The Brancatelli File
THE GOOD AIRLINE
BY JOE BRANCATELLI
October 17, 2002 -- And now for something completely different: The Good Airline.
With all due respect to Southwest (which alone among the major carriers reported a third-quarter profit this week) and JetBlue (which has style and in-flight television and profits) and Midwest Express (which has that great 2x2 coach seating), Aloha Airlines is probably the nation's best carrier.
For most of the last 20 years, working in its little inter-island Hawaiian niche, Aloha has wowed travelers with everything from its ability to run an on-time operation to its willingness to serve you a beverage on a 20-minute flight. And most years, it has even made a few bucks. In other words, the very model of a modern American airline that almost no one in America knew.
In February, 2000, the same week JetBlue launched its inaugural flights, Aloha crossed its own final frontier and began flying from Hawaii to the mainland. Two and a half years later, JetBlue has justifiably garnered all the publicity and comparative bushels of profit. Yet Aloha is now wowing people on its growing network of mainland routes and it is still the very model of a modern American airline that almost no one in America knows.
"The mainland has been good for us," says Glenn Zander, the former chief executive of TWA who has run Aloha since 1994. "Our first mainland routes are mature now and the [passenger] loads are as good or better than they were before 9/11. We're making money on them and the new routes are doing nicely. And passengers really do seem to like how we operate."
From its launch on the Oakland-Honolulu route 32 months ago, Aloha has expanded to Burbank, John Wayne/Orange County, Las Vegas, Phoenix and Vancouver. It now also operates mainland flights from Kahului, Maui. And unlike its home-state competitor, Hawaiian Airlines, which has slashed its mainland service, Aloha is staying the mainland course.
And as I can report from several recent trips, Aloha's mainland service is almost a pleasure to fly. In fact, they've done what seems impossible: They transplanted the airline's legendary "aloha spirit" from short, inter-island flights to longer-haul mainland routes.
Aloha's in-flight product starts with the airline's new fleet of Boeing 737-700s. Efficient as they are for airlines to operate, the narrow-body workhorses are hardly a frequent flyer's favorite on five-plus-hour routes like those Aloha flies to the mainland. Aloha addresses some of the objections by offering seats with 32 inches of pitch in coach, an inch more than the big guys provide. ("The extra inch really makes a difference on a five-hour flight," Zander says.) Then Aloha lays on the perks, even in coach. There's a hand-towel service at the beginning of the flight, free Mai Tais and macadamia nuts at cocktail time, a full meal, free headsets for the movie and freshly baked cookies and milk before arrival.
"The whole service is paced so that the five hours go painlessly," Zander says. What he doesn't say: With just 112 coach seats on the 737s, flights tend to be quiet and cozy and more humane in scale.
The ride in the first-class cabin is excellent. The 12 chairs up front are covered in leather, extremely comfortable and outfitted with all the requisite head, foot and back accoutrements. Flight attendants are solicitous and the service is surprisingly anticipatory. Meals, designed by Hawaii celebrity chef Alan Wong, are tasty and as fresh as logistics allow.
It's not just the in-flight touches that make Aloha's mainland service stand out. The airline guessed right by choosing to fly to secondary airports rather than overcrowded behemoths such as San Francisco and Los Angeles. "We sell the convenience of the secondary airports," Zander says, "and we make it work financially because we've only got 124 seats to sell" on each flight.
Then there's the matter of the fares. On California-Honolulu routes, Aloha's standard restricted coach fares are under $400 roundtrip and its walk-up coach fare is just $339. That compares to United's $715 walk-up fare from San Francisco and American's price of $619 from Los Angeles. For first class, Aloha charges $584 one-way from Oakland or Burbank. United charges a staggering $1,461 from San Francisco and American demands $1,202 from Los Angeles.
But that's not all. Aloha keeps the spread between its lowest coach fares and its walk-up prices to a multiple of two. The spread at the majors is often a factor of four.
"It's insanity," Zander says of his competitor's pricing policies. "I literally have to tell you I do not know what they are thinking. But I do know customers don't like" the large disparity between the cheapest advance-purchase fares and the walk-up prices.
By comparison, Zander points out that Aloha's paid first-class load factor on its Oakland and Orange County routes is 70 percent. Major carriers rarely sell more than 10 percent of their first-class seats. "It shows you that people will pay a reasonable fare for a reasonable service."
Of course, all is not peachy in Paradise. Japanese tourism, a huge contributor to Hawaii's economy, disappeared after the September 11 terrorism attacks. That led to a plunge in traffic on inter-island routes for both Aloha and Hawaiian. Aloha lost $6.8 million in the second quarter. A controversial merger proposal with Hawaiian collapsed in acrimony. The Transportation Department recently approved an antitrust exemption so the carriers can coordinate schedules and reduce capacity, but profitability on inter-island routes remains a distant, long-term proposition.
Exacerbating the situation are the enhanced security regimens. The much-discussed "hassle factor" is real in Hawaii, where frequent inter-island business travelers must turn up 90 minutes before departure for flights that are in the air for only 20 or 30 minutes. As many as a third of Aloha's inter-island customers were being selected for special screening in the months immediately after 9/11 because their habits (flying one way on pre-paid flight coupons) flagged them for extra attention. The special-screening rate recently has dropped to 14 percent, but that remains almost twice as high as the mainland rate.
Still, it is on the mainland routes that Aloha is schooling the big guys. The service is better, the prices are fairer and Aloha is making money.
Like I said: The Good Airline.
This column originally appeared at JoeSentMe.com
Copyright © 1993-2004 by Joe Brancatelli. All rights reserved.