Hawaiian Airlines has cut back its flying to international destinations. With idle planes, the airline redeployed those jets onto new routes to Austin, Texas, and Orlando, Florida. As travel demand comes back, Hawaiian believes that it will be able to bring back its international network while still flying the new domestic routes.
Hawaiian believes it can bring back its international routes
The crisis has decimated travel demand for long-haul international routes. Coupled with border restrictions significantly impeding travel to Australia, New Zealand, South Korea, and Japan, Hawaiian Airlines has cut back capacity in these markets.
For example, the airline is not flying to Australia and New Zealand, but it is hoping to return to those markets in late 2021, though things can change quickly.
Instead of letting those Airbus A330 planes sit idle, Hawaiian Airlines decided to use them to launch flights to Orlando, Florida, and Austin, Texas. This is in addition to expanded Airbus A321neo this year to destinations like Long Beach, Ontario, and Phoenix.
When asked on the airline’s first-quarter earnings call about whether the expanded mainland US flights would impact the airline’s ability to return to all of its international markets, CEO Peter Ingram stated the following:
“We do have a little bit more capacity in North America this summer than we did before the pandemic, but it is more on the margin than a sort of seismic shift of activity, based on airplanes that were flying international. So I think we will largely be able to restore our international flying as demand opportunities improve, and to the extent we are having to choose where to put scarce aircraft capacity, that’s a high-class problem relative to some of the things we’ve been working on for the last 13 months.”
Hawaiian’s new routes to Austin and Orlando will only run a few times per week, so the two new routes do not take a significant number of planes to run.
Where Hawaiian flies internationally
Hawaiian does have a sizable Asia and South Pacific route network. Before the crisis, the airline flew to Auckland, Brisbane, Fukuoka, Osaka, American Samoa, Tahiti, Sapporo, Seoul, Sydney, and Tokyo. Only a few of these destinations are back in operation today.
Many of these markets are heavily restricted in terms of inbound international travel. Auckland, Brisbane, and Sydney face the largest barriers to entry, which is why Hawaiian has shied away from flying its jets to those markets right now.
The resumption of international flying and the Boeing 787s
Hawaiian knows that it is not looking at an increase in international travel demand this year. At this point, it is also not a given that any or all of these markets will fully reopen in 2021, with demand following sequentially, leading Hawaiian to need to operate to all of those destinations with the same frequencies it flew pre-pandemic.
Hawaiian’s first Boeing 787 is due at the airline next year in September. Nine more Boeing 787s will follow through 2026, with two deliveries in total coming in 2022. The 787 could be a way for Hawaiian to thread the needle on both US and international routes.
Even places like Australia and New Zealand open up, it is not a given that there will be the same amount of demand for travel to the region as there was pre-pandemic. So, Hawaiian could get away with perhaps flying fewer weekly frequencies than it flew pre-pandemic. This would allow it to still serve the new routes to Austin and Orlando without needing to cut international routes altogether.
Then, when travel demand does come back, the Boeing 787 could free up Airbus A330s. Hawaiian’s Airbus A330s are, on average, just over 7.5 years old, which makes these aircraft very young and poor candidates for retirement.
So, if it keeps all 24 of its A330s and frees up a plane or two thanks to 787 deliveries, then it can cover not only the new destinations but ramp up frequencies to international destinations without sacrificing any other frequencies. As more 787s join the fleet, it can also turn its attention back to expansion.
At the end of the day, this is, as Mr. Ingram describes it, a “high-class” problem. Hawaiian is nowhere near being to the point where it needs to evaluate how to best utilize its fleet to service the full breadth and depth of its long-haul market, and, when that time comes, it likely will not be too far away from taking its first Boeing 787 Dreamliner.