My thoughts on the state of Hawaii’s proposed bailout of Aloha Airlines are below.

Hawaii’s House Speaker and Senate Ways and Means Chairwoman pledged to support the airline.  This is the same airline that filed for bankruptcy twice in three years.  Should Hawaii really bet your tax dollars on this horse?  A leading airline industry analyst said, ”Putting more money into this company is like giving a transfusion without trying to stop the bleeding.”  That visual says it all.

The Executive Director of the nonprofit Tax Foundation of Hawaii Inc. opposed 1993 loan guarantees given to Hawaiian Air because he thought that government shouldn’t guarantee the debt of a private company.  Now, he argues that since the state already granted the Hawaiian loan guarantee, it would only be fair to give its competitor a similar loan guarantee.  Two wrongs don’t make a right.  Remember what your Mother said when you tried to justify poor behavior based on your friend’s poor behavior?  It didn’t fly (pardon the pun) then and it shouldn’t fly now.

A local aviation industry historian said Aloha would be a viable company if you factor out the inter-island fare war.  Using that analogy, every business would be profitable if you factor out all business expenses.  The inter-island fare war and business expenses are facts of life and must be dealt with.  They cannot be dismissed.

Typically, airline industry loan guarantees may be given to a company with a temporary problem, but the company must have a business plan that will “stop the bleeding.”  Aloha doesn’t meet either of those criteria.  The fare war with go! and high fuel prices are persistent problems occurring in Aloha’s normal business environment.  This means that Hawaii taxpayers may ultimately pay for Aloha’s loan guarantees if the company fails after emerging from its second bankruptcy.

The same local aviation industry historian said Aloha is one of the top carriers in the industry when it comes to on-time performance and fewest consumer complaints.  That does not justify keeping Aloha afloat with loan guarantees knowing that its problems (fare war and high fuel prices) aren’t going away.

An Aloha flight attendant said the turnout of hundreds of employees at a recent rally shows that, “we have a company worth saving.”  Is that the criteria that should be used to decide if a company should be saved by the government?  If so, the government won’t be able to print money fast enough to save every company in distress.  Shouldn’t we set the bar much higher?

The justifications provided above in favor of government intervention on behalf of Aloha ignore facts and don’t pass the common sense test.  Let’s hope our elected officials do what they’re supposed to; act in the best interest of every citizen in Hawaii.

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