Hawaiian Picks Up Oakland – Honolulu

It’s not big news, but Hawaiian will launch Oakland-Honolulu service that was lost when ATA and Aloha shut down.  I only bring this up to point out a fallacy in the airline consolidation strategy:  while this won’t happen on every route that disappears, the consolidation argument assumes that no other airline will fill an abandoned route.  That simply isn’t the case.  As we see here, airlines disappeared but the capacity returns.  Keep this in mind every time you read about consolidation removing capacity from the market.  Sure, some will disappear, but other airlines are always willing to grab routes where they see opportunity.

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  1. One route reappearing out of the dozen or so that were lost is hardly groundbreaking. Where there are profitable routes carriers will come back in and keep the capacity there. The fact is that many of the airlines shutting down just could not string together enough profitable routes to handle the burden of their other routes. I would imagine that some other ATA routes might also get picked up, though most were already covered by competition, so there isn’t much to poach. This actually may have been the only route that disappeared with the ATA and Aloha bankruptcies. If capacity goes down but the routes remained covered odds are that the airlines will be able to increase fares, which is what they want.

  2. I hear what you’re saying, but just because a route isn’t profitable for one airline doesn’t mean it isn’t profitable for another. You make a good point that likely only a handful of those routes will return, but the implication from the pro-consolidation folks is that once you pull a route, no one will ever fill it. I think the reality is more complicated.

  3. Too bad Hawaiian can’t bring their 767′s into SNA. AQ had a nice little niche there. A very affluent market willing to pay more to avoid LAX.

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