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+--- Thread: Inter-Island Airfares on the Rise (/showthread.php?tid=6610)
Inter-Island Airfares on the Rise - macuu222 - 12-11-2009
Anyone else notice the steadily increasing cost to get to Honolulu (or anywhere else inter-island for that matter). They're also including new additional taxes that make the cheapest roundtrip to Honolulu now about $150.00 per person. Go airlines absorbed Mokulele reducing competition...but now even Go airlines is barely hanging in there. It will be interesting to see how this plays out next year. It may wind up being cheaper flying to the mainland direct than flying inter-island!
RE: Inter-Island Airfares on the Rise - Kapohocat - 12-11-2009
Yup! I just did our hanai son's Xmas tickets from HNL. Ouch! I want our $39 or even $49 tix back!
RE: Inter-Island Airfares on the Rise - JerryCarr - 12-11-2009
For the time being, we have a duopoly, and prices are beginning to resemble what we had when it was just Hawaiian and Aloha in the interisland market. As much as I don't like go!'s business practices and management, we will face a monopoly if they go under. If you think prices are high now, just wait until that happens.
BTW, I read a while back on an aviation website that the break even point for interisland flight prices is around $55-$65 each way at current oil prices, with go!'s less efficient barbie jets at the high end of that range. Those $39 fares were unsustainable unless the bottom were to fall out of oil prices. Nice while they lasted, though.
Cheers,
Jerry
RE: Inter-Island Airfares on the Rise - 808blogger - 12-11-2009
Airlines all have a fuel hedge, none of them pay "current oil prices". Also if you track the history of this process, I would say most if not all of the "blame" will go right back to hawaiian airlines. this issue connects in with the super ferry also.
Someone made a comment about it being cheaper to fly to the mainland than it was to fly interisland, thats about how it used to be for many years, it has only been within the last 4-5 years that interisland fairs were rational.
quote:
Originally posted by JerryCarr
For the time being, we have a duopoly, and prices are beginning to resemble what we had when it was just Hawaiian and Aloha in the interisland market. As much as I don't like go!'s business practices and management, we will face a monopoly if they go under. If you think prices are high now now, just wait until that happens.
BTW, I read a while back on an aviation website that the break even point for interisland flight prices is around $55-$65 each way at current oil prices, with go!'s less efficient barbie jets at the high end of that range. Those $39 fares were unsustainable unless the bottom were to fall out of oil prices. Nice while they lasted, though.
Cheers,
Jerry
RE: Inter-Island Airfares on the Rise - JerryCarr - 12-11-2009
808, I should have said "at what they are paying," not "current oil prices."
Southwest is an example of successful fuel hedging, but there have been failed efforts by other airlines. Fuel hedges are gambles. When a company locks in a price, they are gambling that the price will go up. Historically, this has been the trend over time, but if prices fall dramatically (as they did at the onset of the current recession) the hedge leaves the company paying far over market price. Hawaiian had a $9.2M charge against its 2008 earnings due to a poor fuel hedge position. One of Delta's management changes was partly based on a hedge position gone really bad. Google "airline fuel hedges" and you will see that some economists doubt the long term usefulness of fuel hedging while others say it pushes price increases into the future, thus successfully deferring higher costs. Few other airlines have matched Southwest's success, but most of them have tried, and even with successful hedging, the high cost of fuel eventually affects the bottom line.
RE: Inter-Island Airfares on the Rise - macuu222 - 12-11-2009
I should add that the $150.00 inter-island fare is the "cheapest" fare. If your looking to fly interisland anytime from the 15th of December through the Holidays....Expect to pay "double" that as the cheap seats are mostly gone already