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IT USED TO BE SIMPLE to make a buck in Hawaii's interisland airline industry. Now? Hard and getting harder. Direct Mainland flights to the Neighbor Islands -- as well as heavy competition among interisland carriers -- have made operating an interisland airline a tough route to fly. Consequently, the three interisland carriers -- Hawaiian Airlines, Aloha Airlines and Mid Pacific Air -- have each begun actively scouring the globe for the blue skies of profitability that are clouding over in Hawaii.
When they grouse about direct Mainland flights to the Neighbor Islands, it sounds as if Hawaii's interisland airlines are simply sore losers. After all, their business -- interisland air traffic -- actually improved by nine percent in 1984, according to the state's Department of Transportation, despite the direct flight competition. But there's more to it than that. Last year's tourism-related traffic increase helped two of the carriers regain ground lost when Mid Pacific entered the market, but all three only flied an average 59.7 percent full for the year. Those unfilled seats caused Hawaiian, Aloha and Mid Pacific to continue battling for passengers with low fares, which forced profit margins to stay discouragingly low. Why hang around Hawaii, they figure, waiting for more blows to their bottom lines?
Among them, Hawaii's three airlines have taken off in nearly every direction -- headed for places like Asia, the South Pacific, Paris, Cairo, and the Mainland U.S. -- and have each experienced mixed results. Aloha's attempt to serve Guam and Taiwan once a week, for example, was an outright $4-million failure, causing Aloha to lose $1.8-million net in 1984. The results of other ventures, such as Mid Pacific's scheduled Mainland short-segment routes, started in February, are still up in the air. The company last year charged off $12.1 million for plane acquisition costs, which contributed to its $31,000 loss in 1984. Still other schemes, such as Hawaiian's scheduled flights to Los Angeles, have yet to take off. So far, Hawaiian's other out-of-state gambles had a hand in its profitability last year, with the company bringing in a $5.8-million net gain in '84.
In fact, Hawaiian began doing something about the market's shrinking profitability in late '83, when it started charter operations that have since taken it...