Airfare Wars in Hawaii: Short Term Gains vs. Long Term Implications

Aug 13, 2006 07:16 PM

HONOLULU (KHNL)- A look tonight at the fare wars between Hawaii's interisland carriers. Go! airlines joined a crowd of 3 other interisland carriers when it started up in June. Mesa Air Group's new interisland carrier has been offering one-way tickets as low as $19. The latest offer for $29 tickets was available for 3 days last week. Hawaiian and Aloha matched it.

Maui resident Audra Sellers was at the interisland terminal going from Oahu to Maui when we met her. "I think it's great. Now travelers can afford traveling interisland. We haven't seen those prices for a long, long time. Hopefully I'll be able to travel more to Honolulu. I'd like to go to the Big Island and Maui as well."

Its cheap tickets are great for consumers. But what's it doing for the local airline industry? Travel expert Duke Ah Moo says when one air carrier slashes prices, the others can't ignore it. "They don't want to lose market share. Can they afford it? No. They're probably losing money. But at the same time they're creating demand, and their flight loads are probably fuller than they would be."

Go! admitted it lost money during a March promotion for $39 seats. So why do this? Ah Moo speculates, "They want people to try their product."

Others in the tourism industry benefit. Ah Moo adds, "For anyone involved in the travel industry in Hawaii, whether it's car, hotel, or air, they are seeing increased traffic."

For now, go will likely will spark more interisland travel. But in the long run, some wonder if the new airline will push out others.

Go!'s arrival also has triggered a legal fight with Hawaiian, which has sued Mesa for damages and is seeking a preliminary injunction that would prevent Go! from selling new tickets for a year. The injunction hearing is in mid-September, while a trial on the damages is set for April 2007.