Airlines Nosediving One by One

For years now--probably since after the 9/11 attacks, understandably--I've noticed the media paying a lot of attention to the troubles of the airline industry. People's fear of flying, the popularity of e-tickets, and the trimming of airline's costs (from eliminating meal service to reducing baggage limits) are just a few issues that have dominated headlines. More recently, articles discussing the soaring costs of jet fuel have been largely unavoidable.

But in the last few weeks, I've really been stunned by the multitude of airline death blows. Just today, Alitalia swerved closer to bankruptcy as talks with Air France/KLM folded, while ATA abruptly shut down, stranding thousands of passengers and firing over 2,000 employees.

On Monday, Hawaii's Aloha Airlines said farewell to its last passenger; the airline shut down its 61-year-old operations by letting go of 2,000 to 4,000 employees. And last month, Delta announced that it would offer buyouts to over half its workforce, a whopping 30,000 employees, and United said it would ground about 15 to 20 jets, 4% of its fleet.

While industry experts claim most larger carriers are safe, for now, from closing shop, they expect to see a stream of smaller operations to continue going under. This is a really serious trend that seems to be coming to a head. Tens of thousands of jobs have already been lost, with more to come.Ê

$ The Most Expensive States for Business $

For the second year in a row, Hawaii, New York, and Alaska (consecutively) are the most expensive states for businesses. According to the Milken Institute Cost of Doing Business Index--which measures wage costs, taxes, electricity costs, and real estate costs for industrial and office space--all three states increased their overall costs, especially electric.

South Dakota maintained its position as the least expensive state for business, followed by Iowa, North Dakota, and Nebraska.

Click for the official press release: PressRelease_CODB_FINAL.doc

Hula Hoops

Harry Eager, a staff writer for the Maui News, asked an interesting question last week: "Is development of commercial space to dicey, pricey?" In the limited, in-demand space on Maui, the question fits (with not much space leftover).

In his review of a survey done by Colliers Monroe Friedlander, a commercial real estate broker, manager, and consultant, he states that labor shortages and delays in permits and government supervision process is heightening the risk of developing. A senior manager at the agency estimates that construction costs for a low-rise commercial building, the most popular on the island, are about $300 per square foot, not counting land.

MSN reported that increasing housing and energy costs in the Hawaiian islands are expected to drive local prices up 4.5% in 2007. Construction authorizations dropped in the first quarter of this year, however construction jobs increased due to development of existing permits.

Marty Kenny, the Collier's Maui broker, compared the commercial market in Maui to that of Manhattan, suggesting that mixed-use developments were the most viable option for the island. The mixed-use model (with retail on street level, and offices and/or residential space on the upper floors) would serve the 140,000 residents, and upwards of 40,000 tourists who visit Maui each day during the busy season.

Maui is the second largest island in Hawaii, at 727 square miles. Its main industries are tourism, agriculture (sugarcane and pineapple), and the high tech industry. The development of Maui's land, which is known for natural beauty and, is controversial. Between 1970 and 2005, the population of Maui has more than tripled, causing a strain on the island's infrastructure.

Sources: The Maui News, MSN Money