HA, AQ Receive Antitrust Immunity

Hawaiian, Aloha now allowed to get together to make money on interisland flights

The Department of Transportation has approved a one-year antitrust exemption that will allow Aloha and Hawaiian airlines to start coordinating interisland service.

The carriers have been seeking the order for almost a year, saying they have to counter a severe downturn in Japanese passengers and increases in direct service to neighbor islands by mainland carriers (TravelAge West, Sept. 2).

The agreement, which took effect immediately, could lead to fewer flights on both airlines, but the order does not allow them to coordinate specific fares or schedules.

The DOT also is requiring Aloha and Hawaiian to file monthly reports on average fares, passenger loads and yields on affected routes, according to an Associated Press report.

The airlines, which control 90% of the interisland market, said the affected routes may include Honolulu, Kahului, Lihue, Kona and Hilo.

“We find that the agreement’s approval is consistent with the public interest” and “will give the applicants the opportunity to adjust their interisland services in ways that will increase efficiency and reduce costs,” the decision said.

Before the DOT announced its decision, the Department of Justice said it opposed any such exemption because of the effect it could have on fares and schedules (News, Sept. 9).

Both carriers have said that their once highly profitable interisland service has become a money loser, so they began trimming schedules earlier this year. A plan to merge the two carriers collapsed in March.