The fare war that started last month among airlines flying interisland routes appears to be boosting travel by local residents for the first time since the Sept. 11 attacks.

"People who haven't traveled for years are traveling," said Rachel Shimamoto, manager and vice president of Travel Ways Inc. "I have several customers whose relatives are getting married in Hilo or Maui. Because the fares are so low, they're not passing them up."

Phoenix-based go! airline touched off the price war when it opened for business in Hawai'i on June 9 with $39 one-way interisland tickets. Hawaiian Airlines and Aloha Airlines matched the fare, making flying affordable to residents who were grounded when prices climbed to $80 or more after the 2001 terrorist attacks.

Local airlines don't disclose the exact passenger counts on interisland flights; however, go! and Hawaiian said they were flying nearly full in June.

Go!, which only flies interisland routes, said its two jets were running 82.5 percent full last month. The carrier plans to add two more jets soon to keep up with demand.

Hawaiian's planes were 87 percent full in June, up from 86.3 percent a year earlier. That number includes Mainland flights.

Aloha declined to give numbers for June, but David Banmiller, Aloha's CEO, said the airline has benefited from its aggressive fare pricing. "We're having a very good summer," he said.

Jonathan Ornstein, chairman of go!'s parent, Mesa Air Group, said many of the airline's passengers haven't flown interisland in years because of high fares.

"If you lower the price, by definition demand has to go up," said Ornstein, adding that passengers have thanked him for cutting rates.

"It's not very common in the airline industry that you see people applaud you," he said.

Many local residents remember the days before Sept. 11 when they could buy an interisland ticket for as little as $50, breeze through security and catch the next flight. After the terrorist attacks, airlines were struggling with reduced traffic and raised prices on interisland routes. Later, high fuel costs helped keep fares up.

The typical hop from island to island for a family reunion, spontaneous shopping trip to Honolulu or weekend visit to Maui became rare.

While customers are enjoying the fare war now, it's too early to say how long it will last.

Hawaiian Airlines spokesman Keoni Wagner said he believes the increased passenger traffic from the low fares is temporary and questioned whether the interisland market will continue to grow over the long term.

Also clouding the outlook for the local airlines are fuel prices. With the renewed turmoil in the Middle East, the price of a barrel of oil has soared to more than $78 and is on its way to $100 a barrel, said Scott Hamilton, founder of Leeham Co. LLC, an Issaquah, Wash., aviation consulting firm.

The rising fuel prices have forced low-cost carriers like Southwest Airlines to raise prices and may cause weaker carriers into bankruptcy, Hamilton said.

Hawaiian and Aloha recently emerged from bankruptcy protection by cutting debt and expenses. But both airlines' recent financial results have been hurt by the post-Hurricane Katrina rise in fuel prices.

"When you give away the seats, a lot of people will fly," said Hamilton, but "they (the airlines) cannot be making money with those fares."

In addition to its $39 one-way fares, go! sold a limited number of tickets for $19.

Hawaiian matched the fare cuts while Aloha matched the first cut and offered free round-trip tickets to 1,000 customers who lined up at Aloha's airport ticket counters June 9.

Sheryl Reynolds of 'Aiea was one of the lucky few to get a free voucher from Aloha, which she planned to use to be reunited with her Neighbor Island relatives for the first time in five years.

Consumers are the clear winners in the fare war, said go! airlines' Ornstein.

"If there are 5 million travelers each year to the Neighbor Islands and the average fares have dropped from $80 to $40, then consumers are saving tens if not hundreds of millions of dollars a year," Ornstein said.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.