Inter-Island Competition Heats Up for Summer - Hawaii News Now - KGMB and KHNL

Inter-Island Competition Heats Up for Summer

The long line early Friday morning for Aloha Airlines free ticket giveaway. The long line early Friday morning for Aloha Airlines free ticket giveaway.
Some used the time in line to catch a morning nap. Some used the time in line to catch a morning nap.

by Darren Pai 

HONOLULU (KHNL) - A new airline offering cheap fares. Long lines for free tickets. For the airline business, it's just more turbulence.

"All the carriers are trying to push low fare out at the front of this transition to retain customer loyalty, to sort of make it hard for their rivals," said Paul Brewbaker, economist for Bank of Hawaii.

Economists say the fare war should settle down eventually, probably in late summer when families will likely stop travelling because public school students will be returning to class.

"Once things settle down in a couple months I think prices will find a new equilibrium. probably lower than we had last year," Brewbaker said.

It's not clear whether there is enough demand for inter-island travel to support three carriers flying jet aircraft.

"It could be the optimal industry configuration is two," Brewbaker. "It's just not clear that those two would be the companies that have been here."

"It's highly unlikely that the size of this market would support a large number of commercially viable jet aviation carriers," he said.

Competition between three jet-based carriers could actually create more demand for inter-island travel if they keep fares low and make flying more convenient.

"I hope it works out that way. I hope its easier and more affordable to travel inter-island," Brewbaker said. "I think it would be good for the economy."

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