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Hawaii tourism officials have reason to be concerned: Almost
half the airlift between the islands and the Mainland is provided
by carriers in Chapter 11 bankruptcy.
The prognosis is guarded for United, which provides 28 percent
of the lift. But the other airline, Hawaiian, has emerged from
bankruptcy before -- in 1994 and is expected to recover this time
too. It handles 17 percent of mainland travel.
“They definitely have clearer targets lined up than does
United,” said Brian Streeval, an analyst with the Boyd Group, an
airline consulting firm in Colorado.
He noted that Hawaiian intends to emerge from bankruptcy in the
fall, while United has projected “a much longer window, which makes
me a bit more skeptical.”
Streeval said Hawaiian could mirror US Airways, which appeared
on target to emerge from Chapter 11 at press time. Hawaiian “has
been talking to some of its aircraft lessors. And I think they’ll
continue those negotiations. I think there will be a much better
outcome there than with United,” he added.
The airline still plans to start service from San Diego to Maui
on June 1.
“The United Airlines situation is very serious,” said Les
Enderton, executive director of the Oáhu Visitors Bureau. “United
is extremely important to us.”
And Hawaii is important to UA. Enderton, a former executive with
American Airlines, said mainland-Hawaii routes have been among the
most profitable for United, largely because leisure travel has
become more important as business travel has declined.
Enderton is hopeful United will pull through but Aaron Gellman,
a professor at The Transportation Center at Northwestern University
and at the Kellogg School of Management, is not so sure.
If United goes into Chapter 7, or liquidation, it would “hurt
Hawaii tourism quite, quite seriously,” said Gellman.
Gellman believes Hawaii’s secret weapon is Aloha Airlines: “You
have this tremendous apparent success of Aloha, which is using
737-700s to fly to a number of mainland points nonstop from
Honolulu every single day. That’s additional capacity that just
wasn’t there before.”
Aloha provided 5 percent of the lift last year.
“They may not have huge percentages of absolute share, but these
are significant routes,” said Chris Kam, the HCVB’s director of
“They’re tapping regional markets on the West Coast,” which Kam
noted continues to be Hawaii’s strongest market.