’ recent route cuts don’t signal any wider problems with its international network or the carrier’s overseas growth strategy, says CEO Mark Dunkerley.
Expanding to new international destinations has been one of the cornerstones of the carrier’s strategy, and it has added a slew of new routes since 2010. However, in the past few weeks it has announced the suspension of flights from Honolulu to Taipei and to the Japanese city of Fukuoka.
Dunkerley tells Aviation Week that these two routes had “very specific circumstances that are not broadly applicable to other international routes.” The “vast majority” of the new international services are “performing extremely well,” and many of them count among the airline’s most successful routes, he says. Next month Hawaiian will launch flights to Beijing, a market it has high hopes for.
The problems with the two suspended routes were serious enough to discontinue them, but that does not change the airline’s focus on overseas expansion and establishing an international network that can be “a new leg to the stool,” Dunkerley says. The airline’s intention is to reduce its reliance on flights to the U.S. mainland.
The Taipei flights, which were launched in July 2013, have proven “disappointing,” Dunkerley says. The carrier expected Taiwan’s entry into the U.S. visa waiver program to stimulate the market, but that did not occur to the extent predicted.
Other markets have seen demand jump 50-100% following their inclusion in the U.S. visa waiver program, says Dunkerley. Hawaiian saw this in the Seoul market in 2009, where the visa waiver doubled demand despite the global financial crisis.
“We anticipated similar [demand growth] in Taiwan, [but] it did not materialize,” Dunkerley says. The service will be cut starting April 7.
Likewise, the Fukuoka route has produced too little growth to justify its continuation. It was introduced in April 2012, and will be suspended on June 30. Japan has been a focus of Hawaiian’s international growth, and the carrier also flies to Tokyo, Osaka, Sendai and Sapporo.
As well as these two route cuts, Hawaiian is reducing its Seoul frequencies. This is partly because its new direct Beijing service, which begins April 16, will reduce the need for connections to China via Seoul, says Dunkerley. In addition, the Seoul market has seen big differences in demand on certain days, so the carrier decided to cut the slowest days while upgauging the aircraft type on the more popular days. From April 23 it will operate-200s five days a week instead of -300ERs seven days a week.
Meanwhile, Hawaiian is preparing to expand its presence in U.S. West Coast markets this summer. It has just announced it will reintroduce a daily Honolulu-San Jose service on May 16, a route that it cut in January 2013. Hawaiian will also upgauge its Honolulu-Oakland flights from 767s to A330s starting June 18.
The carrier plans to make its seasonal Los Angeles-Maui flight a year-round service, as of May 2. It will also add a second daily flight from June 30 to Sept. 8.
This summer it will launch seasonal flights from Los Angeles to Kona and Lihue between June 26 and Sept. 19, and it will add seasonal flights from Oakland to these Hawaiian destinations between June 14 and Aug. 15.
Dunkerley notes that Hawaiian understands the West Coast-Hawaii market better than its many competitors, and the airline saw some opportunities to add new service.
Some of the upgauging decisions are related to the carrier’s fleet modernization. During a 13-month span from December 2013 to January 2015, the airline is due to receive five A330s, and will retire four 767s.