April – June 2008 Mixed Plate of Talk Story

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For two years, there was an interisland airfare war between Aloha Airlines, Hawaiian Airlines and go! Airlines created by the new upstart go! Airlines. With tickets as low, at times, as $19, all three airlines lost millions of dollars. On the final day of March, Aloha Airlines caved and ended its 61-year-old passenger service without any warning resulting in the weekly loss of 120 flights to the Mainland and 700 interisland flights. In an unrelated failure, three days later on April 3rd ATA, formerly American Trans Air, also stopped their service without any warning. ATA was a low cost, scheduled service and charter airline that was very active in Hawaii. Last year, ATA carried over 630,000 passengers to Hawaii, more than all but three U.S. carriers. Together, the two bankrupt airlines accounted for 15-20% of the transpacific lift to Hawaii. Coming as no surprise, visitor arrivals declined by some 16%. Thousands of passengers were left stranded, many without any reimbursement for unusable tickets.

For years, Hawaiian and Aloha airlines had dominated the interisland market. The three most recent competitors that failed were Mid Pacific Airlines that lasted seven years in the 1980’s, Mahalo Air that lasted for four years in the 1990’s and Discovery Airways also in the 1990’s for a short period of time. These were the large guys; there have always been some half-dozen small charter airlines for passengers and/or freight similar to the two small planes we charted to fly to Lanai in March for Mary Lou’s birthday.

Aloha Airlines cargo service is a separate entity from their passenger service. It was the only local airline with planes designed specifically for cargo and as a result, handled almost all of the 100 million pounds of annual inter-island air cargo. In late-April, the cargo service also ended which created a major problem for companies with time sensitive goods; e.g., Love’s Bakery ships 36,000 pounds of bakery goods daily to the neighboring islands. For several days, they were flying bakery products to the West Coast and then back to Hawaii via direct flights from the West Coast to the neighboring islands. Fortunately, the cargo problems were resolved within a week by a court-appointed trustee as part of the sale of Aloha cargo service to the Seattle-based owner of Young Brothers Hawaiian Tug & Barge. The new owner will continue to use former Aloha Airlines cargo service personnel.

However, 1,900 employees that were with Aloha Airlines passenger service, including 308 pilots and 380 flight attendants, have lost their jobs thereby ending Hawaii’s reign as among the states with the lowest unemployment rate. For several weeks the media had daily stories of former Aloha Airlines families, many with two former employees where both spouses lost both their jobs as well as their medical coverage. This is a very real problem for older, senior employees, particularly pilots. Regardless of their seniority or experience, a pilot who starts working at another airlines normally starts at the bottom of the pecking order at a salary that may only be about a fifth of what they were previously earning. Compounding the problem, most airlines are not hiring these days with the recession and soaring fuel costs.

The Pride of Aloha and the Pride of Hawaii have both departed from what was once a fleet of three Norwegian Cruise Line ships plying the Hawaiian waters. Only the Pride of America remains. Once considered a bright spot for the local tourist industry, the loss of two of the three ships is a major blow to the local cruise ship market . . . On to more pleasant matters . . . some high Honolulu rankings . . . Best Life, a men’s magazine, ranked Honolulu at the top of their list of 100 U.S. best cities to raise a family . . . Mercer, a New York consulting company ranked Honolulu as the top U.S. city for the third consecutive year in their annual quality of living survey; Honolulu was 28th world-wide out of 215 cities . . . Monocle, a London-based magazine also ranked Honolulu as the top U.S. city for quality of life and 12th world-wide out of 25 cities . . . And a bad ranking, Honolulu is the worst U.S. city for rush hour slowdowns according to a survey done by a Seattle company. Honolulu ranked 38th out of 100 U.S. cities in overall traffic congestion but was the worst at rush hour relative to normal congestion.

The Washington Redskins selected Colt Brennan, the UH record setting QB who was third in the Heisman race, in the 6th round of the NFL draft. Colt is a long-term project and not expected to do anything this year except be a backup. Ahead of him are a 4th year QB who has yet to establish himself as a bona fide NFL QB and a 14th year professional backup who probably only has another year or two left to play. Colt could easily become the #2 QB in the next year or two and possibly even become the eventual starter . . . The UH basketball team has signed a highly sought after, blue chip 6-7 Mainland forward who was a Junior College All American last year, He will join the team in the fall with two years of eligibility remaining. Last year, new Hawaii basketball coach Bob Nash inherited a team with seven seniors, four of whom were starters. Next year, his entire team will be underclassmen . . . Sports Illustrated recently ranked Punahou as having the best high school sports program in the country. The Buffanblu won 16 state crowns this past year including eight state championships in May. I went to Punahou for a year prior to WWII; two of my three children graduated from Punahou.

Here is a link to a YouTube discussion of “lock bumping” also known as “bump keying” or “key bumping.” When an ordinary key is filed in a certain way and inserted into a commonly used pin-tumbler lock, the key can be jarred in a manner so that the lock will open. The HPD has been conducting local presentations to increase community awareness of this security threat . . . Retired Navy Admiral Thomas Fargo, the former head of the U.S. Pacific Command (1999-2002) where he was the senior military officer in the Pacific, has a new command at the helm of the Hawaii SuperFerry as it recovers from a shaky start marred by lengthy legal battles, protests, rough seas and various material problems. The Superferry is now sailing daily between Honolulu and Kahului, Maui with two trips on Sunday, Monday, Wednesday and Friday. A second ferry is being built in Mobile and is on schedule to start service to the Big Island early next year. Following their protests, Kauai is apparently out of the Superferry loop for the near future . . . Honolulu recently announced that after four years of obtaining permits and conforming to various requirements, it is ready to ship 100,000 tons of trash each year from Oahu to a Washington state landfill. Meanwhile an Atlanta-based company has secured $100 million in special purpose revenue from the state to build a waste-to-energy plant in Hawaii that would turn garbage into electricity using plasma arc technology. Plasma arc creates an intense heat that breaks down molecules into their elemental atoms that subsequently recombine into harmless gases such as carbon dioxide. With plasma arc technology there is no burning or incineration and no formation of ash.

In June the Honolulu Star Bulletin became a morning newspaper vice evening and now competes head-on with The Honolulu Advertiser . . . In an analysis of residential property management companies, the May 23rd issue of Pacific Business News ranked Stott Real Estate, Inc. in 10th place statewide in total properties managed and in 3rd place among those companies that only manage properties on Oahu. My son-in-law, Tim Kelley, supervises our property management division . . . My daughter, Tracey Stott Kelley is the Listing Agent for all listings handled by The Stott Team. The June issue of Honolulu magazine ranked her in 3rd place statewide in total units sold and in 9th place statewide in listing dollar volume sold.
Last but certainly not least is increasing concern over Hawaii’s oil dependent economy, refer to the first page of the newsletter. Here is the newspaper link again; I encourage you to pull it up on a computer. The negative report by UH economists should probably have been anticipated what with higher prices in Hawaii for almost everything, the loss of thousands of airline seats and the departure of two cruise ships. However, it caught all of us by surprise. If it is truly important to the Hawaiian economy to get oil prices under $100 a barrel by the end of the year, at least it is something that all of us can easily track. The last time the state economy tanked was in the 1990’s, which was the only decade since statehood that did not have a period of soaring housing prices on Oahu.

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