Aloha Airlines, a long-time mainstay of Hawaiian inter-island air service announced on Friday that it was suspending all passenger flights as of March 31st. The surprise came amid growing fuel costs and lower airfares due to fierce competition in the Hawaiian market.
The last year has been especially hard on inter-island carriers since the start of go!, an inter-island carrier launched by Arizona based Mesa Air Group. Since go! started flying, inter-island fares have dipped to as low as $10 one-way, a price matched by all carriers in an attempt to retain customers.
Unfortunately Aloha has also retained an older fleet of aircraft that it uses to island-hop. These aircraft burn more fuel and require more maintenance hours than their newer counterparts which has resulted in higher operational costs. Even with successful cargo operations, Aloha has been unable to turn a complete profit and saw a loss of over $78 million in 2007 alone.
The bankruptcy filing also comes amidst a lawsuit Aloha filed against Mesa Air Group, alleging it used confidential information when starting go! airlines. A quote from Mesa’s CFO stated: “We definitely don’t want to wait for (Aloha) to die, rather we should be the ones who give them the last push.”
A sad moment indeed. Good luck to all of the Aloha employees affected by this unfortunate event.
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