Hawaiian Airlines received better than expected results for the first quarter of 2022, with a strong demand for flights throughout their network. The effects of the pandemic are muted, and many countries are lifting restrictions for international travel. Pre-pandemic, 70% of the airline’s revenue was from Japan and the largest international market, but Japan still has some travel restrictions. Hawaiian Airlines has seen a steady recovery especially domestically and in North America, but there is a stumbling block.
Other considerations
” In Japan, travel restrictions incrementally eased with the removal of government-mandated quarantine and an increase in visitor arrival allowances. But the current restrictions remain a significant barrier to travel.”
– Peter Ingram, President and Chief Executive Officer at Hawaiian Airlines
With Australia and South Korea recently opening up for international travel, it was expected that Japan may follow suit. There is a keen interest in Hawaii as it is seen as a safe, comfortable place and very appealing to the Japanese traveler.
Prior to the pandemic, most trips were booked through travel agents, between six and nine months in advance. Now, many travel agents have gone out of business, people have got used to booking their own travel and are less likely to book so far in advance. Some may also have chosen to take trips closer to home.
Hawaiian Airlines believes it could easily fill more planes if the arrivals caps were removed. Photo: Hawaiian Airlines
The Japanese Yen is also under pressure and the cost of a vacation will continue to rise. Accommodation in Hawaii and general living costs have gone up and so has the price of fuel, causing many airlines to scale back on their schedules. Hawaiian Airlines says that ‘there is sufficient demand to fill a lot more seats’ on the Hawaii to Japan routes.
The stumbling block
Although quarantine for vaccinated passengers is no longer necessary, Japan does not have the capacity to test all international arrivals. Therefore, weekly or per flight ‘caps’ have been put in place, only allowing each carrier to bring so many passengers into the country. At the present time, there are around 10,000 arrivals allowed daily through all the carriers. Before the pandemic, there were 140,000 to 150,000 arrivals daily.
After the Olympics, it was hoped restrictions would be removed and then after the elections, but then the Delta and Omicron waves set in. Now it is hoped that changes will be made after the coming elections in July.
Hawaiian offers a fully lie flat business class experience on its Airbus A330s. Photo: Hawaiian Airlines
Light at the end of the tunnel?
Despite the uncertainties, Hawaiian Airlines is well-positioned with its brand and quality of experience to meet the demand for a Hawaii vacation in the international travel market. It has restored services to full capacity, remain commercially flexible and efficient and is preparing for the arrival of B787s. It has a strong demand for forward bookings from North America and a well-acclaimed product with its premium cabins and forthcoming inflight connectivity provided by Starlink.
” [The airline] will be ready as additional restrictions come off, particularly the arrival cap … Probably the most important one for us to move forward.”
– Brent Overbeek, Chief Revenue Officer at Hawaiian Airlines
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