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JDub
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The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 7:43 am

I lived in the 1990's Hawaii when you could buy an interisland coupon (ticket) basically at the grocery store on Hawaiian for $65 and Aloha for $68 each way between islands. You could call and use your coupon for a reservation or just show up. If they had room you got on the flight, and they always had room, you got a seat.

Hawaiian got their first 717's in 2001, replacing their DC-9-50's, right after the fuel crisis after 9/11, Aloha still was flying 737-200's. Hawaiian was now flying the 717-200's, versus Aloha 737-200adv interisland, Aloha stood no chance due to rising fuel cost, even though they had more of the business share. Aloha was flying 737-700's to niche west coast markets. They were making money on west coast flights, but bleeding money interisland vs Hawaiian, flying more frequency at higher cost in the market.

Aloha ended because because they had no new replacement for their 25 year old 737's vs Hawaiian brand new and much more fuel efficient 717's. And they also had higher labor cost.

Then came GO! airlines ( the one where the Mesa Pilots were so tired they both fell asleep and over flew Hilo by 30 minutes or so into the Pacific ocean, before waking up and turning around.). GO! came in with cutthroat prices and Aloha and Hawaiian matched them. GO! was by far a horrible airline witch Hawaii did not want. But When Aloha was faced with higher labor, less efficient airplanes, then foolishly matched GO!'s prices they went bankrupt. GO! followed years later, don't even think they tried.

One of the main reasons Aloha kept the 737-200adv and Hawaiian kept the DC-9-50 was Hawaii was exempt from stage 3 noise compliance, witch means they could both fly planes in Hawaii, that would not be allowed in the U.S. Mainland. Yes I know the DC-9 might have been more in line with noise regs at the time.

The 717 might have been a dud at the time, mostly due to lack of range.But it was great because of engine cooldown/ turn time,the 717 saved Hawaiian and ended Aloha.
 
77H
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 9:27 am

To say that AQ failed because they kept the 732 is a massive over simplification.

You haven’t accounted for the shrinkage of the interisland market due to the increased overseas service into neighbor island airports that helped fill both carrier’s flights. The market was simply not large enough for two full sized carriers. MW survives to this day because it fills a different niche.

It’s also important to understand that go! entering the market had a devastating impact on both carriers as Mesa came in under the guise of buying both carriers in order to get a closer look at each carrier’s business models. Both AQ and HA sued YV as a result. go! tanked fares in a market that was already spiraling downward.

The beginnings of the recession didn’t help matters as the family vacation is one of the first things to go as people tighten their belts.

That said, it’s likely AQ would have survived at least a while longer had they ditched their interisland network and focused on their overseas network which was profitable. This likely would have delayed or even halted AS’ entrance in the HI market which largely mirrored AQ’s network, strong evidence of AQ’s success.

77H
 
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ClassicLover
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 10:19 am

JDub wrote:
One of the main reasons Aloha kept the 737-200adv and Hawaiian kept the DC-9-50 was Hawaii was exempt from stage 3 noise compliance, witch means they could both fly planes in Hawaii, that would not be allowed in the U.S. Mainland. Yes I know the DC-9 might have been more in line with noise regs at the time.


From what I understand, Aloha kept the 737-200s because the newer 737s were not as efficient on the really short inter-island operations. Either too large, too long to turn around, or a combination of both. Someone will have the right answer. It's the first time I've heard of the stage 3 thing.
I do enjoy a spot of flying, especially when it's not in economy!
 
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eta unknown
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 12:12 pm

Newer generation 737's were more fuel efficient than the -200's EXCEPT for short run flights under 30min when the fuel savings didn't kick in. I read somewhere there was another issue with the newer engines being unable to cool down sufficiently between flights which meant longer turn around times than desired. Anyway as correctly pointed out above, the inter-island market changed and something had to give, but saying HA survived because of the 717 wouldn't be accurate.
 
Max Q
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 1:01 pm

Is Aloha cargo still going ?
The best contribution to safety is a competent Pilot.


GGg
 
kengo
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 2:03 pm

Max Q wrote:
Is Aloha cargo still going ?


Last time I was in Hawaii, Aloha cargo was still flying and they still do today but under a different ownership. Not completely sure but I think an investment firm in the west coast owns them.
 
kengo
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 2:13 pm

JDub wrote:
I lived in the 1990's Hawaii when you could buy an interisland coupon (ticket) basically at the grocery store on Hawaiian for $65 and Aloha for $68 each way between islands. You could call and use your coupon for a reservation or just show up. If they had room you got on the flight, and they always had room, you got a seat.

Hawaiian got their first 717's in 2001, replacing their DC-9-50's, right after the fuel crisis after 9/11, Aloha still was flying 737-200's. Hawaiian was now flying the 717-200's, versus Aloha 737-200adv interisland, Aloha stood no chance due to rising fuel cost, even though they had more of the business share. Aloha was flying 737-700's to niche west coast markets. They were making money on west coast flights, but bleeding money interisland vs Hawaiian, flying more frequency at higher cost in the market.

Aloha ended because because they had no new replacement for their 25 year old 737's vs Hawaiian brand new and much more fuel efficient 717's. And they also had higher labor cost.

Then came GO! airlines ( the one where the Mesa Pilots were so tired they both fell asleep and over flew Hilo by 30 minutes or so into the Pacific ocean, before waking up and turning around.). GO! came in with cutthroat prices and Aloha and Hawaiian matched them. GO! was by far a horrible airline witch Hawaii did not want. But When Aloha was faced with higher labor, less efficient airplanes, then foolishly matched GO!'s prices they went bankrupt. GO! followed years later, don't even think they tried.

One of the main reasons Aloha kept the 737-200adv and Hawaiian kept the DC-9-50 was Hawaii was exempt from stage 3 noise compliance, witch means they could both fly planes in Hawaii, that would not be allowed in the U.S. Mainland. Yes I know the DC-9 might have been more in line with noise regs at the time.

The 717 might have been a dud at the time, mostly due to lack of range.But it was great because of engine cooldown/ turn time,the 717 saved Hawaiian and ended Aloha.


I remember when the coupons went for $39 one-way. I used them many times when visiting Hawaii from Japan. I always preferred AQ over HA and majority of the locals felt the same way since AQ had more "ohana" to their service than HA. Sad to see them go....
 
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modernArt
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 2:54 pm

Aloha Airlines was a make-work program. They shut down employing nearly 160 employees for each of their 22 737s.
 
32andBelow
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 3:19 pm

kengo wrote:
Max Q wrote:
Is Aloha cargo still going ?


Last time I was in Hawaii, Aloha cargo was still flying and they still do today but under a different ownership. Not completely sure but I think an investment firm in the west coast owns them.

It’s owned by the same company that owns northern air cargo in Alaska. And the operation is ran somewhat together. I think the aloha flights are dispatched from anchorage.
 
WPvsMW
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 4:32 pm

Here's an appeal to Peter Foreman to write a sequel to Wings of Paradise:
https://www.amazon.com/Wings-Paradise-H ... e+Airlines
 
ExMilitaryEng
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 5:19 pm

Slightly off topic, but was there a raison why either AQ or HA never used TP alonside their 737s or 717s - let's say during off peak hours?

Those 15 - 30 minutes flights seemed ideal for the ATR or the Q400. (Particularly the Q400, with its higher rate of climb)
 
drdisque
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 5:28 pm

The 737-700 flying to the west coast was also VERY fuel-price sensitive. They could only operate economically when fuel was cheap. They had very few seats. If fuel spiked, UA, AA, and HA could tolerate the higher fuel prices better due to their higher seat counts from nearby markets (and extensive feed on the US end). The AQ 73H flying was essentially local-to-local, which requires optimal conditions to be viable when faced with direct or indirect competition.

Another factor was the mainland carrier's codeshare partners. AQ's was UA. UA did the most non-HNL flying from the mainland. As non-HNL flying increased, feed flowing through to AQ Inter-Island decreased. HA had partners in NW and AA which were much more HNL-centric and provided more robust feed to HA.
 
WPvsMW
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 5:31 pm

ExMilitaryEng wrote:
Slightly off topic, but was there a raison why either AQ or HA never used TP alonside their 737s or 717s - let's say during off peak hours?

Those 15 - 30 minutes flights seemed ideal for the ATR or the Q400. (Particularly the Q400, with its higher rate of climb)


AQ surpassed HA market share by being the "all jet airline".
There was no turning back to props for marketing reasons for "mainline" ops. AQ thereafter operated props in a subsidiary (one incarnation of "Island Air") and HA continues to operate props in its "Ohana by Hawaiian Air" subsidiary.

Parked in Elliot Street Holdiings is the AOC for WP... which operated ATRs and Q400s before dissolution.

So... props do work in the Islands... just not for the high volume city pairs.
 
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aloha73g
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 7:19 pm

There's quite a bit more to the story than just 732 vs 717. HA did order the 717s in the late 1990s to replace their DC-9s ... they needed them as the DC9s were horribly unreliable. HAL was known as "Hawaiian Always Late," back then. When I worked at HA in 2006-7 employees told me they were embarrassed to wear their HA uniforms outside of work back in the 1990s.

Shortly after 9/11, both airlines were suffering and they almost merged (2002) ... but the deal fell through and shortly thereafter HA filed for bankruptcy in 2003, partly because of the high acquisition costs of the 717. AQ was able to park cheap 732s and replace older ones very easily with more cheap 732s. As previously noted the fuel savings from newer jets is not realized on short flights.

The market for interisland flights was shrinking around this time since UA in particular started running lots of 757s nonstop from the West Coast to OGG, LIH and KOA. For comparisons sake, in the late 1990s AQ alone had about 30 daily roundtrips from HNL-OGG .... add in 25 more on HA and that is more than double what HA runs today.

What killed AQ, in my opinion was go!. go!'s mission was to kill AQ and they did it. AQ was more vulnerable than HA not because of the 732, but because they were smaller and depended on interisland flights for 50% of their revenue while HA only got about 20% of their revenue interisland, so HA had more profits from West Coast and international flights to weather the fare-war go! initiated.

Just before go! entered the market AQ and HA had settled on $58 one-way fares, which I believe was very reasonable and sustainable at the time. The $9 go! fares only existed to drive AQ out of business. It wasn't the 732. Certainly, the 717 was more fuel efficient, but they were also more expensive to own. The extra fuel used by a AQ's 732 was offset by cheaper cost of ownership.

-Aloha!
Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
 
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compensateme
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 7:52 pm

aloha73g wrote:
There's quite a bit more to the story than just 732 vs 717. HA did order the 717s in the late 1990s to replace their DC-9s ... they needed them as the DC9s were horribly unreliable. HAL was known as "Hawaiian Always Late," back then. When I worked at HA in 2006-7 employees told me they were embarrassed to wear their HA uniforms outside of work back in the 1990s.

Shortly after 9/11, both airlines were suffering and they almost merged (2002) ... but the deal fell through and shortly thereafter HA filed for bankruptcy in 2003, partly because of the high acquisition costs of the 717. AQ was able to park cheap 732s and replace older ones very easily with more cheap 732s. As previously noted the fuel savings from newer jets is not realized on short flights.

The market for interisland flights was shrinking around this time since UA in particular started running lots of 757s nonstop from the West Coast to OGG, LIH and KOA. For comparisons sake, in the late 1990s AQ alone had about 30 daily roundtrips from HNL-OGG .... add in 25 more on HA and that is more than double what HA runs today.

What killed AQ, in my opinion was go!. go!'s mission was to kill AQ and they did it. AQ was more vulnerable than HA not because of the 732, but because they were smaller and depended on interisland flights for 50% of their revenue while HA only got about 20% of their revenue interisland, so HA had more profits from West Coast and international flights to weather the fare-war go! initiated.

Just before go! entered the market AQ and HA had settled on $58 one-way fares, which I believe was very reasonable and sustainable at the time. The $9 go! fares only existed to drive AQ out of business. It wasn't the 732. Certainly, the 717 was more fuel efficient, but they were also more expensive to own. The extra fuel used by a AQ's 732 was offset by cheaper cost of ownership.

-Aloha!


I don’t disagree that Go! Factored heavily into Aloha’s demise, but HA and AQ had clearly priced themselves out of the market. As recently as 2002-2003, you could buy HA interisland flight coupons from Bank of Hawaii ATMs for roughly $100, and these could be used on any flight. Aloha sold similar coupons - sometimes less - through Sears and other outlets. By the mid-2000s, HA and AQ had eliminated these coupons in favor of webfares, which were often $150+ (not the $59 you cited). One of the newspapers ran a story on it, saying it was causing a sharp decline in interisland travel among locals, who favored cheaper trips to Las Vegas.

This essentially created a market for Go, who priced their tickets starting at $39, forcing HA and AQ to match.
We don’t care what your next flight is.
 
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usxguy
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 7:57 pm

aloha73g wrote:

What killed AQ, in my opinion was go!. go!'s mission was to kill AQ and they did it. AQ was more vulnerable than HA not because of the 732, but because they were smaller and depended on interisland flights for 50% of their revenue while HA only got about 20% of their revenue interisland, so HA had more profits from West Coast and international flights to weather the fare-war go! initiated.

Just before go! entered the market AQ and HA had settled on $58 one-way fares, which I believe was very reasonable and sustainable at the time. The $9 go! fares only existed to drive AQ out of business. It wasn't the 732. Certainly, the 717 was more fuel efficient, but they were also more expensive to own. The extra fuel used by a AQ's 732 was offset by cheaper cost of ownership.

-Aloha!


Well, we have different opinions, but I'll base mine on facts from the YV side. Since I was employed by Mesa at the time and very much tied to go! I also met many people who worked at Aloha (who would later become coworkers at Mokulele), and even dated someone at Aloha when I worked for YV.

AQ didn't know how to compete. Their systems were antiquated, staff were stuck on "this is how we did in 1970, and we're going to keep doing it that way". Yucaipa was putting NO money into the airline. Payroll was already bloated because of seasonal and normal layoffs, most of the staff had 25+ years seniority. Departments at Mesa/Hawaiian that maybe had 2 or 3 people in them, Aloha had 8 to 10. I'd be curious to see how much office space AQ had over on South street...

AQ was selling their last seats at $39, when go! and HA were pricing $89 ish. AQ wasn't automated nor paying attention, because they never had to interisland. I'll attest, as my boss even had to put in his disposition, that we never had more than 5 or 6 seats at $39 on *any* flight. Some flights we had 0. Yet, AQ had tons.

The 737-200 was a big part of why Aloha failed, but mostly because of Yucaipa's inability to make Aloha adjust business practices

YV was certainly an antagonist at Aloha. But I assure you, we NEVER were told how to do our jobs by JO/Lotz/Murnane. They'd ask questions, want to see booking curves, trends, etc. But they weren't looking over our shoulders. Heck, I don't think JO even looked at a proof of our inflight magazine that we put out. My boss gave me carte blanche in working with tour operators, travel agents, distribution, group rates, frequent flyer program, etc. As far as I know, JO wasn't the puppet master everyone makes him out to be.

ps- did you know the idea for go! started during USAirways' bankruptcy? Mesa was among the most exposed capacity purchase carriers, and by setting up YV (the systems of ZV/Air Midwest weren't jet-ready), it would give Mesa a leg up over SkyWest, Republic, ExpressJet, etc -- because Mesa would then have its own 2 letter code, Sabre, a reservations office, e-ticket capabilities, interline eticketing, and of course distribution to channels like Kayak, Expedia, etc. So if US tanked, YV could simply start up go! in PIT, for example, using its CRJ 200/700s and EMB 145s under its own branding within 2 weeks.
xx
 
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aloha73g
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 8:27 pm

compensateme wrote:

I don’t disagree that Go! Factored heavily into Aloha’s demise, but HA and AQ had clearly priced themselves out of the market. As recently as 2002-2003, you could buy HA interisland flight coupons from Bank of Hawaii ATMs for roughly $100, and these could be used on any flight. Aloha sold similar coupons - sometimes less - through Sears and other outlets. By the mid-2000s, HA and AQ had eliminated these coupons in favor of webfares, which were often $150+ (not the $59 you cited). One of the newspapers ran a story on it, saying it was causing a sharp decline in interisland travel among locals, who favored cheaper trips to Las Vegas.

This essentially created a market for Go, who priced their tickets starting at $39, forcing HA and AQ to match.


The $59 base fares were when HA and AQ both exited bankruptcy in 2005 and 2006 respectively, before go! showed up. The fares you cite from 2002-3 and the mid-2000s are not what I was referring to. Just like today, not all seats were sold at $59 ... last minute tickets, and those on full flights could well have been $150 or even $200 one-way (they still are today), and I don't see a problem with that. The average one-way fare was much closer to $59 than $150.

The interisland market did not adopt the revenue management model of the rest of the industry until the mid-2000s and it took locals a few years to get over the nostalgia of the "coupon" model. I miss those days immensely. I used to collect soon to expire coupons from people and spend a day flying four, six or eight legs on the same 732.

-Aloha!

P.S. Package flights to Vegas are cheap because they are subsidized by gambling revenue at Casinos.
Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
 
Northwest1988
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 8:53 pm

Did Aloha fly the 737-200 up until their time of shutdown?
 
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NWAROOSTER
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 9:22 pm

Northwest1988 wrote:
Did Aloha fly the 737-200 up until their time of shutdown?

Aloha flew the 737-200s until their shutdown. Hawaiian started acquiring the 717s as they need a replacement for their DC-9 51s which were getting long in the tooth. Hawaiian bought the 717 as they little choice if they wanted to operate jets. The 717 offered a long term term solution and had a bigger passenger capacity than what else was available long term for their short stage lengths they operated. The DC-9 had a cycle limit of 100,000 cycles and I wonder if the 717 may have the same limit. Hawaiian maybe should have bought a few extra spares so they could of spread out the cycles more between more aircraft. They are now going to need to start thinking about a replacement within the next five years or so. :old:
Procrastination Is The Theft Of Time.......
 
ha763
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 9:24 pm

modernArt wrote:
Aloha Airlines was a make-work program. They shut down employing nearly 160 employees for each of their 22 737s.


It was not a make-work program. Aloha Airlines' employee count included the cargo and contract service workers. Aloha was the largest contract service provider in Hawaii, handling above and below wing duties for many airlines at all the major airports in Hawaii. Those employees got their paychecks and benefits, including flight benefits, directly from Aloha Airlines.
 
phllax
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 9:48 pm

eta unknown wrote:
Newer generation 737's were more fuel efficient than the -200's EXCEPT for short run flights under 30min when the fuel savings didn't kick in. I read somewhere there was another issue with the newer engines being unable to cool down sufficiently between flights which meant longer turn around times than desired.


Even the engines on the 300 and 400 couldn't handle the quick turns and would cook, which is why they dropped them and went back to all 200's until the 700's arrived.
 
 
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seabosdca
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Re: The 717 Saved Hawaiian and ended Aloha

Mon Feb 04, 2019 10:47 pm

NWAROOSTER wrote:
Hawaiian maybe should have bought a few extra spares so they could of spread out the cycles more between more aircraft. They are now going to need to start thinking about a replacement within the next five years or so. :old:


I'd bet the replacement for Hawaiian's 717s will be some of Delta's 717s (replaced at Delta by A220s). Economics will compel it; the 717's advantages are worth far more to Hawaiian than Delta.
 
nz2
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Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 12:12 am

I remember booking our HNL/KOA flight for the Ironman (after travelling from NZL) about June for October flight. The very next day Aloha went bust! My credit card company did refund us which was appreciated, since then it has been Hawaiian as we go to KOA most years. Lately HA have been quite expensive as Ironman is one of the biggest events there, we did Island Air 18 months back which was excellent then they went under, and last October went HA over and Mokelele back which was a great adventure via Maui, but the price was $80 to HA $200 plus....

I hope we dont jinx Mokelele!!!
 
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EA CO AS
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Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 3:51 am

Jonathan Orenstein; he's your AQ murderer. Looking at someone's books in a good-faith investment/buyout gesture only to use that insider information to undermine them was just the lowest anyone has ever sunk in this industry, save for Frank Lorenzo and Carl Icahn.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
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aemoreira1981
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Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 5:37 am

aloha73g wrote:
There's quite a bit more to the story than just 732 vs 717. HA did order the 717s in the late 1990s to replace their DC-9s ... they needed them as the DC9s were horribly unreliable. HAL was known as "Hawaiian Always Late," back then. When I worked at HA in 2006-7 employees told me they were embarrassed to wear their HA uniforms outside of work back in the 1990s.

Shortly after 9/11, both airlines were suffering and they almost merged (2002) ... but the deal fell through and shortly thereafter HA filed for bankruptcy in 2003, partly because of the high acquisition costs of the 717. AQ was able to park cheap 732s and replace older ones very easily with more cheap 732s. As previously noted the fuel savings from newer jets is not realized on short flights.

The market for interisland flights was shrinking around this time since UA in particular started running lots of 757s nonstop from the West Coast to OGG, LIH and KOA. For comparisons sake, in the late 1990s AQ alone had about 30 daily roundtrips from HNL-OGG .... add in 25 more on HA and that is more than double what HA runs today.

What killed AQ, in my opinion was go!. go!'s mission was to kill AQ and they did it. AQ was more vulnerable than HA not because of the 732, but because they were smaller and depended on interisland flights for 50% of their revenue while HA only got about 20% of their revenue interisland, so HA had more profits from West Coast and international flights to weather the fare-war go! initiated.

Just before go! entered the market AQ and HA had settled on $58 one-way fares, which I believe was very reasonable and sustainable at the time. The $9 go! fares only existed to drive AQ out of business. It wasn't the 732. Certainly, the 717 was more fuel efficient, but they were also more expensive to own. The extra fuel used by a AQ's 732 was offset by cheaper cost of ownership.

-Aloha!

HA had also sued Mesa Airlines on similar grounds (access to internal documents on the inter-island network). Had AQ survived long enough to see the case to trial, it likely would have won (HA won its lawsuit against Mesa). AQ's Pacific network was really damaged by the SARS outbreak though and go! was the last straw. When the Aloha name was auctioned off, a stipulation was that Mesa could not acquire it.
 
FlyHappy
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Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 5:57 am

and I preferred my inter-island flying on Mahalo Air's ATR's for $26, as I recall.... not that those fares were sustainable. Still, for the life of me, I do not understand why this kind of flying isn't dominated by turboprops....
 
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RWA380
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Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 6:40 am

FlyHappy wrote:
and I preferred my inter-island flying on Mahalo Air's ATR's for $26, as I recall.... not that those fares were sustainable. Still, for the life of me, I do not understand why this kind of flying isn't dominated by turboprops....


The day Mahalo started selling tickets we were lined up at their Honolulu airport counter to buy their coupon book of ten, for $100.00 each. We bought four of them & with guests that came to visit us & all the outer island travel we did, we ran out of them before they went BK. I loved their original F-27’s for the inter island flying experience with those big & low windows.
707 717 720 727-1/2 737-1/2/3/4/5/6/7/8/9 747-1/2/3/4 757-2/3 767-2/3/4 777-2/3 DC8 DC9 MD80/2/7/8 D10-1/3/4 M11 L10-1/2/5 A300/310/320
AA AC AQ AS BA BD BN CO CS DL EA EZ HA HG HP KL KN MP MW NK NW OZ PA PS QX RC RH RW SA TG TW UA US VS WA WC WN WP YS 8M
 
FlyHappy
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Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 6:51 am

RWA380 wrote:
FlyHappy wrote:
and I preferred my inter-island flying on Mahalo Air's ATR's for $26, as I recall.... not that those fares were sustainable. Still, for the life of me, I do not understand why this kind of flying isn't dominated by turboprops....


The day Mahalo started selling tickets we were lined up at their Honolulu airport counter to buy their coupon book of ten, for $100.00 each. We bought four of them & with guests that came to visit us & all the outer island travel we did, we ran out of them before they went BK. I loved their original F-27’s for the inter island flying experience with those big & low windows.


IKR?
Actually, I probably did fly the Fokker's, too, and not the later ATR's. At that time, I wouldn't have known the difference - all I know is that I loved the low and slow flying over and between the islands - such great visuals. So much more intimate than what any jet provides. And that great announcement at landing: "Mahalo, for flying Mahalo!" .

good times.
 
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KanaHawaii
Posts: 187
Joined: Thu Apr 07, 2016 9:43 pm

Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 7:02 am

So far no one has really spoken about the way Aloha was run, especially after 1986. That was the year the airline's owners - the Ching and Ing families - bought all the remaining shares in order to keep the airline out from being sold. It was one of the last big moves that Hung Wo Ching (the master owner) would do with the airline before he passed away in the mid 1990's. Their progeny - Sonny Ching and those from the Ing family, was really not into the airline as their fathers were. With that a slow disintegration of the airline started to occur. Their cost-saving measures didn't look well when, in 1996, the Ching/Ing families walked Aloha around for potential public listing and new investors. My understanding is that investors took one sniff and realized that, even then, the airline needed millions of dollars of investment just to bring it in line with what was standard at the time.

Then things got better, but got worse at the same time. With Aloha getting into the transpac market in 2000, the airline finally was able to earn money on new routes rather than try to milk the interisland system for all it was worth. However, the income of the transpac, cargo and ground ops (which by the way, individually at the end of Aloha's life in 2008, were all actual money makers) could not overcome the overall expenses that the airline continued to incur. In fact, when the DOT reports on revenue came out (because Aloha was still private, so they didn't have to publicly report) the numbers reported by the local press showed an airline that was bleeding red every quarter. It probably didn't help that when investors saw the numbers too, they stayed away and noted that Hawaiian was still looking pretty nimble - thus the ability of Hawaiian to arrange financing and buy not only 717's but 767s at about the same time.

By the time 9/11 happened, the airline was in trouble, They got 2 bailouts - one a anti-trust immunity clause so that they could coordinate with Hawaiian Airlines for 2 years (thanks to Sen. Dan Inouye) and of course the bailout given to all airlines by the Federal government. Even when the airline was going around again to find a buyer, the only one to come along was TurnWorks, which saw that the only way to make a interisland airline work was to merge Hawaiian and Aloha. Hawaiian, having none of that, killed that deal and left Aloha to slowly fade through bankruptcy (which by the way the terms of the continued funding for the airline was a loan with truly outrageous interest terms) and then when Yucaipa took it over. Again, whatever the airline needed as real investment was now millions of dollars more by the time Yucaipa took over. By 2008, with the economy tanking, GMAC - the main lender of money to Aloha decided to pull the plug and that was that.

The point is, you can blame go! all you want, but at the end of the day all they did was exacerbate the end, which by the way was the same fear the airline had back in 1981 when MidPac came in and undercut both Aloha and Hawaiian. At the time, Aloha was also seen as vunerable because of the simple fact that the owners kept the books close to the chest and would not even think of selling the airline....although it has been said that Hung Wo would say to a propsepctive buyer "Airline is not for sale...but how much?"
 
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Pudelhund
Posts: 261
Joined: Tue Jan 15, 2019 11:06 pm

Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 7:08 am

seabosdca wrote:
NWAROOSTER wrote:
Hawaiian maybe should have bought a few extra spares so they could of spread out the cycles more between more aircraft. They are now going to need to start thinking about a replacement within the next five years or so. :old:


I'd bet the replacement for Hawaiian's 717s will be some of Delta's 717s (replaced at Delta by A220s). Economics will compel it; the 717's advantages are worth far more to Hawaiian than Delta.


Will Hawaiian always use cheap second hand planes from now on for inter island stuff since they run up the cycles so quickly and efficiency isn’t a big deal? Like absent the 717 option from Delta, or at the end of the 717 service life, do they get used E195 or something or new/slightly used E2/A220?
 
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compensateme
Posts: 3279
Joined: Wed Jan 28, 2009 4:17 am

Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 7:35 am

aloha73g wrote:
compensateme wrote:

I don’t disagree that Go! Factored heavily into Aloha’s demise, but HA and AQ had clearly priced themselves out of the market. As recently as 2002-2003, you could buy HA interisland flight coupons from Bank of Hawaii ATMs for roughly $100, and these could be used on any flight. Aloha sold similar coupons - sometimes less - through Sears and other outlets. By the mid-2000s, HA and AQ had eliminated these coupons in favor of webfares, which were often $150+ (not the $59 you cited). One of the newspapers ran a story on it, saying it was causing a sharp decline in interisland travel among locals, who favored cheaper trips to Las Vegas.

This essentially created a market for Go, who priced their tickets starting at $39, forcing HA and AQ to match.


The $59 base fares were when HA and AQ both exited bankruptcy in 2005 and 2006 respectively, before go! showed up. The fares you cite from 2002-3 and the mid-2000s are not what I was referring to. Just like today, not all seats were sold at $59 ... last minute tickets, and those on full flights could well have been $150 or even $200 one-way (they still are today), and I don't see a problem with that. The average one-way fare was much closer to $59 than $150.

The interisland market did not adopt the revenue management model of the rest of the industry until the mid-2000s and it took locals a few years to get over the nostalgia of the "coupon" model. I miss those days immensely. I used to collect soon to expire coupons from people and spend a day flying four, six or eight legs on the same 732.

-Aloha!

P.S. Package flights to Vegas are cheap because they are subsidized by gambling revenue at Casinos.


Here’s a blog from the author of Wings of Paradose, which chronicled - in real time - the bankruptcies of HA and AQ, and the rise of Go. He includes his commentary of the situations, as well as links to a ton of media reports.

The media reports are clear: AQ and HA had ditched tons of capacity, the coupon system and preferred travel agent programs (e.g. Sears selling AQ tickets for cheap) in favor of a yield management system that saw a handful of cheap seats on offpeak (re: undesirable l) flights for around $100, with most flights selling for $125-150, and last minute tickets going even higher. I think your memory is off here, because the real time news reports support what I recall.

Meanwhile, go entered the market, with a fare structure of $45-$100 (including taxes and fees), and frequent sale fares of generally $10 off.

Media reports are quite clear: locals were loyal to HA and AQ, but would book Go if they didn’t match prices. The end result was AQ, already a fragile carrier, losing roughly $6M a month on interisland travel.
We don’t care what your next flight is.
 
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RWA380
Posts: 5765
Joined: Fri Feb 18, 2005 10:51 am

Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 12:22 pm

I feel like I can drop my two cents in here, it was July 1993 when I moved to Honolulu, we both took a mo th off, to find a place to live, get moved in, unload all of our stuff of the boat & LD3 container we rented on NW.

I started with Regal travel (at that time THE largest travel company based in Hawaii, we has TransHawaiian busses (white with blue stripes) that we did airport shuttles to Japanese groups, charters for sports teams & more political stuff.

Just after I was hired they put me in their Kahala Mall location, selling inter-island packages & tons of Las Vegas, so much Vegas. Since we were in a rooftop office in the parking structure, we didn’t get general mall traffic, but lots of lookers. Main questions, “what is your cheapest Vegas package & what’s fly/drive rates?

I will not to pretend to understand the level of corruption in business in Hawaii, but I feel in many ways those with the gold & power make all the decisions. Our bus company TransHawaiian needed a lot near the airport to get the busses closest to where they are needed. Our company sends in requests to change the land use on a piece of property in the area & a donation later, we got our lot.

I also was selling thousands of Aloha Airlines coupons monthly through our one office, at our largest we had a dozen offices on 4 islands. We sold more coupons on Aloha, than Aloha was selling. But many may not know this, coupons came with different restrictions. The gray coupons were only sold as a round trip only & then it came with one day of an economy dollar rent a car. It was $198.00 r/t for two people.

Then there were yellow, green & brown. The yellows were the most expensive, but were available by booking Y class, the others required other fate inventories, V IIRC. We bought thousands of those coupon books, the reps would come in our main Iwelei office & bring the boxes in by hand truck.

We sold the vast majority of AQ books, lots more than we ever did with HA. First HA charged more for their fly drive, it was $129.00 p.p. & the coupons that were unrestricted were were like $65 a piece.

Our AQ rep was by far more determined to keep our company selling a high volume & all of us had all the I tear Island flights, any of us could need. I was moved shortly after to the downtown Honolulu office on Ft Street Mall, that was our only corporate only office & I gained an extensive clientele, one being Bank of Hawaii & their board likes Hawaiian & I never sold another AQ flight again, butI did sell those Hawaiian books to Bof H, they got the big 1k coupon books.

There was a huge & larger local loyalty to Aloha & it was not u common for me to get sent to another office to work part of a day, or a whole day. For months I shuttled back & forth to Maui, leave & drive to the airport, hop a 73S to OGG, get my dollar car & work all day, then get back in my rental, go to a beach nearby & then drop my rental & hop the next 73S to HNL. I loved that commute, door to door was 2 hours.
707 717 720 727-1/2 737-1/2/3/4/5/6/7/8/9 747-1/2/3/4 757-2/3 767-2/3/4 777-2/3 DC8 DC9 MD80/2/7/8 D10-1/3/4 M11 L10-1/2/5 A300/310/320
AA AC AQ AS BA BD BN CO CS DL EA EZ HA HG HP KL KN MP MW NK NW OZ PA PS QX RC RH RW SA TG TW UA US VS WA WC WN WP YS 8M
 
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KanaHawaii
Posts: 187
Joined: Thu Apr 07, 2016 9:43 pm

Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 6:21 pm

Pudelhund wrote:
seabosdca wrote:
NWAROOSTER wrote:
Hawaiian maybe should have bought a few extra spares so they could of spread out the cycles more between more aircraft. They are now going to need to start thinking about a replacement within the next five years or so. :old:


I'd bet the replacement for Hawaiian's 717s will be some of Delta's 717s (replaced at Delta by A220s). Economics will compel it; the 717's advantages are worth far more to Hawaiian than Delta.


Will Hawaiian always use cheap second hand planes from now on for inter island stuff since they run up the cycles so quickly and efficiency isn’t a big deal? Like absent the 717 option from Delta, or at the end of the 717 service life, do they get used E195 or something or new/slightly used E2/A220?


It wouldn't be the first time Hawaiian would do that, They extended the time they had DC-9s by years by swapping out and buying low-cycle frames when they could.
 
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usxguy
Posts: 1910
Joined: Wed Jan 25, 2006 1:28 pm

Re: The 717 Saved Hawaiian and ended Aloha

Tue Feb 05, 2019 8:16 pm

RWA380 - that's one thing that both Regal, Panda & Rendezvous kept pressuring us to do @ go! were coupon books; then of course it carried over to Mokulele once we got our jets. I was working with Sabre on ways to make it work when I resigned from go! and moved over to Mokulele, and when I left, no one else picked it up (or had the Sabre knowledge to know how to do it).

I still think people aren't realizing how aweful Yucaipa was as owners of AQ... they really let it fall apart.
xx

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