Governor explores all options to bring down Hawaiian Air fares
The Lolo Administration is “exploring” all options in its quest to bring down airfares for travel between Honolulu and Pago Pago, and one of those options is to be a part of Hawaiian Airlines, by buying shares into the Honolulu-based carrier.
However, Gov. Lolo Matalasi Moliga emphasized during a news conference yesterday that buying shares is only exploratory and all final decisions will be discussed with territorial leaders.
Lolo says buying shares was an option discussed during a meeting last week with the Fono leadership, Chief Justice Michael Kruse, Congressman Faleomavaega Eni and Interior Department official Nikolao Pula.
He said the idea option came about following his meeting early this year with Hawaiian’s president and CEO Mark Dunkerley to discuss a number of issues including the possibility of the airline lowering fares on the Honolulu-Pago Pago route.
Following that Hawaiian meeting, Lolo said, “I really don’t see any light beyond what we see now” with air fares coming down any time soon and the “earliest” possible fare reduction is not until 2017 when the airline will introduce smaller, more fuel efficient planes.
However, “there is no guarantee” there, he added quickly.
“So it’s a simple thought — if we can’t beat the system, we might as well join,” he said. “Me personally, I cannot just sit around and look at what people are going through” he said, referring to the high fares.
Lolo says he asked those present during last week’s meeting to look at other options available. “We’re trying to explore if we can be a part of Hawaiian Airlines. We are still exploring that,” he pointed out.
“So as leaders we should start thinking of doing something different. And I think we cannot just sit around and watch Hawaiian Airlines,” he said. “We’ve got to find ways to give our people a break, in terms of reduced air fares.”
When asked as to when the administration plans to finalize a decision on getting into the risky airline business and a funding source to buy shares, Lolo replied, “we haven’t gotten into the stage of funding. We are exploring options.”
The governor says the administration understands and knows that it’s hard for two airlines to survive in this market “but the fact is — what can we do to give our people a break in terms of air fares?”
“We rely on the airline for almost everything that we do... in American Samoa. Economic development, tourism, promotions and all that. Not to mention the day to day living of our people,” he said.
“It also brings in the issue — if we should get involved in an airline. The many needs of the territory must be taken into account that are dependent on air service, such as tourism development, and the residents traveling back and forth, with no break in airfares any time soon, Gov. Lolo said.
Following the Honolulu meeting with Dunkerley, the Governor’s Office issued a news release saying that the airline’s CEO rejected the governor’s request to immediately lower fares between Honolulu and Pago Pago, while also announcing that Hawaiian is acquiring smaller capacity planes to serve the needs of American Samoa, which will mean lower airfares — in 2017.
Assurances were extended to Lolo that the airline would work collaboratively to find solutions to the challenges contributing to the high air fares and frequency of flights to the territory.
Dunkerley acknowledged the disparity in fare structure relative to the Hawai’i-West Coast route and the Honolulu-Pago Pago leg, and said the factors contributing to this fare difference are operating requirements, fuel price differential, occupancy rate, and high cost of government services.
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