Is it Fair to Say Goodbye to Aloha Airlines?
Is it Fair for Aloha Airlines to Say Goodbye?
Time for a final score on Aloha Airlines.
A few weeks ago on Scoreboard, we interviewed the CEO of Skybus Airlines, that offers cheap, no frills flights to second-tier airports. He said small airlines like his could soon be put out of business by high fuel prices.
Well, this week we got word that Aloha Airgroup is going out of business, after 62 months of providing puddle jumps between the Hawaiian Islands and service to the mainland. And fuel prices were singled out by management as one of the reasons Aloha died.
But Aloha also mentioned a price war that was being waged against them by Phoenix-based Mesa Air. Two months ago, Mesa started an air service called “go! ” — with a lowercase “g” — that went head-to-head against Aloha’s routes, offering fares at below cost. These cheap fares led to an operating loss for go! of more than USD 20 000 000 over the last 16 months. But because go! had a big daddy with deep pockets, it could digest the loss. Aloha, that was operating without much of a reserve, could not keep up with the price war, and they folded.
Was this fair play? Probably not. And maybe in better times, Aloha would have stuck it out and survived. But when times are tough, only the strong survive.
It’s Not Just Yankee Pride
Our good friends the Brits have been dumping on us this week. First, there was a piece in The Independent
saying because more Americans are on food stamps, we’re going into
a 1930s-type Depression. Then there was an patronizing piece in the Financial Times about how weak our economic system is.
But before we let the Brits get too cocky about how much better off they are than we, let’s get a serious reality check.
Americans
have it much better off than they do. This is not just Yankee pride
talking. Everything in Britain is at least twice as expensive as it is
here. And their salaries are quite often lower than ours. So they make
less and pay a lot more.
And it shows. A couple of months
back I lived in London for a days while my wife was recovering from a
stroke. The hospital–one of the best in London–was filthy. It
constantly reeked of human waste. Patients were getting drug-resistant
infections at a rate far greater than ours. I had to bring in my own
alcohol pads to wipe down my wife’s bed every morning. The nurses and
doctors were wonderful people, but they were dealing with a broke system. Nurses had to keep pocket screwdrivers around for the
constant equipment failures, drugs available in the States weren’t
available there, and the rehab facilities were pathetic throw backs to
the 1950s.
Outside the hospitals — if you go into any
middle-class flat in London, the first thing you’ll notice is how much
smaller they are, how cold they are and how lots of fewer things it
contains. I like the Brits. But they can be pretty smug at times,
particularly when they’re comparing their country with ours.
So
the next time a Brit lectures you about how bad things are in the
States, tell them to live in one of our homes for a week. That ought to
change their mind.
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