Bankrupt Aloha cuts pensions, fares


Active member
Aug 16, 2004
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Airfare between islands may fall
[FONT=Trebuchet MS, Verdana][SIZE=-2][FONT=Trebuchet MS, Verdana][SIZE=-2]By Dan Nakaso
Advertiser Staff Writer

[FONT=Times New Roman, Times, serif][SIZE=-1]Air Group, Inc., the Phoenix-based airline planning to begin interisland service early next year, said yesterday it will sell tickets for about half the price Hawaiian and Aloha airlines now charge.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Mesa said it plans round-trip fares ranging from $86 to $171 between Honolulu and Kahului and Honolulu and Lihu'e; and from $93 to $171 between Honolulu and Hilo and Honolulu and Kona.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Aloha and Hawaiian indicated they may be willing to match Mesa's fares.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Jonathan Ornstein, Mesa Air Group's chairman and CEO, said, "We looked at the fare structures and what we wanted to charge and it became clear that it was about half. To make it simple, we made it half across the board."

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Comparing airfares among carriers is difficult because of the restrictions that apply and because airlines usually decline to say how many seats will be sold at any specific price.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Asked if Mesa's lower-priced fares will be available to most passengers, Ornstein said, "We clearly are trying to make a statement to the market that when they call our airline, they're going to get the best price."

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Mesa's fares would require no minimum stay or advance purchase, but the prices announced yesterday do not include security charges, segment fees or passenger facility fees, the company said.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]"We will offer competitive fares," Aloha spokeswoman Stephanie Ackerman said yesterday. "We're watching closely to see exactly when they come. If and when they do — if they even do — we will offer competitive fares."
[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Aloha filed for bankruptcy protection at the end of last year and its representatives were in court yesterday defending a proposal to cease its collective bargaining agreements with union workers and terminate its defined-pension plans for 3,000 employees.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Hawaiian, which exited bankruptcy on June 2, "will do whatever it takes to maintain its leadership in the Hawai'i market, regardless of how many competitors we face," said Hawaiian spokesman Keoni Wagner.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Mesa's Hawai'i subsidiary, which has yet to be named, will target Hawai'i residents who want to fly between islands — rather than tourists — when it begins operations in the first few months of 2006, Ornstein said.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]"Because we don't have any long-haul business to feed our flights, we're going to focus on the local Hawaiian passenger," he said. "We want the local folks."

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Mesa will begin by flying eight 50-seat, Bombardier CRJ200 jet aircraft that are considered to be expensive and inefficient to operate by airline industry standards. But within 18 months, Ornstein hopes to upgrade to 90- or 100-seat Bombardier jets.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Before it can begin interisland operations, Mesa needs to make airport improvements and other upgrades. Eventually, Ornstein expects to have a Hawai'i workforce of about 500 employees.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]"Between spare parts and equipment and people, you're looking at an investment of something north of $15 million — that doesn't include the aircraft," Ornstein said.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Mesa specializes in short-haul, low-cost service. It currently flies 181 aircraft with more than 1,100 departures to more than 170 cities, 44 states, the District of Columbia, Canada and Mexico.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]Mesa operates as America West Express, Delta Connection, US Airways Express and United Express under contractual agreements with America West, Delta Air Lines, US Airways and United Airlines. It also operates independently as Mesa Airlines.

[/SIZE][/FONT][FONT=Times New Roman, Times, serif][SIZE=-1]James Delano, chief executive of the proposed FlyHawaii Airlines turbo-prop, interisland service, said that he had no comment on Mesa's proposed fares.