Thursday, April 03, 2008


Airlines dropping like flies, is the Hawaii economy next?

by Larry Geller

It can cost $600 to $1,000 to get out of Hawaii right now. That's probably temporary, but who knows where airlines (and the Superferry) will ultimately peg their rates?

Aloha and ATA have suddenly quit. Gone. No longer flying. Then United Airlines Tuesday canceled some flights out of Hawaii due to FAA orders grounding Boeing 777s.

The papers have stories of stranded visitors who have to pay again to return home, if they can find flights at all. This was unexpected and devastating for both visitors and of course for airline employees and their families.

This leads to fear, uncertainty and doubt for tourists planning their vacations here.  It also raises questions about the viability of Hawaii's travel-dependent economy.

The failure of the airlines was disorderly, and it's not clear whether government action could have avoided the sudden shutdowns. One thing that state governments should be doing in the aftermath might be to take a deep breath and look at the current risks to the economy and how that might affect key infrastructure and business health.

Band-Aids may not help as the recession deepens. Nor will amateur efforts to fix it likely succeed. It might be time to round up the economists and other usual suspects, lock them in a room with sufficient beer and snacks, and then pay attention to what will no doubt be bad news but possibly also some good advice.

The alternative is a little waterboarding, which the feds insist is not only legal but effective. (Can you tell what I think of mainstream economists?)


What’s insane is that our bankruptcy laws allow them to strand these people rather than forcing them to make good on the “contract” they promised in selling the ticket by paying another carrier to fulfill the obligation. And even more insane is that no one seems concerned at this glaring example of U.S. Government backed corporate theft.

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