Travel agency
fights ATM coupons

The state will hear
Regal Travel's complaint against
Bank of Hawaii and
Hawaiian Airlines

By Russ Lynch
Star-Bulletin

Bank of Hawaii should quit selling Hawaiian Airlines interisland flight coupons through its automated teller machines, says a leading Hawaii travel agency.

A state hearings officer with the Department of Commerce and Consumer Affairs on Sept. 23 is scheduled to listen to Regal Travel Inc.'s complaint that the bank's unique airline coupon dispensing system makes it a travel agent, something banks are not allowed to be under federal law.

"Our position has always been that Bank of Hawaii should follow the same law that every other travel agency has to do," said Herb Docker, Regal Travel's president.

The bank should pay the fee and register as a travel agent, he said. The trouble with that, according to the American Society of Travel Agents, is that banks are not allowed to sell travel.

Bank of Hawaii and Hawaiian Airlines, however, contend the bank is not selling the tickets, just distributing them for a fee paid by the airline.

The ATM coupon sales began in March. Holders of appropriate credit cards or Bank of Hawaii ATM cards can buy the coupons through Bankoh BankMachines for $51.50 each. That's the same price that each coupon of a book of six sells for if purchased at a Hawaiian Airlines ticket office.

Hawaiian says some travel agents are selling the coupons for less than that because they can buy them from wholesalers who get them at discounted prices. Hawaiian Airlines coupons are available through travel agents and $46 or $47 each, said airline spokesman Keoni Wagner.

Either way, coupons do provide a cheaper alternative to individual tickets purchased at the airline counters, where the cheapest price for Hawaii residents is $55 for a one-way ticket.

But Regal contends that the ATM business belongs to the travel agents who would have a chance to earn some commissions.

"It is no different than if the bank were using its human (as opposed to mechanical) tellers," says a legal memorandum filed on Regal's behalf on July 27. "This is a transparent attempt to avoid compliance with the Travel Agencies Act," says the memorandum, written by Honolulu attorney William W. Saunders Jr.

Bank of Hawaii says all it is doing is storing the coupons for the airline and making them available through its machines, Saunders' statement said.

But that makes it no different from some "street-corner huckster" allowing his "rented" pocket to hold the coupons and "graciously (but for a commission) transmitting those funds to the airline as part of his bill-paying service," the memorandum said.

Bank of Hawaii spokeswoman Linda Chinn said the bank is not a travel agent.

"They are not tickets. They are coupons. The coupons are owned by Hawaiian Airlines. Reservations are made by Hawaiian Airlines. The price is set by Hawaiian Airlines. At no time is Bank of Hawaii assuming any ownership role with respect to these tickets," Chinn said.

She said the bank's role is equivalent to leasing space to Hawaiian in its ATMs, just like leasing part of a ticket counter.

Paul Casey, Hawaiian Airlines' president and CEO, said last week that the ATM coupons are selling well but they're not taking business away from travel agents.

If anything, he said, the ATM sales are just cutting into Hawaiian's ticket counter sales.