CEO Denies Fare War Is A Factor

In an effort to streamline operations and regain profitability, Hawaiian Airlines announced Thursday it will be laying off nearly 140 workers.

The positions being eliminated include 98 non-union employees, as well as 38 currently vacant positions. The move is projected to save the state's largest airline about $4 million annually.

"Clearly, the fare war is taking its toll," said Washington-based aviation industry analyst Scott Hamilton referring to the average ticket price of $39 for inter-island air travel. "Four million dollars in savings is hardly going to get the job done."

About half of the eliminations are on the US mainland. Affected employees are being offered severance packages and can apply for positions in other departments, according to the company.

None of the carrier's nearly 3,000 unionized workers were affected. Departments that will be losing workers include sales, marketing and customer service.

"The decision was difficult and painful and not taken lightly," Hawaiian CEO and President Mark Dunkerley said. "But it's important as a business that we make these decisions."

Dunkerley denied the layoffs had anything to do with the inter-island fare war. He told the Honolulu Adviser the cuts were "designed to flatten Hawaiian's management structure and adjust its resources to customers' needs."

The fare wars started about a year ago when Hawaiian and Aloha Airlines were forced to match low fares of new carrier go! Airlines, a unit of Phoenix-based Mesa Air Group, even though a study commissioned by Aloha said airlines lost money when charging less than $50 per ticket.

Dunkerley said the carrier is also in the process of outsourcing its information technology division to vendors in India. But that means including some 20 IT workers in the round of lay offs. Reservation call center operations have already been moved to an outside vendor in the Philippines.

"Even after this decrease, our workforce will be bigger than it was a year ago, and we will continue to grow," Dunkerley said.

"Decisions like these are always difficult and painful," Dunkerley said. "But this is part of an overall strategy to adapt our business to meet the needs of our customers so that we can continue to grow."

FMI: www.hawaiianair.com