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Monopoly Anyone? Why Hawaii Needs Another Airline - With A Free Essay Review

Monopoly Anyone?

“Monopolies were made illegal in 1890 by the Sherman Anti-Trust Act. It was called Anti-Trust because that was the form that monopolies held in those days. A group of companies formed a trust to fix prices low enough to drive competitors out of business. Once they had a monopoly on the market, these trusts would raise prices to regain their profit.” (Amadeo) Someone is playing monopoly in Hawaii and their name is Hawaiian.

Prior to 2008, Hawaii had two major inter-island carriers. With a variety of flights available to several destinations, the residents of Hawaii, mainland travelers, as well as the local businesses, all benefited. People would jokingly call the two businesses the Hatfields and McCoys, but in reality it was friendly competition. Having two airlines kept the ticket fares, well, fair. It also kept the individual airlines looking for ways to better serve their passengers, as well as help the economy. Hawaii needs another inter-island airline.

The start of another inter-island airline, here in Hawaii will promote lower fares. In an article from the Rapid City Journal, Sioux Falls is in competition with Rapid City for more travelers. One reason that Sioux Falls has lost many travelers is because Rapid City’s fares are lower. The Rapid City Airport director, Cameron Humphres said, “The best thing that an airport can do to help airlines lower their prices is one, encourage competition…“ (Solerlin).

Since the closing of Aloha Airlines in March of 2008, there have been only 3 inter-island carriers. Two of them are but tiny companies that service mostly the smaller airports and fly smaller aircrafts. The third airline, Hawaiian, has an all jet fleet and serves the larger airports. Because of their fleet, size, and the market that they serve, the two smaller airlines are not able to compete with Hawaiian. James Mossman, County Specialist-Economic Development-Maui County, confirms, “There is a definite need for another airline to service the islands. One reason being that there is a lack of competition.”

Since Hawaiian has the majority of flights over Hawaii’s frequently used freeway, they are able to price the fares to their advantage. Having competition not only will encourage lower competitive fares, but it will promote better customer service.

With another inter-island airline in Hawaii, the needs of Hawaii’s people can be met. “Customer service is the service or care that a consumer receives before, during and after a purchase. It's one of the factors that come in to play when a consumer is determining buying value, the other is the quality of the product or service that is being offered” (Lake). Providing transportation with a variety of routes to all of the islands will be serving Hawaii and it’s people. Today, Hawaiian has two non-stop flights from Maui to Kona and one from Maui to Hilo. (Hawaiian Airlines). For the people of the Big Island, to travel to and from Maui, the selection is limited.

Servicing Hawaii’s people and visitors means more than offering a better flight schedule. It is also the treatment the customer receives from the air carrier. Having competition promotes better customer service by allowing the customer to make choices. If a customer is unhappy with their service or treatment, the customer can change companies. In Hawaii today, an unhappy passenger with Hawaiian has no choice.

Hawaii needs another inter-island carrier because it would help to stimulate the economy. With another airline within our state, created jobs would not be limited to just one island but to the four major islands. According to the United States Bureau of Labor Statistics, last December Hawaii’s unemployment rate was at 6.6%. If broken down by county’s, it looks pretty grim. Maui county at 7.4, Lihue at 7.8, and Hawaii island at 8.6. The start of a new airline would be creating jobs at all the major airports, and this would be just the tip of the iceberg. Increasing “island hops” would also promote visitors to experience the other islands as well. By doing this, they would be helping the economy as they experience the restaurants, sights, and hotels of another island. In other words, they would be spreading the Aloha.

Some people feel that if there is another carrier, the lower air fares would be temporary. What happened in 2006, was an intentional strategy to force one of the existing airlines, Aloha or Hawaiian, out of business. In this case, Go! Airlines offered low fares from $1, to $29 and then to $39. (Yonan). This started a fare war with the two local airlines matching those unusually low fares. This may have been one of the causes of Aloha’s demise. By offering these low fares the companies could not make a profit, let alone break even.

Today, Hawaiian Airlines advertises their lowest fare from Maui to Honolulu at $69. This may be just a few dollars above what was charged in 2008, but there are limited number of seats available. The majority of the passengers will be spending anywhere between $90 to $127 one way per person, depending on the season, availability, and how soon in advance their booking is done (Hawaii Airlines).

Also, let us not forget about our checked in luggage. Gone are the days of free checked in luggage, free meals (mainland flights), free anything. Hawaiian charges $17 for the first and second bag to be checked in. The third bag is a $25 charge. So, you think that the ticket that you just purchased is a pretty good price at $69, tack on the one bag fee and your ticket is now $86.

Some people may feel that there is not a need for another airline here in Hawaii. They feel that the passenger loads have dropped since the good days of travel in the 1990’s. In a personal interview with the manager of Aloha Contract Services, Lehua Silva, Lehua states, “There are not that many passengers traveling, not like before. Hawaii doesn’t need another airline for inter-island travel. In fact there are days are flights are wide open.” True. Passengers traveling inter-island have dropped, due partly to the direct flights from mainland carriers. According to the Department of Transportation, inter-island travelers in 1999 were just over 10million. In 2009 the number of travelers dropped to 7.4 million (Halas). Yes, the number of travelers may have decreased, but there is still room for another airline. Island Air has only 3 flights between Kahului and Honolulu. Go!Mokulele offer 8 flight with the same city pairs. Hawaiian, on the other hand has 27 flights from Kahului to Honolulu. Someone is not sharing.

We need to keep Island Air and Go!Mokulele in service, they take care of the people in remote areas of Hawaii, the airports that jets are unable to fly into. They need to concentrate on the smaller airports, by expanding their flight schedule and focusing on affordable fares. With this taking place, having another airline in Hawaii, competing with Hawaiian would accomplish lower fares, better customer service and a move towards a better economy in Hawaii.

In 2001 all the airlines were having a difficult time. It wasn’t any different here in Hawaii. It was in December of that year that Aloha and Hawaiian had announced that they would be merging. No longer would it be two separate airlines. There would be just one major airline servicing Hawaii. Greg Brenneman, former CEO of Continental and the chairman of the merger, said, “The Hawaii market is not big enough for both” (Hooper). At this time the two carriers also received a federal anti-trust exemption. Hawaii’s politicians and the community were all worried. They feared that having just one airline would create a monopoly. That the one airline could easily adjust fares to their needs, forget about customer servicing, and create unemployment.

The merger never took place. But, is there any difference here today? There is just one airline in control of our skies. Without competition, businesses may not know how to better service their clients, without competition customers do not have a choice, and without competition it becomes a monopoly. Let’s not play monopoly, here in Hawaii.



I think the introduction is a bit weak because of its reliance on quotation to provide an historical background that in itself hardly seems necessary or relevant. You write reasonably well, so you should write your own introduction. If you wanted to refer to the original anti-trust act in the course of making an argument about Hawaiian Airlines' alleged violation thereof, then it might make sense to include (later in the essay) that quotation, or a paraphrase of it, but you don't actually argue that the airline is in violation of the law, you instead seem to be arguing only that it has a de facto monopoly (and if that is what you are arguing, your essay should more clearly make the point). When you say that the airline is "playing monopoly," of course, you seem to be implying that Hawaiian Airlines are accountable for the existence of this alleged monopoly, but your essay again doesn't make an argument in support of that implication.

What your essay argues, then, is not that Hawaiian Airlines are doing or have done something wrong in order to achieve monopoly status, but rather that there ought to be another airline in competition with Hawaiian Airlines. In support of this argument, you make two general points: negative things have followed the dissolution of Aloha, and good things would follow the introduction of a new airline. Those are reasonable arguments. The first, however, would be more compelling if you could show that the negative things that have happened are in fact a consequence of the lack of competition. As you know, the fact that B follows A in time doesn't mean that A causes B. (The formal name of the logical fallacy of thinking otherwise is the “post hoc ergo propter hoc” fallacy, or just “post hoc fallacy”.) To demonstrate a causal relationship, it might help to compare the fare increases and fee increases (e.g., the baggage fees) at Hawaiian Airlines with increases elsewhere in the airline industry. Many airlines have increased fares and fees in the past several years, in part because of increases in the cost of fuel. Can you demonstrate that increases at Hawaiian Airlines have been steeper than elsewhere? Regardless of your answer to that question, I suspect that most people would be sympathetic to the suggestion that competition, in the absence of price regulation, would be the most effective way of keeping prices as low as possible. Most readers might agree too that competition might lead to improved customer services, and that it might create more jobs. The only problem for me with these suggestions is that they are the only support offered in your essay for your argument that there ought to be a new airline directly competing for the business of Hawaiian travellers. What is most problematic here is that you don't demonstrate that your proposal is feasible or even possible. If it were the case that certain regulations were in place preventing another airline from competing with Hawaiian, then your essay would make sense as a proposal to end those regulations. You would be asking specific people (politicians, say) to undertake specific action. As it stands, however, you seem to be asking no one in particular (or the world in general) to start a new airline. What could anyone actually do in response to your essay? Does your essay really make a proposal, or does it just express a wish?

Best, EJ.
Submitted by: rkpahia

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