STAND. COM. REP. NO.3078
RE: S.R. No. 24
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2002
State of Hawaii
Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.R. No. 24 entitled:
"SENATE RESOLUTION ENCOURAGING ALL STATE AGENCIES TO DO EVERYTHING POSSIBLE TO FOSTER COMPETITION IN THE INTERISLAND AIR TRANSPORTATION MARKET,"
begs leave to report as follows:
The purpose of this measure is to encourage state agencies to do everything possible to foster competition and new entrants in the interisland air transportation market.
Testimony in support of this measure was received from the Hawaii Tourism Authority and Citizens for Competitive Air Travel. The Department of Transportation provided comments.
In December, 2001, Hawaii's two interisland air carriers, Hawaiian Airlines and Aloha Airlines, announced plans to merge into a single entity. Immediately the public became concerned that the frequency of interisland flights would decrease, fares would increase, workers would be terminated, and the overall level of service would decline.
The State and federal Attorneys General undertook a comprehensive antitrust review of the proposed merger. In addition, many lawmakers opposed the merger, and sought appropriate legislative action in response. This measure was introduced in response to these public concerns.
In March, 2002, Hawaiian Airlines and Aloha Airlines terminated their merger plans, but your Committee still supports this measure. One reason is that competition in any market inherently benefits consumers in a capitalist society.
In addition, there is still some doubt as to the financial stability of Hawaii's existing interisland air carriers, and there is no guarantee that they will both stay in business. Also, the two entities may revive their merger plan at a later date.
Based on these concerns, your Committee supports this measure and encourages every state agency, particularly the DOT, to do everything possible to foster competition and new entrants in the interisland air transportation market.
As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee concurs with the intent and purpose of S.R. No. 24 and recommends its adoption.
Respectfully submitted on behalf of the members of the Committee on Transportation, Military Affairs and Government Operations,
CAL KAWAMOTO, Chair