Sunday, March 30, 2008



by Larry Geller

In quick succession today came the news that Aloha airlines will be shutting down passenger service Monday and that the governor will ask the judge to delay the shutdown at a scheduled hearing Monday afternoon:

Lingle questions Aloha shutdown, will ask bankruptcy court for delay

Gov. Linda Lingle said she will ask a bankruptcy judge not to allow Aloha Airlines to shut down until she is satisfied the airline "exhausted all possible avenues for continuing its operations."

If you would like to attend the hearing, here is the posted calendar for the case. Monday, 2 p.m., 3rd Floor of the Federal Courthouse.

Correct location of Bankruptcy Court (thanks, anonymous commenter!) from their website:

The court is located in downtown Honolulu, on Bishop Street between Beretania and Hotel Streets, with entrances at both Union and Fort Street Malls. We are on the Lobby Level of 1132 Bishop, towards the glass doors in the north corner. You will be required to show a picture I.D. and pass through a metal detector. No electronic devices (cell phones, pagers, PDA's, etc.) are allowed on the premises. You may leave these items at the security desk and reclaim them when you leave.

Mailing Address
United States Bankruptcy Court
District of Hawaii
1132 Bishop Street, Suite 250-L
Honolulu, HI 96813

You'll have to leave cellphones in their little filing cabinet before going in (or better, leave it in your car since no one supervises the file cabinet). The calendar below will be at this link only for a few days.

Court Calendar

The court maintains a web page for the case here. Aloha Airlines has a press release and FAQ here.

I am wondering if even a governor can compel an airline that has run out of money to continue operating. It should be an interesting, and very sad, hearing tomorrow. The articles note that over 1,900 employees and their families will be affected. They would normally be due 60 days notice if their jobs are to end. Update: this evening's news articles mention 3,500-3,550 full- and part-time employees.

In addition to the direct job loss, the ripple effect of this shutdown through Hawaii's economy will probably be hard to predict.


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FYI: not sure if they've moved this due to anticipated crowds, but the Bankruptcy Court is not in the Federal Building with the other federal courts.

The fare war is a bit of a red herring.

Aloha sowed the seeds of their destruction when they changed the pricing and reservation system that we had for decades. It used to be that you could buy a coupon for a reasonable price make a reservation and show up for the flight or cancel it. You could decide on Thursday to take a weekend whether in Honolulu or Puna- for one price and not have to buy tickets weeks in advance to get a decent price or pay double to go to Maui or the Big Island.

Then Aloha stopped coupons and, more importantly, made you pick a day and time to fly weeks in advance and the longer you wanted the higher the rice would be.

People would fly all the time but don’t any more because if you decide Thursday to go Lahaina you don’t just pay double the $39 but $120 each way.

The only way to make money is to run fuller planes and get more volume, more passenger per plane. But now people only fly when they have to , not when they want to.

Stupid executives. Stupid decisions. That’s what doomed Aloha, not any predatory pricing by a new airline but their own new predatory pricing and reservation system that they foisted on the flying public.

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