Posted By Beth Terry on April 1, 2008

Aloha Airlines closed it’s doors yesterday. One of the saddest business closings I’ve seen in many years. After 46 years of carrying locals to relatives’ graduations, birthdays, baby luaus, and weddings - they are gone. Aloha was family, and they were knocked out of the market intentionally. Many of you know I spent the better part of the last 30 years living in Hawaii. I’ve only moved to Phoenix since 9/11. So this one hits close to home.

I know I usually write upbeat blogs… but… I’m pissed. This closing didn’t have to happen. It’s a classic tale of a foreign company messing with a good local company and destroying it. And Hawaii deserves better. Too bad they didn’t wake up in time.

Aloha’s demise is not just a tale of bankruptcy. IMHO it’s a tale of predatory pricing. Did Aloha outrun their money? Yep. Did they make some poor business decisions banking on past successes? Yep. Did they try and copy Hawaiian Airline’s successful foray into the mainland market? Yes again. And because of that and the undercutting of fares by Go, they weren’t strong enough to outlive the recent sub-prime meltdown spreading across the US.

But it was an attack, plain and simple. In the midst of rising gas prices, a new rival showed up on the Hawaiian turf and took advantage of Hawaii people’s short sightedness. In the midst of a crashing economy, Go Airlines, part of the Mesa Airlines group, came in and started offering $19 fares. At one point they had $1 fares! This is to fly 200 miles across the ocean to a neighbor island! You can’t drive around the island for $19 in gas, let alone fly interisland!

Price wars are not new, but this one was particularly egregious. Mesa wasn’t even trying to make a profit with Go. It was just trying to run an airline out of the market.

IMHO, Mesa should be spelled Mess. But maybe that’s just me.  They were listed as the airline with the highest record of canceled flights. And according to recent reports currently being investigated by the FAA, one of the Go pilots fell asleep during an interisland flight and missed the airport. Their planes are uncomfortable and a little scary. And I’ve had better inflight service on a greyhound to Mexico. My question is this:

To what end, Mesa? What was the point? It’s not like Hawaii’s a lucrative market. It isn’t the easiest market. And certainly not the cheapest. Why did you do this? You just wanted to say you have an airline in Hawaii? You haven’t been there long enough to understand the local culture. You don’t understand the real cost of doing business there, because you’ve been fronting the money to Go all this time for this frontal assault. You’ve destroyed a legacy airline and - what? You’ll now hunker down and figure out how to recoup all those lost earnings? Do you think locals will fly you once you have to charge real fares? Don’t kid yourself.

You really don’t understand what you just did, do you? You actually have NO CLUE. You have no sense of how an island economy, and island culture operates. I’m not always crazy about the way things are there… but I do understand. I call it the “Baby Luau Effect.”  In other words, everybody talks to everybody. Every one of those 2,500 Aloha employees impacted by this are related to at least 10-15 people. Do the math. This may take awhile to come home to roost, but it will come home eventually.

I remember when United Airlines went on strike back in the 80’s. An island can’t survive long without a major carrier coming in. At the time United was the 2,000 pound gorilla with the major mainland market share. I would venture a guess that UAL never recaptured the market in Hawaii again. Even decades later I still hear locals saying, “I’d take the United flight up to Vegas, but I remember that strike and I haven’t forgiven them yet.”

The Hawaii blogs are filled right now with vitriol for Go Airlines. It will be interesting to see what happens.

Meanwhile, I’m sending my Alohas to the Aloha family. To the special guys like Billy Remular who is Aloha personified. To the mothers and fathers who worked there, the college kids in the Explorer program, the grandparents who cleaned the airplanes, the ohana (extended family) who ran the ticket counters, the baggage handling, the premier clubs, and worked the tarmac. My heart goes out to all 1,900 who lost jobs because of what looks like unfair trade practices by a non-Hawaii company.

Mesa - every time I see that you’re the carrier for a USAirways flight, I go to another airline. I’d rather pay extra than fly with a company who operates with no conscience.

Aloha Aloha,

E piha keia la i ke aloha a me ka pono
(May Your Day be Filled with Love and Goodness)

Beth

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Write to us. Send your Alohas to Aloha Airlines. We’ll pass it all on to the Ohana. Mahalo Nui Loa, Aloha A Hui Hou. (Thank you very much, Good Bye, Till we meet again.)

Beth Terry, CSP, is a Professional Speaker, Author, and Corporate Trainer. She has spoken to hundreds of thousands of people in six countries on Customer Service, Managing Change, Handling Stress, and Work Life Balance.

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@ 2008 Beth Terry Seminars, Inc. All International Rights Reserved

Categories: Work Ethic
Tags: Aloha Airlines, Go Airlines, Hawaiian Airlines, malfeasance, Mesa Airlines, questionable business practices