Local Airlines Lobby for Bills to Reclassify Interisland Flights - Hawaii News Now - KGMB and KHNL

Local Airlines Lobby for Bills to Reclassify Interisland Flights

By Paul Drewes

HONOLULU (KHNL) -- Re-classifying interisland flights could save local airlines millions of dollars.

Measures to do that are being heard at Hawaii's State Capitol.

Along with all the planes taking off at Honolulu International Airport, there is also a fight over a fuel tax taking off as well.

"It's a fairness issue," said Stephanie Ackerman with Aloha Airlines.

At issue is the fuel at the airport's foreign trade zone.

Mainland or international carriers coming into the islands are not charged use tax or general excise tax on their fuel. Because the state considers those flights interstate commerce.

But interisland carriers are charged the taxes when they fly between the islands.

According to local airlines, even flights going to the neighbor islands are still involved in interstate commerce and they should still have the same benefits as mainland carriers.

"Because we are governed by the federal government, that defines inter-island flights as interstate commerce we believe they should apply the law consistently to interisland flights," Ackerman said.

In written testimony, the State Department of Taxation hasn't expresses opposition to the reclassification, but did say the change would cost the state over $5 million each year in lost revenue.

But that's money Hawaii's struggling airlines could use to keep them in the air.

"We're doing all that we can do to cut costs where we can because that affects our business and a healthy airlines is good for a state that depends on healthy airlines," said Ackerman.

This is not the first time this issue has been heard at the State Capitol.

Aloha Airlines and other local carriers have lobbied for bills over the past few years to treat all airlines the same.

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