It wasn't long ago that Ken Ng could book a business trip to Maui at the last minute and pay less than $40 for the flight.

But with ticket prices about double what they were a decade ago, the 62-year-old financial consultant has cut his business trips to the Neighbor Islands from once a month to once every two or three months.

"I'm trying to serve my clients, but it becomes a losing proposition when the costs are so high," said Ng. "These days, there's less to chose from, the flights are more crowded and the costs are double."

Unfortunately for travelers, the prices are likely to continue to rise as Hawai'i's two largest interisland airlines struggle to earn profits.

Hawaiian Airlines and Aloha Airlines combined have suffered more than $283 million in net losses since 2000, according to figures provided by the carriers to the U.S. Department of Transportation. For four of the past five years, the two carriers have lost money.

Those losses came at a time when travel between O'ahu and the Neighbor Islands is down as a result of increased direct flights from the Mainland and growth in Neighbor Island retail options, so that residents no longer have to fly to O'ahu to shop at stores such as Costco and Home Depot.

For Hawai'i consumers, who have come to depend on the local carriers as an interisland highway of sorts, the airlines' bleak financial outlook is painful.

"Locals are the ones who are going to be stuck with the highest fares," said Scott Hamilton, founder of Leeham Co., a Washington-based airline consulting firm. "I don't see how they (Hawaiian and Aloha) can make a profit on the interisland market, especially at today's fuel prices."

While it's difficult to predict how high fares will rise, airline-industry experts say higher fares are here to stay.

Michael Boyd, president of Denver-based airline consultancy The Boyd Group, pointed to rising jet fuel costs, which have soared from about 75 cents a gallon to about $2.10 gallon during the past five years. According to Boyd, the higher fuel costs are particularly hard on the short interisland flights, which are less fuel-efficient and require more maintenance than Mainland flights.

Last year, Hawaiian's fuel costs jumped nearly 40 percent to about $135.5 million while Aloha's fuel expenses leaped nearly 50 percent to $81.3 million, according to figures compiled by the Department of Transportation. Fuel cost now accounts for about 20 percent of expenses at the two airlines, making it the companies' second-largest cost item behind employee wages and benefits.

"The higher fuel prices are killing a lot of airlines, but they're particularly onerous to Hawaiian and Aloha," said Boyd. "The interisland market is never going to be a growth industry."

Barbara Beyer, president of Virginia-based airline consultant Avmark Inc., says Hawai'i's carriers charge too little to begin with. Beyer, who served as a consultant to Hawaiian during the 1980s, compared the interisland business to the shuttle services that run between New York, Boston and Washington, D.C.

Typically, one-way fares in those markets go as high as $250, which is double to triple what Hawaiian and Aloha charge for Neighbor Island trips, according to Beyer. She says she believes that Hawai'i's interisland fare "lies somewhere in between" these prices.

"Fares will continue to go up," said Beyer. "It's only realistic that they do."

Beyer and other airline experts believe that a return to the 1990s fare wars is out of the question with today's high oil prices. Those price wars, in which one-way kama'aina fares dipped below $40, came about when a third interisland airline such as Discovery Airways, Mid Pacific Airlines or Mahalo Airlines aggressively priced fares. The smaller airlines eventually were forced to shut down in face of mounting losses.

"This movie has been played over and over again, and it's had the same ending each time," added Mark Dunkerley, Hawaiian's chief executive.

"I don't have any reason to suppose that if the movie was played again, the ending would be any different."

To be sure, Hawaiian and Aloha are hardly alone when it comes to financial troubles.

Since 2000, the nation's airline industry has lost more than $35 billion, and four of the nation's seven largest legacy carriers — United Airlines, US Airways, Delta Air Lines and Northwest Airlines — are operating under bankruptcy protection.

But what makes Hawaiian and Aloha stand out is that their core market — interisland travel — is shrinking and showing no signs of returning to the halcyon days of the early 1990s.

Dunkerley estimated that the number of passengers flying interisland has declined by as much as 25 percent during the past four years.

He attributed the trend to increased direct flights from the Mainland to the Neighbor Islands by major U.S. carriers.

Starting in 2000, United, Northwest and American Airlines have increased direct service from West Coast cities to Kona, Hilo and Kahului, altering the old model, in which visitors from the Mainland and Japan would have to fly into Honolulu airport and board either Aloha or Hawaiian to get to the Neighbor Islands.

During the same time, travel by Neighbor Island residents to O'ahu is down significantly as their retail and economic infrastructures have matured, Dunkerley said.

With the entry of big-box retailers such as Costco and Home Depots on Maui, Kaua'i and the Big Island, Neighbor Island consumers no longer have to fly to O'ahu to shop at Ala Moana Center, Iwilei or the Waikele Center, he said.

"This creates a situation where the existing players are going to be scrapping over fewer and fewer passengers," Dunkerley said.

While both Aloha and Hawaiian say they remain committed to serving the interisland market, airline industry experts say that they have no choice but to focus expansion efforts on higher-margin Mainland and international routes.

Already, the Mainland routes account for more than half of their annual revenues.

Aloha, which launched its Mainland service in 2000, is focusing on secondary West Coast markets such as Oakland and Orange County, Calif., where competition from carriers such as United, American, Northwest and Hawaiian is virtually nonexistent.

For Hawaiian, which has been flying to the Mainland since the mid-1980s, the shrinking local market means that expansion will come from Asia and new Mainland markets on the East Coast.

While Hawaiian won't identify potential new routes for competitive reasons, the airline has been eyeing China and other eastbound markets for some time. Hawaiian bid for a new slot to fly to Shanghai but lost out to American and Continental earlier this year.

"That's where the growth is for them," said Raymond Neidl, airline analyst with Calyon Securities in New York. "It's not in the Neighbor Islands."

The airlines also could face additional cost cuts as higher fuel costs are starting to eat away at any savings they've achieved during bankruptcy.

Since filing for Chapter 11 protection in December, Aloha has been able to cut its annual costs by $16 million by obtaining wage concessions from its unions, outsourcing some of its maintenance work and eliminating less-profitable flights to Vancouver, British Columbia, and Burbank, Calif.

But David Banmiller, Aloha's CEO, recently told The Advertiser that the higher fuel costs increased the airline's expenses by $16 million, offsetting the savings.