Hawaiian Airlines Stock Tumbles The Associated Press Monday, March 18, 2002; 7:38 PM HONOLULU –– Hawaiian Airlines' stock tumbled nearly 30 percent on Monday, the first day of trading since the announced collapse of its proposed merger with rival Aloha Airlines. Hawaiian's shares were down 28 percent, or $1.16 a share, to close at $2.99 in trading Monday on the American Stock Exchange. Aloha is closely held and its shares are not traded publicly. Lantz Stringham, a Portland, Ore.-based analyst who follows Hawaiian Airlines, said the drop could have been expected because part of what was built into the stock price was "the expectations for the combined carrier and its prospects for growth." Aloha and Hawaii unveiled the proposed merger in December, saying it was necessary for the financial health of both companies. A deadline of April 18 had been set for its completion. Those opposed to the merger of the state's only interisland air carriers said it would lead to higher prices and poorer service. But Stringham said the failure of the merger could still result in Hawaii being left with only one major interisland carrier. "It just doesn't seem like that market can support two competing carriers," he said. Had the merger gone through, he added, it would have created a carrier constrained initially by some regulatory rules governing fares and service. "Now we might see a situation where either Aloha or Hawaiian will have to exit the market or face the prospect of going bankrupt," he said. "Then you're left with one carrier anyway that is not constrained by regulatory requirements." Hawaiian chairman John W. Adams announced Saturday that the airline rejected a deadline extension requested by TurnWorks Inc., a Texas-based company working to merge the two carriers. Aloha Airlines issued a statement Sunday blaming the collapse on unacceptable demands made by Hawaiian. One change called for eliminating TurnWorks' role and economic interest in the merger, while another demanded Adams be named president and chief executive of the merged company, Aloha said. "Aloha could not accept Hawaiian's new proposal because in our judgment, it was not in the best interest of the state, the traveling public or Aloha's shareholders and employees," Aloha president and chief executive Glenn R. Zander said. Hawaiian spokesman Keoni Wagner said he would not discuss the specifics of Aloha's statement. "We don't necessarily agree with a lot of their characterizations of the negotiations, but we also are not going to discuss in public what are private discussions," Wagner said. Class-action lawsuits seeking to block the merger were filed in state court on behalf of several groups, including employees and shareholders. Additionally, Hawaii's three Republican state senators asked the U.S. Justice Department to block the deal. © 2002 The Associated Press