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- Hawaiian Airlines
3375 Koapaka Street, G-350
Honolulu, HI 96819
- Main hub
- Honolulu International Airport
- United States of America
- Business model
- Full Service Carrier
- Domestic | International
- Frequent Flyer Programme
- Association Membership
- Codeshare Partners
- Air China
All Nippon Airways
Delta Air Lines
Hawaiian Airlines operates from hubs at Honolulu International Airport and Kahului Airport, on the island of Maui. The carrier provides a network of domestic services throughout the Hawaiian islands and to the mainland US as well as international services to Asia, the Pacific and Australia. Hawaiian utilise a fleet of narrow and wide-body Boeing and Airbus family aircraft.
Location of Hawaiian Airlines main hub (Honolulu International Airport)
Hawaiian Airlines share price
50 total articles
A transborder joint venture between SkyTeam partners Aeromexico and Delta is hanging in the balance now that the US DoT has required slot divestitures and other stipulations in order for the airlines to move forward with their proposed business agreement. Not surprisingly, Aeromexico and Delta believe limitations proposed by US regulators would diminish the economic benefits of the joint venture, and are warning they are reconsidering deepening their business ties.
Numerous airlines expressed concerns about Aeromexico and Delta’s concentration of slots at Mexico City Juarez, and the DoT responded by requiring slot divestitures at the airport along with the relinquishment of slots at New York JFK. The airlines have countered that the DoT’s analysis is flawed, and that a smaller number of slot divestitures at Juarez required by Mexico’s government should allay any concerns expressed by competitors. Aeromexico and Delta also argue another stipulation imposed by US regulators – limiting the joint venture to a five-year term – would create too much uncertainty for the viability of the business venture.
Delta’s plans to take its stake in Aeromexico up to 49% was contingent on the JV proposal succeeding. But with the stipulations imposed by DoT in order for the partners to establish their joint venture a dark cloud of uncertainty is hovering over Aeromexico’s future ownership structure.
Hawaiian Airlines’ geography has been a boon for the airline throughout 2016 as the company’s unit revenue performance has outpaced that of its peers. Hawaiian has benefitted from immunity to the lack of pricing traction in many domestic markets on the US mainland, and rational capacity deployment on is largest North American routes.
The company expects to continue posting a unit revenue outperformance for the remainder of 2016, driven by still favourable capacity trends in its markets. Hawaiian’s own capacity growth is expected to fall between 3% and 4% for 2016, and remain in the low- to mid- single-digit range for the foreseeable future.
Although Hawaiian continues to outperform the industry in unit revenue, the company is facing inflated unit costs in 2016 driven by several factors, including increased compensation and technology investments. The airline is also in the middle of pilot negotiations, and has acknowledged additional cost headwinds once a new collective bargaining agreement is reached.
The largest airport outside Asia with flights to Japan is, perhaps surprisingly, none other than Honolulu. Approximately 19 flights a day in 2016 depart Honolulu for Japan, creating a nearly hourly beach shuttle. Among all global airports Honolulu is eighth largest for international flights, outpaced by airports such as Taipei and Bangkok, but Honolulu still has more Japanese flights than Singapore, Manila or Kuala Lumpur.
All Nippon Airways is proceeding with plans to deploy its forthcoming fleet of three A380s exclusively to Honolulu from 2019. Honolulu presents opportunity, but also protection. Despite all the changes to aviation and tourism over the last decade, Japanese demand to Hawaii has remained consistent. It is also strongly, almost exclusively, outbound Japanese – good for ANA since passengers will pay a premium for a Japanese airline.
Following Japan Airlines' bankruptcy and restructuring in 2010, ANA has overtaken JAL as the country's main international airline and outpaced it, except in Hawaii. Hawaii, with its leisure point-to-point demand, is not core to ANA's strategy. But ANA has a very different, non-operational reason for allocating the A380s to Hawaii.
Hawaiian Airlines’ unique geography continues to benefit the company in 2016 as favourable capacity trends are one factor in its industry outperformance in unit revenue metrics. Hawaiian’s outlook for the remainder of 2016 remains positive as industry capacity on its routes to North America and long haul destinations remains relatively benign.
The airline is acknowledging slight pressure in its inter-island operations due to heightened competition with the smaller operator Island Air. Hawaiian plans to adjust its inter-island schedule later in 2016 to maximise peak flying and cut some off-peak flights.
Hawaiian is expanding service to the Tokyo market in 2016 after being awarded new slots at Haneda airport. But the expansion is not affecting Hawaiian’s overall growth targets of a 2.5% to 5.5% increase in capacity, which is significantly lower than the double-digit expansion it recorded from 2011 to 2013.
The paradox of margin expansion and unit revenue contraction will continue for most US airlines into 2Q2016 as those companies work to alleviate investor concern and set a course for a positive unit revenue trajectory. But maintaining favourable unit costs is key for the continued margin expansion forecast by the three large US airlines – American, Delta and United.
Although fuel prices have been rising, energy costs remain below historical levels, which is helping American, Delta and United to keep their unit costs in check. Excluding fuel, each airline has varying forecasts for 2016 driven by different inputs, including rising labour costs and profit-sharing.
American’s unit costs during the past year have been affected by labour contracts it reached with pilots and flight attendants in 2015. Delta and United will also likely need to weather labour cost increases as both companies are in the process of negotiating contracts with different employee groups. Many US airlines face uncertainty in their cost performance in the future as they work towards favourable contract terms that preserve their efforts to contain costs. And so the wheel turns.
The record profits that US airlines are enjoying from lower fuel costs are being shaded by weaker passenger unit revenues and labour discontent as work groups at various airlines strive for market rates that are on an upward slope.
Some of the higher-profile negotiations include pilot collective bargaining at Delta and Southwest. Pilot groups at each airline have rejected contract proposals during the past year, and are currently requesting wage increases that they believe will put them on par with the industry average; an average which has been growing due to contracts brokered by their competitors, American and United.
Even airlines that have typically enjoyed positive pilot relations are encountering higher levels of turbulence in their latest round of talks. Hawaiian Airlines’ pilots have been especially vocal during the current round of negotiations, the pilots voicing their frustration over lower rates of pay versus the airline’s competitors.