As the first wave of fundraising passes, signs promoting candidates are popping up all over the state, prompting us to check the status of the candidates who have pulled papers or filed for office, as of mid-April 2024. You can find a comprehensive list of all candidates who have pulled papers or have filed at the Office of Elections of the State of Hawaii, which is updated, generally, every Friday.

As notices have slowed since February, PHwSF shares observations on a select list of candidates that have shown interest in congressional and state legislative races.

Before going further, a clarification: There are two steps for a candidate to formally run for office. The first one is in pulling papers, to run. This does not mean that they will run for office, but it does show interest by a person to potentially be a candidate. The second is when they actually “file”. That means they have gone down to the elections office of their island, and formally filed to be on the ballot.

Typically, these are events in a campaign that bring out the supporters and maybe even get the media to interview the newly-filed candidate.

So, in this piece, the candidate’s designation of “pulled papers” or “filed” will be noted.

First, let’s start with the congressional. 

Having run against Brian Schatz the last time, Bob McDermott has pulled papers, this time to run against Mazie Hirono, who also just pulled papers, for the US Senate seat from Hawaii. If he formally files in the next couple of months, let’s see if he does more than have his name on the ballot, like he did when he ran against Brian Schatz for the other Senate congressional seat, two years ago.

Now let’s move on to the state legislative races, starting with the State Senate. 

The only State Senate race that could be spicy is Senate District 22 – generally the entire Waianae Coast from north of Kapolei to Kaena Point. This district was long held by Senator Maile Shimabukuro, who is stepping down and stepping aside from electoral politics. She has endorsed current House member Cedric Gates, from Waianae. 

Gates has pulled papers but has not formally filed them as of this writing.

This district almost flipped to Republicans with Samantha DeCorte coming within 72 votes of taking Maile out in 2022. DeCorte has pulled papers. Her potential opponent, Teri Kia Savainaea, has formally filed for the race.

With the House of Representatives, there is more activity, and more contests to watch, becoming an area that the savvy political pundit should watch. Here are the PHwSF observations. 

– Mark Nakashima pulled papers for his District 1 office in the Big Island. Most likely he will continue to advocate for the legalization of raw milk. So far no one else has pulled or filed papers.

– House District 19 – Ola Souza has pulled papers and may try again to run for District 19 against incumbent Mark Hashem, who has also just pulled papers. But this time Souza may have a Republican competitor named Theresa Texeira, who has also just pulled papers. The last time Souza went up against Hashem, he beat her 68.3% to her 31.7% showing. 

– With Scott Nishimoto running for a seat on the Honolulu City Council – only pulling papers so far, his seat in District 23 may be up for grabs. Already there is a race on with Ikaika Olds pulling papers and putting out signs, out of the gate. Other potential candidates pulling papers include Ian Ross, Chair of the Makiki Neighborhood Board, and Pat McCain former Deputy Director of the Department of Transportation, State of Hawaii. All three are listed as Democrats. Without a candidate filing as a Republican, the primary could be the “winner take all” race for this seat. History suggests that recruiting a Republican to run for this district has been difficult.

– It looks like both incumbent Scott Saiki and challenger Kim Coco Iwamoto are looking to either re-up (for Saiki) or upset (in the case of Iwamoto) for the House 25 seat. Iwamoto got close the last couple of times to Saiki in her challenges. Already both have their signs up in the neighborhood and, with formal filings by both, round 3 may begin (they have just pulled papers as of this writing).

– While both have just pulled papers and not filed, the scuttlebutt in town suggests that this will be what voters will see in July/August on the ballot for District 37,– Tricia La Chica, the incumbent, versus the next generation of a Hawaii political dynasty, Daniel Ken Inouye Jr. An observer of politics recently posed this question about this race, “how do you slay a baby dragon?” With my dumbfounded response, the observer said “Yup, exactly”. Now that does not mean La Chica does not have an answer to this, it could be her ground game may be the key, but she may know that in political circles, this is the level of game she will need to reach to keep her seat. 

– Continuing with a focus on Mililani, the son of a Social Media master – Ryan Ozawa (remember his Lost podcasts?) has pulled papers for House District 38 against Republican incumbent Lauren Cheape Matsumoto, also just pulling papers, so far. The question will be whether Alexander Ozawa will be able to overcome the level of goodwill that Lauren currently has in the district. Or does the district go with a new young face, and flipping parties in the district to Democrat? Another Republican, Michael Kenney has also pulled papers for that race.

– Finally, two years ago, District 39 flipped from Democrat to Republican when Elijah Pierick won against Corey Rosenlee in a close race. However, Pierick actions in office have been controversial, which may affect his re-election. On the other hand, Rosenlee will have to beat Kevin Wilson and Reginald Garcia to win the Democratic ticket. All three have just pulled papers and not filed, yet, so there may be some changes in this race.

The Republican party’s position in the House and Senate was strengthened by a small red wave that flipped seats across Oahu’s west side, including District 39. This upcoming election will be a crucial test to see if the Republicans can maintain, or even increase, their stronghold against the Democrats.

One key to either the Senate or House races will be who gets the real money, from rich backers to both win their primaries and then their general contests. The funds will be out there if the list of unopposed candidates’ stay’s long.

As to the rest of the races, there are, at publication time, about 23 candidates that have either pulled papers or formally filed, with no opponents. The deadline for filing the candidate applications is June 4, 2024. It is expected between now and then, that should change. However, if no challengers emerge, the solo candidate will automatically win in the primary election, scheduled for Saturday, August 10. 

It is worth noting that Hawaii is a mail-in state, which means that ballots will be sent out by the Office of Elections starting from Tuesday, July 23. This gives voters time to complete and submit their ballots before the election day.

As a reader of this blog, one may have noticed that the post which went up on the 13^th of April had been taken down the next day. If you were one of the select people I reached out to and sent a link to, you would have gotten a note from me that said that I pulled the article down.

The article was entitled “A first look at ‘24”. Based on the record at the State of Hawaii Office of Elections, it was about the initial notices by candidates that may potentially run for elected office in Hawaii.

About 24 hours after I posted the piece, I got a note from a fellow pundit whom I respect, saying that the piece was full of errors, highlighting a few of them as factual errors among other errors. Choosing not to fix it online I took it down

And indeed, it was full of errors. Some of it had to do with the categorization of the candidate, whether they have “pulled papers” or “filed” to be on the ballot. I didn’t delineate that in the first piece. Secondly, I misassigned a candidate from one race to another.

And the errors went on and on.

But instead of giving up on the piece, I felt its important enough to salvage. So, over the last 2 days, I have been rebuilding it, making sure it’s factual and, this time, having another pundit read it over just to be sure I am correct.

To those who took the time to let me know of the errors thank you. To those who read over my drafts and gave me ideas to make it even better, I thank you too. The effort to “get it right” is always challenging, especially with data-rich pieces like this. This one was no exception, and even more due to the volume of data I needed to get right.

But for my first effort, I will be straight with you. – I wrote a sloppy piece that should have never seen the light of “e-day” (when it gets published on the website). And I am happy that I got called out, forcing me to take it down.

The piece is now re-written and will be published on the website tomorrow night, Wednesday, the 17^th of April. Should there be more factual errors, please let me know through the response page on the website.

As for the points of view I have made on races, those will stay. After all, it is a political column which I call as I see it. I’ll also write about other races such as specific county council and mayoral races in my next piece around the 27^th of April. And then I’ll do it all again after the filing deadline in June, to see who will be on the ballots.

But I’ll try not to be sloppy, remembering the lessons I learned when I worked at a newspaper (Pacific Business News), and regain your trust that what I present is factually correct.

As the news came down that Alaska and Hawaiian Airlines have signed an agreement with the Department of Justice to not consummate their merger until 90 days after the last request for information by the Dept, it was about time for PHwSF to return to this subject, continuing its series looking at the merger.

You can read the other parts of this series, talking about the merger itself and the government’s reaction to it; who owns Hawaiian now; how the airline may benefit from a pre-check plan between Japan and Hawaii; and a “what if”, part 1, of whether Hawaiian could have been like Alaska Airlines.

This fifth article, “part 2”, continues examining a hypothetical “what does plan B look like” if the DOJ says no to the merger, forcing Hawaiian to figure out how to expand, on its own, and how much it would cost to do that. For this examination, we’ll look at how much it would cost Hawaiian to buy out another airline that services the West Coast, like how Alaska bought Jet America and Horizon in the 80s.

Just to refresh from part 1, it was determined that to set up a new hub in a city on the mainland, most likely it would be someplace like Las Vegas, and to just set up the beachhead would cost about $1 billion, with much more in the out years to just keep their dominance.

But what if Hawaiian didn’t have time to set up a full-blown mainland operation that is like that of Alaska’s dominance out of Seattle? Then the second-best way to expand is to buy out an airline company that already operates in the region and integrate their operations and services to Hawaiian, to create that position in the mainland, relatively quickly.

Let’s see how that plays out.

BUYING OUT AN AIRLINE is not a simple process, and it gets more complicated the larger the buyout is. Anyone who has been an observer of airline mergers over the last 15 years has seen relatively smooth mergers (Delta with Northwest) and ones that just felt like a train wreck every time you looked at it (United and Continental). The buyout of any one airline by Hawaiian, in this scenario, would face similar challenges of merging culture, operational style, equipment synergy, and overall financing of the transaction.

Alaska Airlines, in its history of expansion out of Seattle, has seemingly had a green thumb when it comes to the integration of airlines during its expansion. Their first big purchase in the 80ʻs was that of Northwest regional airline Horizon Air for $85 million ($266 million in 2024 dollars) and of course the buyout of Virgin America for $4 billion in the mid 2010ʻs. Smaller purchases they made of Jet America in 1987 for $14 million gave Alaska the ability to grow its market share while keeping the airline together as it grew.

Not an easy feat.

So, if Hawaiian were to target someone to buy out, who would it be, if we were examining setting up a hub on the mainland, and starting mainland-only services? In research, PHwSF has come up with this list of potentials,

• Allegiant Air: Based out of Las Vegas, NV. With about 126 planes flying to over 100 destinations, its business model is more of a “travel club” with full package tours and travel attached to air transportation. It’s currently revamping its fleet, with the purchase of new 737-MAX planes.
• Avelo Airlines: Headquartered in Houston, TX, it was founded by a former United Continental executive who took over a couple of smaller operators to form Avelo, with about 1,000 employees currently. Flies 737-800 planes, it has a presence on the West and East Coasts.
• And, finally, to include “all possibilities”, we include a buyout by Hawaiian of Alaska Airlines. And we already know what Alaska brings to the table in that transaction.

Now, let us see what it would take for Hawaiian to buy each of them, hypothesizing that Hawaiian can obtain financing at the levels of these purchases, and even more with post-purchase integration and adjustments.

AVELO: In comparison to the other options presented here, Avelo would come relatively inexpensive for Hawaiian and its investors. Being a young airline, the range that Hawaiian could pay depends a great deal on both the cost of the durable assets of the airline and its financial “goodwill”. Currently estimates place a purchase price at between $500 million and $3 billion. For that purchase, Hawaiian would get an airline that has West Coast hubs in Seattle and Los Angeles that could be expanded upon with a ready-made fleet of planes at least to start.

ALLEGIANT: As the size of the airline to acquire gets bigger, so does the price tag. Currently, it would be between $3 to 10 billion to purchase Allegiant outright by Hawaiian. For that price, they’ll get a lot more employees, and a lot more landing slots in places all over the country, including on the West Coast. Their corporate culture of transporting passengers for leisure would dovetail with Hawaiian’s style. Furthermore, the operation that they have currently is profitable – something which could help Hawaiian should this purchase be needed to fund integration and further expansion. But they would need to be sure that they don’t “kill the goose that lays the golden eggs”.

And, finally, while much more fantastical than any other option, a buyout of ALASKA by Hawaiian could “technically” still happen, but the price tag would be huge. The estimate right now to purchase Alaska outright is in the range of $15 to $40 billion, with any figure no doubt leaning more toward the high end, than the low. But as with size meaning more money, it also means higher costs associated with integration and adjustments that the airline would need to face as they get bought out. Also, like with what happened in the 80s with leveraged buyouts by smaller entities of larger ones, the debt load that Hawaiian would carry on this would make the current $1 billion seem quite small, in comparison.

In an analysis of who else could be purchased, PHwSF also noted these two carriers that are much smaller than Hawaiian that could help with a west coast expansion, with a lot of post-merger money going to expansion, JSX, and Boutique Air. Both would have smaller price tags but both would also have much less of a footprint than the three listed above. While the purchase price might be lower, investors would need to commit relatively big money to fully utilize the network and people involved with these airlines, including recertifying them for larger planes.

In the end, it would be expensive for Hawaiian Airlines to expand by purchasing another airline. However, there are other options available to them. For example, they could make a partial purchase of an airline and gain a seat on the board, allowing them to access some of the markets where that airline flies. Another less expensive option is to form strategic partnerships with other airlines. The Alaska buyout of Hawaiian Airlines seems to be a full-blown strategic partnership with Alaska owning the airline outright, all for one seemingly low price.

Ultimately, the Department of Justice will determine if the buyout by Alaska, or any one of the potential “plan B’s” will come to fruition.

Photo Credits 
Avelo Airlines: "N803XT Boeing 737-8F2 Avelo Air Fort Lauderdale 19.1.23" by Colin Cooke Photo is licensed under CC BY-SA 2.0.
Allegiant Airlines: "N320NV Allegiant Air Airbus A319-111 s/n 2514" by TDelCoro is licensed under CC BY-SA 2.0.