Hawaiian Airlines Bullish on Japan Routes in the Long Term Despite Slow Outbound Recovery and Rising Accommodation Costs

Hawaiian Airlines

Peter Ingram, president of Hawaiian Airlines, commented in a post-earnings call that the traffic volume for the Japan routes is improving more slowly than anticipated.

With the reinstatement of slot usage requirements, the seat load factor on the Japan routes has been declining since August, except for routes excluding fire-affected Maui Island, which remain solid, and the Seoul/Incheon to Honolulu route performs well. It’s also noted that for routes to the islands, there’s a tendency for Hawaiian Airlines to be chosen over Southwest Airlines. POS bookings in Japan were about 50% of the 2019 levels.

Regarding the Japanese market, Brent Overbeek, Vice President of Revenue Management & Network Planning, mentioned, “Considering the weaker yen and soaring accommodation prices, a slow demand recovery in the short term is expected,” but added that they are bullish in the long term, although the summer schedule will be kept at 18-21 flights a week, taking seasonality into account. Overbeek stated, “We still have confidence in Japan’s full recovery, and as recovery progresses, we will deploy more equipment to meet market demand.”

President Ingram also commented, “The supply-demand balance is a bit upset, and despite the strong affinity the Japanese have for Hawaii, recovery doesn’t seem immediate.” Regarding the return of late night and early morning slots on the Tokyo/Haneda to Honolulu-Kona routes, “The push for the Japan routes is due to strong demand from America and other international sources. There are no connecting flights from major American cities for the Kona flight,” explaining further that the depreciation of the yen has led to a noticeable increase in hotel prices in Kona, “Staying at a hotel on Hawaii Island in Japanese yen now costs over 120% more compared to 4-5 years ago.” The plan is to maintain other Japan routes at the moment, about equivalent to 4.5 aircraft.

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