ALOHA AIRLINES ended interisland and transpacific passenger service on March 31, following Aloha's Chapter 11 bankruptcy filing on March 20. The shutdown came about after the carrier was unable to secure financing for its money-losing passenger service due to the tight credit market and rapidly rising fuel costs. Nineteen hundred of the carrier's 3,500 employees are affected by the passenger service shutdown.
THREE DAYS LATER, ATA Airlines discontinued all operations on April 3. Following the loss of a key contract for ATA's military charter business, ATA said it became "impossible" to continue operations. ATA's demise also affected Hawaii, as the airline operated service to the Aloha State from Oakland, Los Angeles, Las Vegas and Phoenix.
FALLOUT from the shutdown of the two airlines is likely to result in the loss of potential visitors, with Aloha having carried 340,000 transpacific passengers annually to Hawaii and ATA having carried almost 770,000, according to state tourism officials. While other carriers likely will add capacity, there will still be a significant shortfall. As a result of the reduction in seats, fares to Hawaii are expected to rise $100 or more.
ALOHA'S EXIT leaves Hawaiian Airlines, Go and Island Air as the three largest interisland airlines. While there were delays in processing stranded Aloha passengers, by Wednesday the backlog had been largely eliminated, with some Aloha customers buying new tickets rather than waiting for free standby seating. All three remaining interisland carriers have announced increases in the number of daily flights. While fares appear to be remaining steady through April 7, many are anticipating one-way fare increases to $75 from the current $49.
THE ILIKAI HOTEL will not undergo the $60 million renovation that had been previously announced. Developer Brian Anderson said that opposition to his plan by a number of independent apartment owners at the Waikiki hotel made it impossible to move forward with improvements to public areas, although he is going forward on upgrades to the 326 units in the main tower that he owns.
Hawaii Editor: Allan Seiden
Phone: (808) 734-4677
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