Daniel K. InouyeSenator
As an island state, Hawaii is uniquely dependent on commercial aviation. Our state’s economy requires a vibrant air service sector to connect us within the state, to the rest of the nation, and to the world. Not only do our air carriers allow us to move passengers and goods in an efficient and timely manner, but they help unite us as a community and people. Simply put, aviation is vital to the everyday lives of our citizens.
Unfortunately, the aviation industry, and Hawaii’s air carriers in particular, are facing substantial financial challenges. Oil prices have risen to record levels and ruthless competition in Hawaii’s air service market has taken its toll. Last week alone, Hawaii’s own Aloha Airlines, along with ATA, Skybus, and Champion declared bankruptcy and ended commercial passenger service. Two of these airlines, Aloha and ATA, provided a substantial share of Hawaii’s air service.
Despite these challenges, we must ensure that the air transportation system continues to serve our state effectively. At the same time, we must understand the impact airline financial instability has on our local communities and economy.
Aloha Airlines, for example, has been an important institution in Hawaii for more than 60 years. Aloha provided transportation for nearly four million passengers annually in our state, with about 100 interisland flights daily. Aloha also served as one of Hawaii’s largest employers, with more than 3,500 workers and an annual payroll exceeding $100 million.
Nearly everyone who lives in Hawaii has flown on Aloha’s interisland flights for business, or to visit friends and family. Many of us know people who work for Aloha.
As a matter of fact, I worked for TransPacific Airlines for a time early in my career, before it became Aloha Airlines. The Aloha workforce has served all the citizens of Hawaii in a dedicated fashion for a very long time. Now, many of these employees face uncertain futures. I am deeply saddened by this unfortunate turn of events.
At this time, it is critical that we take action to support these loyal Aloha employees. In particular, it is my hope that local lending and financial institutions will recognize the difficult position in which the Aloha employees find themselves. I call on these institutions to consider the unique circumstances of what may well be the largest lay-off in Hawaii’s history and to provide whatever flexibility they can to customers in good standing.
Providing temporary relief from penalties or late fees is just one way that former Aloha workers may be helped through this difficult time. Aggressively looking at the possibility of hiring segments of this well-trained workforce is another option I hope many businesses in Hawaii will seriously consider.
On the federal level, we have been working to ensure that the modernization of the nation’s air traffic control system results in efficiencies that will increase its safety and effectiveness to benefit both the industry and the citizens who depend upon that system. However, this is clearly a long term solution to some of the problems that impact not only Hawaii’s, but also the nation’s, air carriers.
In the near term, the Congress must determine what we can do at the federal level to help the airline industry make it through what has become an increasingly difficult period. Unfortunately, some solutions that have been put forward may provide only temporary relief, as our weakening national economy and high fuel prices threaten to overwhelm any federal initiatives.
We must also recognize that deregulation has dramatically altered the playing field for the nation’s air carriers. While deregulation has created substantial benefits for a number of communities, others have been less fortunate and do not have the same air transportation opportunities they were once provided.
In Hawaii, these challenges are amplified as we have numerous small communities in a market that is geographically isolated. Finally, I would note that new entrants into Hawaii’s market have made survival impossible for some. Aloha is the most obvious example of the impact of overly aggressive pricing in the marketplace.
Congress must deliver on the promise of providing affordable, secure, and quality air service to all Americans, regardless of geographic location. This was the promise of deregulation and we must find a way to deliver on our past commitments.
The Honorable Mazie K. HironoUnited States Representative, Hawaii
Witness Panel 1
The Honorable Vincent K. SnowbargerDeputy Director for OperationsPension Benefit Guaranty Corporation
Mr. David BanmillerChief Executive OfficerAloha Airlines
Mr. Charles WillisOwner and ChairmanIsland Air
Mr. James C. MayPresident and Chief Executive OfficerAir Transport Association
Mr. Michael W. ReynoldsDeputy Assistant Secretary of Transportation for Aviation and International AffairsU.S. Department of Transportation
Ms. Lesley KaneshiroChief Financial OfficerIsland Air
Mr. Barry FukunagaChief of StaffGovernor Linda Lingle, Hawaii