Airlines have trouble making a profit in paradise

— -- The collapse of Aloha and ATA airlines has removed thousands of seats each week from the Hawaii air travel market, but don't expect the price of a plane ticket to rise much in the near future.

High fuel prices already had pushed up fares for U.S. mainland-Hawaii and inter-island travel even before Aloha, Hawaii's No. 2 local carrier, ceased passenger operations on March 31, and ATA pulled the plug on its few remaining West Coast-Hawaii flights on April 3.

Yet, a slowly shrinking inter-island market — and the continued presence of an aggressive price cutter, upstart Go Airlines, that already stands accused of predatory behavior — could help keep the lid on fares between the islands. Meanwhile, ATA's withdrawal from the heavily served Hawaii-mainland routes will hardly make a dent in the huge number of cheaply priced and free tickets.

Aloha's exit did take about 88,000 seats a week out of the Hawaii inter-island and Hawaii-mainland markets. But together, Hawaiian and Go already have added about 56,000 seats to fill the void.

"Hawaii is incredibly well served," from the mainland, says Mark Dunkerley, CEO of Honolulu-based Hawaiian. "We've seen a 30% increase in trans-Pacific seats in recent years, so the impact of Aloha's demise on that market will be pretty minor."

Nevertheless, he says, Hawaiian is now in the market for more planes to capture some of the business spilled by Aloha and ATA.

Six of the USA's seven largest carriers fly to Hawaii, mostly to give frequent fliers the opportunity to cash in mileage points for free trips to one of the top vacation destinations in the world. That's on top of Hawaiian's service to the mainland.

The lone big carrier that doesn't fly to Hawaii, Southwest, sold seats to the islands on its partner, ATA. Now it's looking for a new partner.

Tough environment

Hawaii is called the Aloha State, but aloha's definition — "welcoming and hospitable" — doesn't describe the airline business there.