Double Whammy - Hawaii News Now - KGMB and KHNL

April 9, 2008

Double Whammy

Early reports indicate that about 500,000 fewer visitors might come to Hawaii this year due to the sudden loss of Aloha Airlines and ATA Airlines. That is a major problem for a number of reasons. Businesses will suffer, as will the state's tax coffers. And when local businesses are hurt, the ripple effect extends out beyond the obvious hotels and restaurants and tourist attractions. Discretionary spending will dry up as people's jobs are affected.

Unfortunately, airlines still in pay will raise fares as part of the old supply and demand game. And unless someone steps in to fill the gap, this void in airline lift will become the norm, not just a stark and short-term reality check. And there are some who suggest that we are about to see more issues with airlines simply not being able to make it. ATA was Hawaii's 3rd largest carrier behind United and Hawaiian, and its discount rates helped to drive market prices, which often helped consumers. Combined with Aloha, we have just lost about 15% of the visitor airline seats.

Some additional seats have been added, and certainly will remain as new, regular routes, but this loss mandates that politicos and business leaders come together on possible solutions and options. Many of us have pondered  the ramifications of being so heavily dependent on tourism and airplanes. Well, that conceptual discussion has just moved into the realm of stark reality. Think about it...

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