Discounted interisland airfares welcomed by Hawai'i residents are proving costly for local air carriers, with the latest report by Aloha Airlines showing an $18.8 million second-quarter net loss.

That was more than six times the $2.81 million net loss Hawai'i's No. 2 airline reported a year earlier. Aloha blamed the red ink on costly airfare skirmishes and higher fuel prices.

"It was really a rough quarter," said Stu Glauberman, spokesman for Aloha. "Fuel prices were way up and fares were down."

Losses have almost become the norm for Hawai'i's local carriers since go! airlines entered the interisland fray in June 2006, touching off competitive airfare fights as it promoted regular discount fares of $39 one-way and has had frequent promotions of interisland tickets for $19.

Both Aloha and Hawaiian Airlines, the largest airline based here, have lowered fares in response as they defended their turf. Aloha's been flying here since 1946; Hawaiian traces its history back to 1929.

Observers believe the discounts, while embraced by interisland travelers, will end at some point, just as they have when other carriers have tried to enter the market. Prior to go!'s entry, Aloha's and Hawaiian's regular interisland fares were in the $70 to $80 range.

"At these low prices, this can't go on forever," said Peter Forman, author of "Wings of Paradise, Hawaii's Incomparable Airlines," and a former DC-9 captain who flew for 20 years with a Mainland carrier.

"The average pricing has to return to at least $50 a ticket for any of these carriers to make money."

Aloha's net loss came on the heels of a $24.3 million deficit sustained in the first quarter and other losses last year. The discount fares also weighed on Aloha's top line, or total sales, which was down $6.25 million from the $96.3 million pulled in a year earlier.

Hawaiian Airlines' parent company has reported more than $20 million of losses through the first six months of 2007. Hawaiian, in announcing its second-quarter results on July 30, said it faced a "turbulent competitive environment" and that the interisland market was "awash with discounts."

Forman said go! isn't making money either. That may be partly reflected in the stock price of its parent company, Mesa Air Group. The Phoenix-based company's stock closed at $8.95 a share on June 6, 2006, the day go! began operations. Yesterday it closed at $4.86.

"In the long run, what needs to happen is some sanity needs to return to the interisland market," said Forman.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.