Congresswoman Uifaatali Amata has raised concerns about the cost of Hawaiian Airlines airfares between Honolulu and Pago Pago, and suggests that the airline is using the lack of competition on this route to its advantage.
In a November 4 letter to the CEO of Hawaiian Airlines Joe Sprague, the Congresswoman says a roundtrip between Honolulu and Pago Pago is roughly $1000; while an economy round trip between Honolulu and Los Angeles varies, but almost never approaches higher than $500.
Yet the distance of the two routes, is within 15 miles the same.
Uifaatali points out that the overall fuel cost is not substantially different for the two routes and a detailed analysis is not likely to demonstrate higher crew costs incurred on the HNL-PPG route than for HNL-LAX. Rather, crew costs are arguably the same or less because no hotels and associated costs are utilized with turnaround crews.
The Congresswoman asserts that no marketing costs are incurred of any significance to maintain passenger loads on the Pago route, as there is no competition to deal with. And adds that the marketing cost for the Los Angeles route from Honolulu “is not known to us, but it is safe to assume that it is a substantial cost that must be added to the individual ticket price. “This should result in a less expensive ticket for the Pago route, as there is no competition that must be accounted for.”
Uifaatali points out that instead of using the lack of competition as an item, inducing a lesser cost, Hawaiian has instead used the opportunity to impose higher cost on the individual passenger.
“Based on comparative observations, the price should be under $500 for a round-trip economy airline ticket between Pago Pago and Honolulu, yet the prices have been set with the knowledge that there is no competition on this route. The fact that Pago Pago is a community of modest means is well known, and it is only reasonable to assume that this price gouging is conscious abuse of an underserved population.”
The Congresswoman told the Hawaiian Airlines CEO that if new management “will not undertake reasonable setting of ticket cost for this community, then this community must ask the Federal Government and the Congress to enforce reasonableness in the exercise of its Federal License. But if this is not the case and the prices are indeed reasonable, we need a detailed and independent analysis explaining why.”
Uifaatali said this must be dealt with before approval is granted by the Federal Government to provide any further financial benefits to the prospective operating carrier, a reference to the takeover of Hawaiian Airlines by Alaska Air.
