Hawaiian Airlines serves an interesting position in the market. As the leading airline to and from Hawaii, it maintains a key player in bringing leisure travelers from near and far to Hawaii and also offering intra-island flights. While the islands currently remain under strict quarantine requirements, the airline believes its positioning will be vital to becoming successful.
Hawaiian believes its positioning will be successful
CEO Peter Ingram stated the following on Hawaiian’s second quarter earnings call:
“As I think about the future, I know that demand for travel to Hawaii will return. While technology like Zoom and the emerging prominence of remote work may have a longer lasting impact on business travel, the beauty of Hawaii can only be experienced in person.”
He went further to state:
“Our positioning as a premium leisure airline is ideal to be successful in this environment.”
Hawaiian’s route network
Hawaiian has an impressive route network that spans destinations in Asia (Tokyo, Osaka, Fukuoka, Sapporo-Chitose, Seoul), Oceania (Sydney, Brisbane, Auckland, Papeete, Pago Pago), and the mainland US (Boston, Las Vegas, Long Beach, Los Angeles, New York City, San Francisco, Oakland, Phoenix, Portland, Sacramento, San Diego, San Jose, and Seattle).
Importantly, the airline does not have a big connecting hub in Honolulu. While Hawaiian can offer connections, that is not the airline’s primary motivation or operations. Instead, the airline focuses on bringing customers to and from Hawaii while also transporting some passengers using Boeing 717s and ATRs to the other Hawaiian islands.
The long-haul destinations it serves, however, while they do have strong origin and destination traffic, also are relatively high-income areas where there would be plenty of people looking for a trip to Hawaii with a more premium experience– enter Hawaiian.
Onboard product
Hawaiian’s first class seats onboard the Airbus A330-200s are lie-flat in a 2-2-2 configuration. Though not cutting edge for an international business class product, it is a fantastic product for families or couples or friends heading to or from Honolulu who want to have a little more comfort on their ride.
In coach, all passengers on the A330-200s have access to seatback entertainment– an amenity that some other airlines heading to Hawaii do not provide.
Price-wise, Hawaiian Airlines is not too far off from its competitors coming relatively close with American, Delta, United, and Alaska Airlines– especially on its Honolulu (HNL) to Los Angeles (LAX) route.
Why this could work for the airline
The current demand environment is pretty bad compared to what it was in 2019. However, leisure travel is the only source of revenue available for airlines. Hawaii is not a major business destination. So, for years, Hawaiian has essentially already been running its operations without relying on business travelers and focusing on premium leisure travelers instead.
As a testament to the fact, Hawaiian Airlines is anticipating being only about 15-25% smaller capacity-wise than it was in 2019 in summer 2021. Almost no other airline has a similar outlook, given the record-low demand for international travel and almost nonexistent business travel.
While Hawaiian is hoping its premium leisure airline focus will help it survive the crisis and become successful and the current demand environment would support the airline’s belief, but, like everything else in this industry, it remains to be seen whether or not it works out for the airline.
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