Monday, March 31, 2008

Musings: Aloha, Superferry and Mainland Mentality

The moon wore a halo and was accented by Jupiter when Koko and I set out walking under a sky of quilted pink-gold clouds that hinted at a lovely sunrise to come. We were both jazzed — perhaps because of the gusty wind that set the bamboo clattering and the eucalyptus and ironwood sighing.

Stopped to talk with both farmer Jerry and my neighbor, Andy, and it was interesting to hear the take each of them had on the very big news that Aloha Airlines is shutting down today.

Since this is Kauai, both of their comments touched on the Superferry, with Andy saying that if the state had invested $40 million into Aloha instead of harbor improvements for the ferry, maybe we wouldn’t be stuck with just Hawaiian and go! — which I have dubbed "no go" in reference to its crummy service.

Jerry, on the other hand, said you have to wonder if the powers that be knew that airplanes, which are much less fuel efficient than ships, wouldn’t be able to handle the rising oil costs, and so wanted to be sure the state had another transportation option.

According to the Advertiser report, the troubled airline went looking for state help, but didn’t get it.

[Aloha CEO David ] Banmiller said Aloha has been in close contact with the Lingle administration for weeks seeking "possible political and government support" and that company executives told the administration that they had no substantive offers for Aloha. Over the past year, the company received minimal support from the administration and other other lawmakers, Banmiller said.

Talking to Jerry and Andy got me wondering if Superferry, now out of drydock, will push up its service resumption date to take advantage of the instability in the interisland transport market. Can it? I mean, even though it got all buss up and put back together, it can pass Coast Guard inspection, right?

And what kind of fares will it be able to offer?

Brad Parsons, who has been going over the testimony presented to the Lege when it was considering the infamous Act 2, which gutted a court decision to allow the boat to run without an EIS, touches on that topic in a post on his blog. It includes an excerpt from testimony by Rich Hoeppner, that Brad updated in brackets:

More important than any of the above information, is the integrity and truthfulness of the people involved in the promotion of this project. They still advertise their operation as affordable and convenient, with weekend fares at $52 per person and $65 per car. In very fine print is the mention of a fuel surcharge based on marine diesel oil (MDO) priced at $300 per metric ton, with a 2% rise in fare price for each 10% rise is in MDO. They also know that the present MDO price is $585. It was as high as $790 just a few months ago and is on the rise since the elections. Is this deceptive, or outright dishonesty? [MDO is well over $900 per metric ton right now, 3/29/08, three times the pricing cost that HSF originally calculated, see:]

What I found most intriguing about the newspaper coverage of the shutdown was an Advertiser article with the headline “Post-war Prejudice gave rise to the People’s Airline.” It includes this fascinating bit of history:

When its first flight took off from Honolulu in 1946, the interisland carrier that would become Aloha Airlines was an underdog created by minorities determined to succeed in post-war Hawai'i.

Founded by publisher Ruddy Tongg as Trans-Pacific Airlines, it was the answer to a class struggle.

Tongg and his friends had felt the sting of discrimination. They had been bumped off flights on the only interisland carrier, Hawaiian Airlines, which reportedly excluded Asian pilots, flight attendants and counter help in favor of Caucasians. The solution from Tongg and his business partners was to create their own airline, said aviation historian Peter Forman.

"When Aloha first came in, they were responding to the prejudices of the time," Forman said. "They created an airlines that a person of any ethnicity could fly on and feel equally welcome. There are many old timers who still support Aloha for this reason."

So what does its shut down — caused in good part by a fare war launched by a mainland-based company with questionable business practices and ethics — say about the current social and economic situation here in Hawaii?

It looks an awful lot like we’re witnessing the demise of aloha — in more than a literal sense— and the rise of “mainland mentality.”

A reader offered this comment:

I feel very sad today for the people of Aloha. How do you say Aloha to Aloha?? Fourteen Million or Billion to put planes in the air a minute, to kill people. But we can't save our own Aloha. Thanks Mr. Bush. To bad he will never have to worry about keeping a roof over his famlies head or food in their belly's. I'm so mad what can I do????

And a nurse friend who commutes weekly to Honolulu shared this:

When I called yesterday to try to figure out my relationship with them, I thought the agent was going to cry. So many lives impacted!

Yes, indeed. So many lives impacted.


Andy Parx said...

Aloha sowed the seeds of their destruction when they changed the pricing and reservation system that we had for decades. It used to be that you could buy a coupon for a reasonable price make a reservation and show up for the flight or cancel it. You could decide on Thursday to take a weekend whether in Honolulu or Puna- for one price and not have to buy tickets weeks in advance to get a decent price or pay double to go to Maui or the Big Island.

Then Aloha stopped coupons and, more importantly, made you pick a day and time to fly weeks in advance and the longer you wanted the higher the rice would be.

People would fly all the time but don’t any more because if you decide Thursday to go Lahaina you don’t just pay double the $39 but $120 each way.

The only way to make money is to run fuller planes and get more volume, more passenger per plane. But now people only fly when they have to , not when they want to.

Stupid executives. Stupid decisions. That’s what doomed Aloha, not any predatory pricing by a new airline but their own new predatory pricing and reservation system that they foisted on the flying public.

Anonymous said...

And my thoughts. What forced AQ into their final bankruptcy wasn't competition, it was as Andy said, years of poor decisions. These included failure of the prior owners to modernize its inter-island fleet (which became 3rd world), expand its trans-pacific fleet beyond a handful of 737-700's, and obtain more lucrative mainland and international routes. These choices, which had been ruining their business over a period of years, were only exacerbated by competition and fuel costs. Ron Burkle's $100M infusion unfortunately didn't change the fundamentals, and only prolonged the inevitable. Very sad for all of us.

Larry said...

Hear, hear to the above. And that's also why a state bailout would not work. It would only push the demise date back a bit.

Short of some sort of regulation (which may not be legal if the feds take precedence), if business practices do not change, why will tomorrow be any different than today?

The TSA also shares part of the blame. Making air travel miserable for passengers does not help the airlines.

What to do and who knew what will be sorted out, and perhaps there is an out-of-the-box solution.