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Is Aloha Airlines Liquidation A Death Knell For The Airline Industry?

Aloha indeed. It’s time to wake up and smell the jet fuel. Regional carrier Aloha airlines announced their bankruptcy last week. Within days it moved from chapter 11, bankruptcy which is frequently used as the chance to get your financial house in order by numerous airlines, to chapter seven, liquidation. This signals the end for a small but significant carrier in Hawaii and the West and as of today it will suspend passenger service.

Just what does it mean for the rest of the industry?

Well the story of Aloha is long and complicated but in 2006 a leaner, meaner, cheaper competitor go! Airlines launched operations to compete with Aloha. They’ve been offering cheap tickets and operating at a loss ever since. Aloha was forced to lower their fares in order to keep up and…with jet fuel prices and costs being what they are for the airlines – it was impossible for Aloha to continue.

This points to the fragility of the airlines at this moment in time. But it also points to the greater differences between Aloha and the other major airlines operating today. While everyone seems to be talking about the desperation of the industry – I am of another mind. I’m impressed to see many of the airlines responding responsibly to their high operating costs and the astronomical cost of jet fuel by adjusting their business models. I think that marks a new trend in the aviation industry and one that will benefit all of the flying public in the end. Of course large airlines with domestic and international routes can pull out of a market that isn’t profitable. In such a price sensitive marketplace smaller, regional players are more vulnerable.

What does it mean if you’ve got a ticket with Aloha Airlines? United Airlines and other airlines serving Alohas markets are prepared to service previously ticketed passengers.

Only time will tell if Aloha can pull things together to continue serving passengers but I don’t expect this to launch a wave of liquidations. What will it mean for mergers? Now that’s another story entirely.

Mahalo.

amy_ziff

My name: Amy is my name, but I'll answer to Ame, Ames or Aimee.

How I earn my keep: My beat is travel, but my passion is collecting stories from people I meet on the road.

Hotel I could move into: Must I pick only one?! The Palacio Duhau a Park Hyatt in Buenos Aires tops my list. For the stunning restoration of the palace and tasteful new tower that create a thoughtful intersection of old and new. Every public and private space captivates. I'd move for the grand Alvear entry as much as for the manicured garden. For the wine and cheese tastings, the dulce de leche, the art gallery, the flower shop and for all the careful attention to detail that went into creating a hotel that is transcendent. If I were to pick a hotel that most felt like me, it would be The Inn at the Manor in the Cotswolds. Oh, I could definitely live there curled up with a book in a leather chair in the bar or outside among the English wildflowers. If I wanted to live in a land far away, the Ngoro Ngoro Crater Lodge would make a unique home with a view of the crater floor from every room (including the loo!), sumptuous beds, endless roses and the most unusual neighbors - massive water buffalo who won't bother you if you stay close to your Maori guide.

If I won the lottery, I'd live in: A historic farmhouse with an enormous barn and hundreds of acres tucked into a small town in New England or a Malibu beach house with stunning views and the surf just steps away. On second thought, winning the lottery means I could jet from coast to coast and enjoy them both.

Favorite way to get around: By foot. Whether in the city or country, I find the best way to get to know someplace is ambling around to discover and sample the distinct sights, sounds, smells, and tastes a place has to offer.

View that took my breath away: Looking toward the sky in Arusha and watching black and white Colobus monkeys scramble among the treetops, jumping from one tree to the next, floating through the sky like a primate version of Superman. Monkeys know how to have a good time!

My most beloved place in the whole world is: The place I visited last. What can I say? I'm fickle.

Follow me on twitter @amyziff

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