Hawaiian Air plans a suspicious coincidence

The United States is a nation of innovators. We always have been.

In 1978 we took the bold step to move to a free enterprise environment with our air transportation system, deregulating the industry, allowing for open competition. Once deregulated, anybody could start an airline, serve any market and charge whatever they wanted without having to seek government approval from the Civil Aeronautics Board.

Since then, the world has followed our lead and, although some antiquated international rules continue, air travel within the U.S. is open to competition, and has been since 1978.

Here in Hawaii, we’ve seen unbridled competition go terribly wrong with irrational and undisciplined players in the market. Over the past 10 years, the competitive landscape within Hawaii has eroded into a massive portion of market share held by one service provider. This is dangerous. Without competition, travelers are captive to one airline, a monopoly.

This is what President Jimmy Carter and those responsible for the Airline Deregulation Act were trying to prevent. The unforeseen consequence is, once established as market dominant, a legacy carrier can control a market through fare wars. Maintaining low fares in a local market, using cash from other operations long enough to starve local competition, results in the market-dominant position. The traveling public is at the mercy of the monopolistic airline, which is free to raise fares. Higher fares mean fewer people can afford to fly, and, in the end, using our Hawaiian market as an example, the impact is fewer visitors to the outer islands.

Many airlines have tried to penetrate the Hawaiian market. All except Island Air have either gone out of business, restructured, merged or gone into bankruptcy. Mid-Pacific, Discover, Mahalo, Aloha, Hawaiian (twice), go!, to name a few. Our politicians are aware that a balanced approach to the industry is needed; however, no action has been taken.

Undaunted, Island Air has served Hawaii for more than 30 years. In the past year, we started working on a new business model to ensure there is a choice in air travel throughout all of our state. We’ve researched and acquired ATR (turboprop) aircraft because they are best suited for short-haul markets, delivering great passenger comfort at the lowest possible cost.

We’re working on new systems and processes that will be rolled out in the coming months to give Island Air an equal footing with any other market player. We have no interest in becoming the biggest or only carrier in our state. No, we are in the market to provide those who choose to fly with us the best possible experience at the lowest possible price.

We’ve had a good working relationship with Hawaiian Airlines, the market- dominant player. It has sold seats on our aircraft as "Hawaiian Airlines" through a codeshare agreement. Now, it seems Hawaiian wants to take even more of the local market segment, currently 85 percent as reported in the Star-Advertiser. It has announced plans to acquire the same ATR aircraft we’ve researched and will bring on line next month. It has announced plans to fly to the same markets we fly.

It also announced a fare sale that lowers its fares to be in line with our lower fare structure. All during the week we had been planning to initiate our new business model.

Coincidence? I’ll let you decide.

As chairman of Island Air, be assured we will continue with our plan to provide excellence in air transportation at fair prices. Our new image and aircraft will be in the skies over Hawaii in a few short weeks.

And, as always, we will serve our community with the spirit of aloha.