After a little over 100 hours I transferred to the Part 141 HCC/UND flight program here on Oahu. I'm a couple hours shy of 200 hours TT working on my instrument & commercial. I'll be transferring to Grand Forks, ND this fall.

While I am not a big fan of Mesa Airlines, I applaud the pilots who help out with luggage WHEN NECESSARY. One time, we were running late in a CRJ-900 and there was a lot of carry on luggage stored underneath. The pilot went out and helped unload the luggage to help ensure a speedy turnaround. I personally thanked him as we de-planed. It was a nice gesture as the ground crew was struggling with two flights at non-adjacent gates and a third plane with a maintenance problem.

I guess I never thought that having employees who would pitch in and do whatever needed to be done, and had a high work ethic, was such a severe disadvantage that it would doom a company "from the start". I thought that having employees who wouldn't do anything because "it's not my job" would be more likely to doom a company.

That was 100% opinion on my part (as my post reflected). Like others, I appreciate pilots and other employees who go beyond their duties to bring the best to the customer. However, I feel that pilots loading luggage shouldn't be a regular thing. Mesa's rampers are understaffed, the main reason why pilots end up loading and unloading luggage to begin with.

Many pilots have an incredibly high work ethic. They keep the planes in the air. IMO, it's the work ethic of the ground staff that will make or break Mesa's operations (*forgot to clarify that in previous post). Unfortunately, many of them see their positions as "just another job".

Temporarily pushing off-topic to answer OP's question:
Hi! Since my focus is management-related, unfortunately I'm not with Mesa Pilot Development. However, my core studies integrates me with people within the flight program, and these soon-to-be-pilots are with Mesa Pilot Development, and most will be flying with Mesa upon graduation. :)
Back on topic:

If Mesa can staff the stations adequately, the factor that will determine it's success is how they're received once they start operations in the second quarter (not too far from now).

Well, it will be pretty hard for Mesa to recruit ground staff with a high work ethic in Hawaii. It will be interesting to see what happens. There is definitely a culture clash possibility there.