The Effects Of Far-away Actions

Dan Boylan
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Wednesday - April 09, 2008
| Del.icio.us

Sometimes I forget - as do we all, I suppose. I forget that Hawaii’s uniqueness knows limitations far more imperative than we like to acknowledge. I forget that long ago these lovely Islands were sucked into the maw of world history and a global economy and that our welfare depends so directly on that of everyone else.

It’s easy to do, and I admit that I’m particularly prone to it. It’s because of how I earn my keep. I spend every other semester teaching Hawaii’s unique history and every other week or so writing about its unique politics and society.

But then I - and my fellow citizens - are brought up short, and reminded that what happens far from our shores, what decisions are made an ocean and a continent or two away, can knock us flat on our keesters.


Consider last Tuesday’s Honolulu Star-Bulletin, Page C-1, the business section. On the left-hand side of the page, a series of short reports: under “Nation,” one headlined “Airlines Cut Profit Outlook Again.”

The first paragraph read: “The slowing U.S. economy and surging jet fuel prices have forced an international trade group to lower its outlook on airline profits for the second time in four months, with domestic carriers expected to take the biggest earnings hit.”

How big a hit? According to the International Air Transport Association, a massive one: “U.S. airlines profits are expected to fall $1.8 billion from an estimated $2.8 billion last year.” Worse, the IATA says that “this could easily turn into a net loss should the current economic environment deteriorate further.”

Of course, in some parts of the country, it already has - namely, our own part.

Go back to the Bulletin’s front page last Tuesday where the headline read “Aloha Means Goodbye: Thank You for Flying.” Three pages of the front section were devoted to the demise of 61-year-old Aloha Airlines. Indeed, from Sunday night when the announcement that Aloha was halting its passenger operations, both dailies and every television news broadcast in town covered little else.

All reports were of Aloha employees, travelers, legislators and the governor herself being “stunned” by the announcement.


Why? Over the past decade, both Hawaiian and Aloha airlines have gone through bankruptcy. Less than two weeks ago, Aloha announced that it was filing for bankruptcy for a second time.

That it shut down its operations less than a week later should have surprised no one. Add the decision of Arizona-based Mesa Airlines (whatever the legality of its methods) to enter Hawaii’s interisland market with the lower-case and lower-cost go!, the new demands on the world oil supplies from rapidly growing economies like China and India, and the decision by oil-producing countries from Latin America to the Middle East not to pump more of the black stuff, and Hawaii’s weakest airline was doomed.

At $100-plus per barrel of oil, neither Hawaiian nor Aloha nor go! could afford to fly a person anywhere in the Islands for $19 or $29 or $49 a ticket. No one. Hawaiian and go! could just afford to take the losses longer. Neither will be able to continue to fly people at those prices. Why? Again, see the April 1 Star-Bulletin, C-1.

And while you’re there, read the head just below it: “Auto Sales Drop in March.” GM announced a 19 percent drop, Ford 14 percent, Toyota 10 percent, Nissan 4 percent, Honda 3 percent.

Why?

“Demand for trucks and sports utility vehicles plummeted and consumers held back because of concerns about gas prices, the housing slump and tightening credit.”

I’m not certain how the economists define the word, but it sure looks to me as if we the country is in a recession - and that something worse may be in the offing.

And there’s no way these unique little islands are going to escape the consequences.

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