Wednesday, August 01, 2007


Senator Lolo M Moliga took a step in the right direction with his push for a waiver of federal cabotage laws for the people of American Samoa . This will allow foreign carriers to compete with Hawaiian Airlines for the transportation of either persons, cargo or both between American Samoa and another US port. To assist the senator and those who will follow his wisdom on this, the following are a few facts that we need to reemphasize as we pursue more freedom in our airline market.

We need to remind the federal government that they once regulated the entire U.S. airline market on premise that competition itself was destructive and disadvantageous to everyone. Once the Civil Aeronautics Board was abolished in 1978, the only ones who found themselves at a disadvantage were those companies who had no business being in the airline business in the first place. Open competition allowed for more efficiencies, which led to more frequency of flights and lower prices throughtout the U.S. at the cost of closing down incompetent and inefficient firms.

Competition, or even the threat of it, does something government cannot effectively mandate to the people, to businesses. Competition motivates a company to find new ways of doing business, cutting costs, upgrading services and improving the quality of its products. There is no way one can stand on the outside of a company and know what is possible or impossible for it to do. We can only know that as long as it competes openly for its profits, that it has every incentive to do everything possible to protect its profit margins from competitors.

HAL will likely have to cut costs when our skies open up. They can do so through automation and outsourcing of some of its functions. These costs will have to be passed on to the consumer if HAL wants their airfares to be competitive with or be a discouragement to entry for potential competitors.

The concern then becomes the welfare of HAL employees who may lose their jobs in this cost cutting process. What we need to remember at this point is that cost cutting at HAL and the resulting lowering of airfares will save a lot of people a lot of money. This will achieve exactly the kind of benefits that proponents of price controls have used to justify their methods. Businesses in American Samoa will have more money to invest and expand, and people will have more to spend on their children’s education, healthcare and recreation. More jobs will be created as we get rid of whatever inefficiencies are holding us back. If it is “greed” that is evil, then there is nothing more “greedy” than employees or employers who demand that the rest of society be held hostage in order for them to retain jobs that are fast becoming obsolete, inefficient and a drain on our economy.

On this issue, we will have the moral high ground because we are not trying to control HAL prices or its property. They can charge whatever they want and provide terrible service if they like, but all we’re asking this time around, is to be given the freedom to choose a lower airfare or better service from somebody else, foreign or domestic.

And let HAL try to defend some imagined right to a government monopoly on our route. Let them try to articulate that they deserve this monopoly from foreign competition, not on its ability or merits, but on its need to maximize profits without the threat of competition.

And let the DOT rule as such, and then Governor Togiola can point to this so-called “special relationship” with the United States and say that this is not about promoting freedom for the people under its protection but “colonial rule”. That this is not about freedom of choice, but bribery and coercion by the welfare state to comply with the governmental advantages for a private company being provided for at our expense. Let the federal government make that clear in their ruling.

Nevertheless, it’s a crying shame that Faleomavaega chooses to not make our case with Senator Inouye. The congressman does not hold an office where he can afford to pay “respect” to anyone other than his constituents who put him in office.


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