Aloha also means goodbye. Forever. The troubled little Hawaiian carrier was too sick to be healed by Dave Banmiller, a well-regarded airline doctor, and shut down the other day, for good. A day or two later, a little airline that did a lot of charter flights, Champion Air, said it too would shut down. Both cited the intolerably high cost of fuel, but both are victims of changing airline business models. And both closures demonstrate the rapidly tightening credit markets and the dwindling interest of private investors for dabbling in airlines.
Out in Hawaii, Aloha Airlines had competed in an increasingly crowded marketplace, one in which a new, lower-cost rival was able to undercut it on its traditional local routes while increased competition on its transpacific routes to the mainland kept fares down – enough so that it could not recoup fuel costs. Banmiller, brought in by Aloha’s private equity owners to take it out of its first bankruptcy reorganization just two years ago, singled out an island newcomer for most of the blame: Jon Ornstein’s Mesa Air Group, which started a very low-cost local carrier he dubbed go!; Banmiller said that go! was the true culprit: “unfair competition has succeeded in driving us out of business,” he said, without using an exclamation mark.
Aloha had sued Mesa, claiming it misappropriated trade secrets when it looked at Aloha’s books during the bankruptcy, under the pretext of contemplating a purchase. Instead, the lawsuit says, Mesa started its own operation that undercut Aloha. That led to Aloha's second bankruptcy, filed March 20, and one from which it will not emerge.
In far frostier climes, Champion blamed another airline, in this case one of its major customers. Northwest, it said, had stopped using with Champion’s charters for its MLT vacation and holiday charter business, and in any case, oil prices had made it impossible for Champion to compete with its fleet of gas-slurping Boeing 727 tri-jets. “Our business model is no longer viable in a world of $110 oil, a struggling economy, and rapidly changing demand for our service,” Champion president and chief executive Lee Steele said in announcing that the carrier would shut down on May 31. Like Aloha, it had looked for new investors or for increased funding from its current owners- who are its managers. While Champion's exit from the industry will likely leave few ripples, Aloha had a place in the culture of the Islands. Some in Hawaii had seen Aloha as the 'airline of the common people' because it was founded by ethnic Hawaiians and had not been run by 'Mainlanders.'