Hawaiian Airlines has a very clear mission. With no hubs on the mainland, its network goal is to connect the state of Hawaii with the United States and the rest of the world. Using a fleet of Airbus A321neos, A330s, and in the future Boeing 787s, it does this mission very well. Hawaiian has added some markets over the last year, and it has also continued to round out and mature several of its existing points in the network. However, in conversation with Simple Flying, Brent Overbeek, SVP of Revenue Management and Network Planning at Hawaiian, stated that Hawaiian is not tapped out and has room to grow.
Building out the Hawaiian Airlines network
Over the last few years, Hawaiian Airlines has worked on expanding its position between Hawaii and the mainland. One of the key drivers in that was the arrival of the Airbus A321neo, as Mr. Overbeek stated:
“We’ve grown our North American footprint quite a bit. We really accelerated it with the arrival of the 321 and that was a real gamechanger for us. We worked our way through those growth years and really 2019 was a year where we had a lot of growth and change in terms of arrivals of 321s, building out Maui hub a little bit more, and adding some frequency in other markets.”
Hawaiian does not operate on a traditional hub-and-spoke style system. It will sell connections where they arise, but it has not oriented its network around the kind of model that major carriers like American or United have.
Data from Cirium shows that Hawaiian has primarily oriented its network around the following airports, using data from December 2021:
- Honolulu (HNL) with up to 80 departures per day
- Maui (OGG) with up to 37 departures per day
- Lihue (LIH) with up to 21 departures per day
- Kona (KOA) with up to 20 departures per day
- Hilo (ITO) with up to 11 departures per day
Its largest operations on the mainland US are Los Angeles (LAX), with six daily departures, and Las Vegas (LAS), with up to four daily departures. In total, Hawaiian serves 16 destinations in the mainland United States.
Hawaiian sees more opportunities to grow
While Hawaiian Airlines has done well on the West Coast and built out its network, it is not done with growth. Mr. Overbeek stated the following:
“I don’t feel like, by any means, we’re constrained on growth. If you look at where we compete, we generally do very well. We’re still only roughly a quarter of North American-Hawaii traffic volume.”
Hawaiian Airlines has faced plenty of competition on several of its key routes. Southwest Airlines came in with a huge splash and has expanded significantly between the West Coast and Hawaii, presenting a challenge to Hawaiian. However, Hawaiian Airlines has continued to do very well, and its bet on a more premium-oriented leisure customer has it feeling bullish on its current and future network and standing.
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Where can Hawaiian grow?
Mr. Overbeek did not state any specific markets, but he talked a little about some of the geographies where Hawaiian could see some opportunities:
“We think there’s more opportunity both on the West Coast. As we look off the west coast in the places, on the East Coast. Midwest…Obviously, we’ve grown Austin out and continue to look for other opportunities.”
In short, Hawaiian Airlines has a larger array of markets it is looking at adding. The fleet will be the primary determinant as to when and where Hawaiian can grow, but when the opportunities arise, it has shown it is not scared to jump on them. Recent examples include Austin and Orlando, which are two markets that previously lacked nonstop service to Hawaii.
Hawaiian is still planning on staying disciplined, however. Mr. Overbeek emphasized that Hawaiian was not looking to grow for the sake of growth:
“I’m really more focused around kind of bottom line growth in terms of profitability. So we’ll look for opportunities to grow share where we can in some of the bigger and deeper markets. If there’s new markets that makes sense for us to grow, where we can return the most amount of investment to the bottom line and support our investors, we’ll certainly look for that as well.”
This makes a lot of sense for Hawaiian Airlines. In a market as competitive as the US mainland to Hawaii, getting to a 50%+ market share would require a sizable amount of capacity, which likely also means a sizable amount of discounted fares that can lead to price wars and losses. However, a more targeted approach makes a lot of sense and will likely yield better results for Hawaiian.
Hawaiian still sees more room to grow. There are plenty of cities that lack nonstop service to Hawaii where the “Swiss Army Knife” Airbus A321neo could do well or where a few frequencies per week on the A330 could work. Hawaiian is taking a more disciplined approach, but its focus in the mainland US is broad. It would be unwise to cast off Hawaiian, and time will tell what new cities enter the Hawaiian network.