The Hidden Law That Makes Hawai‘i Flights More Expensive — and Keeps the Islands From Becoming a Global Hub
The Law No One Talks About
by Ron Skates
When people in Hawai‘i complain about airfare, most blame it on distance, fuel costs, or airline “price gouging.” However, the true culprit is something you’ve probably never heard of: a federal law known as ‘aviation cabotage’.
This law, buried in the U.S. Code (49 U.S.C. §41703), says foreign airlines cannot sell tickets between two U.S. cities — even if their planes already fly that route.¹
That means if Air New Zealand flies Auckland → Honolulu → Los Angeles, it can’t sell you a seat just from Honolulu to L.A. Only U.S. carriers like Hawaiian, United, or Delta can. This shuts Hawai‘i out from becoming the natural Pacific hub it could be and forces travelers to pay higher prices.
What “Cabotage” Means in Plain English
The term originates from ancient maritime shipping regulations. In aviation, it means a foreign airline cannot pick up passengers in one U.S. city and drop them off in another.
Think of it this way:
- If you’re in Honolulu, you can’t hop on a Quantas plane going to L.A. — even though it stops in Hawai‘i anyway.
- Those empty seats fly over the ocean unused, while you’re stuck paying $400 or more for a domestic ticket.
The rule is meant to “protect” U.S. airlines, but in practice, it protects profits and blocks competition.
Why Hawai‘i Loses Out
Hawai‘i’s mid-Pacific location is perfect for an air hub like Dubai or Singapore. If cabotage didn’t exist, foreign airlines could:
- Bring travelers from Australia, New Zealand, and the South Pacific into Honolulu.
- Let them connect on the same flight to the mainland.
- Sell cheaper “inter-island” tickets on the way.
Instead, airlines fly right over Hawai‘i and land directly in Los Angeles or San Francisco. Hawai‘i is skipped, not because of geography, but because of politics.
How It Hits Families in the Wallet
Here’s what the lack of competition looks like in your bank account:
Average Round-Trip Fares (2025)
- Route: Honolulu → Maui -- $148 in September (low season); $169+ summer high season³
- Route: Honolulu → Los Angeles -- $279 in February; $510+ in peak summer⁴
Yes, you might find the occasional one-way deal under $60 — but that’s rare. Most families traveling inter-island or to the mainland pay far more.
For a family of four heading to California for summer vacation, that’s easily $2,000 just in airfare. And unlike the mainland, Hawai‘i families can’t drive or take a train as alternatives.
The Bigger Price: Missed Jobs and Opportunities
The economic cost goes well beyond expensive tickets:
- No Airline Hub = No Headquarters Jobs - With no transfer traffic, airlines don’t base operations here. That means fewer mechanics, gate staff, IT workers, and executives.
- Brain Drain - Hawai‘i’s best aviation talent — pilots, technicians, and logistics experts — leave for jobs in California or Texas. UHERO and other economists have repeatedly flagged “outmigration” as a major threat to Hawai‘i’s future workforce.⁵
- Businesses Stay Away - Companies think twice about setting up regional offices in Hawai‘i because flights are too costly and connections too limited. If Hawai‘i were an open hub, it could compete with Los Angeles, Seattle, or even Tokyo as a business gateway.
- Tourism Takes a Hit - Tourists from Asia could stop over in Honolulu on their way to the mainland, adding millions to the local economy. Instead, they bypass the islands.
In short, cabotage doesn’t just cost families a few hundred dollars on tickets — it costs Hawai‘i entire industries.
Why It Still Exists
If this law is so damaging, why hasn’t it been fixed? The answer is politics.
- Big airlines and unions want the law kept in place because it protects their share of the market.
- Lawmakers — including Hawai‘i’s own congressional delegation — rarely challenge it, since donations and endorsements come from the airline industry.
- It’s easier to blame “distance” or “tourism dependence” than to confront a federal rule that has been in place for decades.
Global Lessons We Ignore
Countries that opened their skies transformed their economies:
- Singapore’s Changi Airport is one of the busiest in the world, feeding into finance, technology, and trade.
- Dubai built Emirates Airlines into a global giant by allowing foreign carriers and connections.
Hawai‘i is locked out because of one outdated law.
The Real Cost of Cabotage
It’s not just about ticket prices. Cabotage is like a hidden wall that:
- Blocks Hawai‘i from becoming a business and logistics hub.
- Drains talent and jobs to the mainland.
- Forces families to pay hundreds more per trip.
- Keeps Hawai‘i dependent on tourism while closing off better economic futures.
Sources & Footnotes
- U.S. Code: 49 U.S.C. §41703 – restriction on foreign cabotage.
- U.S. DOT: Open Skies Agreements do not grant domestic cabotage rights (DOT International Aviation Rules).
- Kayak, “HNL–OGG Average Fares,” Sept 2025 — round-trip avg. $148; peak summer $169+.
- Kayak, “HNL–LAX Average Fares,” Feb 2025 — $279; summer $510+.
- University of Hawai‘i Economic Research Organization (UHERO), State Forecast Update: Hawai‘i’s Economy Remains Fragile, Jan 2, 2024 — outmigration of working-age population is a long-term risk.
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