Congressman Faleomavaega announced today that he has written to Mr. Mark B. Dunkerley, President of Hawaiian Airlines, and informed him of his intent to ask for a federal review of airfares between American Samoa and Honolulu. Faleomavaega also asked Mr. Dunkerley for an explanation as to why roundtrip airfares between Pago Pago to Honolulu are more than 100% higher than roundtrip fares from Honolulu to California considering the destinations are of almost equal distance. Faleomavaega’s letter to Mr. Dunkerley is dated August 23, 2006 and the full text is included below.
Dear Mr. Dunkerley:
In response to concerns raised by my constituents, I am writing to ask you to explain why roundtrip fares between Pago Pago to Honolulu are more than 100% higher than roundtrip fares from Honolulu to California considering the destinations are of almost equal distance.
Recently, I received a pricing chart from Mr. Keoini Wagner which I have enclosed for your review. In correspondence dated July 5, 2006, Mr. Wagner provided this same chart to the Honorable Lolo M. Moliga, President of the American Samoa Senate, who has corresponded with you for some time about Governor Tulafono’s recent actions against Hawaiian Air. While neither you nor the Governor has directly asked for my assistance or consulted with me about how best to address the issues our people have with Hawaiian Air, I was copied on your correspondence of April 28, 2006 to Senate President Moliga and, on August 2, 2006, the Governor forwarded me a copy of his Executive Order.
Because this issue has now become a federal problem, the US Department of Transportation and the Federal Aviation Administration (FAA) have determined to keep my office abreast of any developments between your office and the office of the Governor. This said, I wish to focus my concerns specifically on pricing and I am hopeful that Hawaiian Air will provide a reasonable answer to my inquiry.
As I mentioned earlier, Mr. Wagner provided my office with a chart showing lowest fare round trips between Pago Pago and Honolulu at $793 and between Honolulu and LAX at $665. However, based on research (enclosed) done by my office which was taken directly from Hawaiian Air’s website as well as tripfox.com for other major airlines, the average cost of a round trip ticket on Hawaiian Air between Pago Pago and Honolulu is at $1,017 for a 7-day or no advance purchase while a flight on the same day from Honolulu to LAX on Hawaiian Air is priced at $429 for a no advance and $399 for a 7-day advance purchase. For a 14-day advance purchase, the cost for a roundtrip from Pago Pago is $892 while a 14-day advance purchase on Hawaiian Air to LAX is $339.
No matter what Hawaiian Air has to say about American Samoa being an international route, as far as I am concerned, I see no justification for an increase of over 100% difference in pricing on your routes. In fact, what I see is Hawaiian Air using our designation as an international route as a smoke screen to avoid the real issue of price gouging.
According to the US Department of Transportation, American Samoa is designated as an international route because planes fly through international airspace to get to American Samoa and American Samoa’s airspace is delegated to the US by the Civil Aviation Organization (ICAO). As you noted in your letter to Senate President Lolo, American Samoa’s designation as an international route only costs Hawaiian Air $500,000 per year which does not justify more than a 100% increase in your airfares especially considering that according to 2004 data Hawaiian Air receives from $530,000 to more than $1 million per year from the US Postal Service for delivering American Samoa’s mail.
While I have noted that Mr. Wagner states in his letter to Senate President Lolo that mainland flights average 90% full year-round whereas load factors on your Pago Pago route are far lower, may I respectfully point out that you would have a 90% full year-round load factor on Pago Pago if you also offered our people the same $429 airfares you offer our mainland counterparts flying roundtrip from Honolulu to LAX. Moreover, I would also like to suggest that Mr. Wagner’s explanation about full coach fares is a confusing concept given that Hawaiian Air prices for passengers flying from Pago Pago are set at $1017 for a 7-day and no advance purchase while you provide your passengers flying from Honolulu to LAX with a range of pricing possibilities for a 7-day and no advance purchase.
When compared to the costs of other major airlines flying from Honolulu to LAX, it appears that Hawaiian Air may be profiting from its Pago Pago route in order to undersell its competitors on the no advance purchase LAX route. For example, with no advance purchase, the cost for a round trip/coach ticket from Honolulu to LA on most other major airlines ranges from $800 to $1500 while on Hawaiian Air the ticket price averages $430. Even to the layman, one can only conclude that Hawaiian Air has to make up this loss of more than 100% by charging customers in other markets higher prices and it appears that this is what is happening to the people of American Samoa. It appears that Hawaiian Air is charging the people of American Samoa more than 100% more to compensate for charging no advance customers from LA to Honolulu 100% less than other major airlines.
To this end, I agree that enough is enough. It is time for Hawaiian Air to come to the negotiating table and explain itself. In so doing, I think Hawaiian Air must lay aside discussions about headsets, excess baggage, and change fees as these are lesser issues that are keeping us from dealing with the more important issue of pricing. The people of American Samoa deserve answers about your pricing and I am hopeful that you will provide these answers soon.
Faleomavaega concluded his letter by saying, “While I await your response, I will also be contacting the USDOT’s Acting Assistant Secretary for Aviation and International Affairs as well as the Assistant General Counsel for Aviation Enforcement and Proceedings to request a review of Hawaiian Air’s price structures in an effort to determine whether or not the only US carrier serving our Territory is acting in accordance with federal law.”