Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred H.C.R. No. 56 entitled:

begs leave to report as follows:

The purpose of this concurrent resolution is to request the Legislative Reference Bureau (LRB), in cooperation with the Department of Economics of the College of Social Sciences of the University of Hawaii (UH), to study the price-setting mechanisms and strategies of interisland air carriers.

The Department of Business, Economic Development, and Tourism (DBEDT) and LRB commented on this measure.

Concerns have been raised regarding the high cost of interisland travel, especially among Neighbor Island residents who often have to commute for employment purposes. Although suggestions have been made that the duopoly enjoyed by the two major commercial interisland airlines promotes excessive profit taking, the facts remain unclear. Your Committee finds that the only way to alleviate these concerns is to conduct a study of the airfare price-setting mechanisms of interisland air carriers.

Your Committee understands the concerns raised by LRB regarding its lack of expertise in conducting such a study. Accordingly, your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 56, as amended herein, and recommends that it be referred to the Committee on Consumer Protection and Commerce in the form attached hereto as H.C.R. No. 56, H.D. 1.