HONOLULU -- The company attempting to merge Hawaiian and Aloha
airlines is promising it will cap interisland fares at $78 each way
for two years, with future increases pegged to the Consumer Price
Index (CPI) for three years.
Turnworks, headed by former Continental Airlines president Greg
Brenneman, revealed the fare cap in a proposal to the state
attorney general's office.
The attorney general and the Department of Justice will look at
the merger plans to see if it creates an illegal monopoly.
Turnworks' proposal also said the new airline would guarantee
Hawaii residents 10% of one-way interisland seats at $55 or less
and 20% of the one-way seats at $60 or less with yearly increases
pegged to the CPI.
However, the proposal carries a loophole -- the carrier could
raise fares due to costs such as insurance, fuel and security.
Brenneman said the new airline likely will use 717 aircraft for
interisland flights and either 767 or 757 aircraft for flights from
the mainland U.S. to Hawaii.
Frequent-flyer accounts would be protected as well as tickets
bought before the merger for travel after the merger.
Hawaii deputy attorney general Michael Meany said although
Turnworks' fare proposal "may be interesting," the attorney
general's office is "no where near being in a position to think
At the time of this report, the office had not received
documentation from Turnworks needed to start an antitrust review,
"[Turnworks] has not sent the actual proposal on how the
companies will join, internal documents, financial records and
things like that," he said.
Meany said some of the issues the attorney general's office will
look at are whether the merger will discourage the entry into the
market of other potential competitors, whether one of the two
airlines would fail without the merger and whether the merged
airline would create or enhance market power.