It’s February and you’re probably thinking about Hawaii. Hawaiian Airlines likes that.
Hawaii became a state in 1959, but Hawaiian Airlines, founded in 1929 as Inter-Island Airways, began serving the islands thirty years earlier. The airline is famous for Hawaii-focused and-themed service, from the aircraft décor to the drinks to the outfits worn by flight attendants.
According to Statista, through 2021 Hawaiian was 10th among U.S. carriers, with a market share of 1.7%. However, Hawaiian Airlines is a leader in its market. During most of the year Hawaiian Airlines has the greatest number of flights from the U.S. mainland to Hawaii, although United has more flights to the Islands during peak summer months.
Hawaiian led all U.S. carriers in on-time performance from 2004-2021 as reported by the U.S. Department of Transportation. Hawaiian Airlines will also soon begin ‘bulking up’ by adding a dozen new Boeing 787 Dreamliners to its fleet.
The airline has encountered some turbulence in the last few years, particularly when Hawaii essentially ended tourism for almost two years. This included requests for tourists to stay away, a 14-day quarantine and later a tight vaccination policy for each island visited. At one point, tourists faced prison time for breaking the quarantine.
Hawaiian Airline’s market cap declined from $1.35 billion in 2019 to $0.55 billion in 2023. The timing of the slide can be attributed to COVID’s impact on travel to and from the islands.
The airline is turning the page on the pandemic. We spoke with Avi Mannis, Chief Marketing and Communications Officer, about where Hawaiian Airlines is heading.
How is Hawaiian’s recovery going?
Mannis: Our markets have recovered at a different rate than markets on the mainland.
Getting though COVID was challenging, with restrictions on travelers. We did a lot of cargo-only flights from places like Seoul, and we worked with the state of Hawaii on how to reopen safely,
The business from the US mainland has bounced back very quickly since late 2021.
We have watched as Australia, Korea, and New Zealand tourism has come back. Japan has not come back fully yet, with longer travel restrictions. We remain confident it will.
We flew to Beijing before the pandemic but stopped. We have no imminent plans to return to China; the current global environment and economy is not conducive.
Why is Hawaiian “going big” by purchasing the Boeing 787 when many other airlines are focusing on 737s and A321s from the West Coast to Hawaii?
Mannis: We are making important investments in the future. Currently we’re operating the Airbus A321neo on West Coast to Hawaii flights. It’s a terrific aircraft. We are very happy with the economics, both its lower fuel consumption and premium seating.
The 787 is a long range wide body aircraft, and it offers a larger premium cabin than our current longer-range aircraft, the Airbus A330.
As Hawaiian Airlines is just recovering from the pandemic, was purchasing new 787 aircraft a challenge?
Mannis: We have a strong balance sheet. The Dreamliners will give us a new revenue generating service. They’re terrific for creating new routes. We’ve ordered 12 Dreamliners, with the first arriving by the end of 2023. Commercial service will begin in 2024.
These are 787-9s that burn less fuel and have global range. Ours will have 34 Business Class lie flat seats. We’ll also have some coach seats with extra leg room.
There’s a lot of demand for Hawaii as a leisure destination. We’ve had impressive performance for our premium cabin. We are excited about having more seats to sell.
What regions are you thinking of targeting with the new planes?
Mannis: Hawaiian is a destination airline focused on the needs of our state of Hawaii and its visitors. We have built a deep loyalty base to people in the state, and we focus on where our brand has competitive advantage.
While the Boeing 787 has the theoretical range to get to Europe, we feel we have more opportunity in Asia. For instance, we’ve been a very significant player in Japan, which has been 20% of our business. We’re also thinking of expanding service to East Coast cities like Boston and New York.
What are other revenue-generating activities for Hawaiian?
Mannis: We announced in the fall that we will be partnering with Amazon.com to operate and maintain an initial fleet of 10 Airbus A330-300 freighters. Freight service will start in the fall of 2023. The planes will be branded Prime Air with our pilots and our certificate.
In terms of leisure travel, over the last couple of years, I’ve gotten the impression that Hawaii is ambivalent about restarting tourism. Is that changing?
Mannis: There is no doubt tourism has an impact. All of us from the airline live here. A challenge is to mitigate and manage tourism better—how can we help? How can we share that with tourists?
On the plane, we show a video to all guests called Travel Pono, explore with care, travel the right way. It’s about what visitors can do to stay safe in the water, have better experiences, and respect natural resources, cultures and communities.
(Hawaiian is also involved with several other conservation initiatives. One is a program with Aquaman actor Jason Momoa, himself Hawaiian, and the water company he founded, Mananalu. The program will substitute plastic water bottles with the company’s 16 ounce “infinitely recyclable” aluminum canisters for Premium Cabin guests on all U.S. East Coast and international flights, with the goal of replacing more than 280,000 plastic bottles annually.)
Hawaiian Airlines is the tenth-largest US carrier in passenger numbers. How do you plan to grow?
It’s not our goal to be the biggest, our goal is to serve our customers.
Our strategy to increase profitability is to participate in all the markets that are big providers to Hawaii, and to command a premium over our competitors for our service. For example, we have a strong business class product with lie-flat seats.
Our flight experience starts your vacation when you get on board, with the sensory cues, the music, the free glass of punch and the meal. We offer Wi-Fi connectivity for every guest on long haul flights.
We typically have the most flights to Hawaii, and we try to optimize our flight schedule to meet the needs of travelers. You get in at time for hotel check in in Honolulu.
Our differentiators are experiential. We think it adds up to a pretty compelling value.