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
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
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."