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
“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.