Hawaiian Airlines is refocusing its efforts on the U.S. market to counterbalance a decline in demand from Japan, its largest international market, due to the weakening yen.
“Across our international routes, most notably in Japan, where the yen remains historically weak against the U.S. dollar, international point of sale remains below traditional levels,” CEO Peter Ingram said on an earnings call following the publication of the airline’s second-quarter financial results. “We've backfilled some of this missing Japan point of sale demand by proactively intensifying our focus on the U.S.”
The depreciation of the yen has impacted Japanese travelers, making trips to the U.S. more expensive and reducing the revenue Hawaiian Airlines generates from the country. This has necessitated a strategic redeployment of capacity from international to U.S. domestic routes.
Ingram highlighted the carrier’s recent additions of flights between Hawaii and mainland U.S. cities. “The three recently added routes, Salt Lake City to Honolulu, and between Sacramento and both Kona and Lihue, have performed very well,” he said.
“The availability of our fleet is critical, and we've been challenged over much of the past year and a half with well-chronicled shortages of [Airbus] A321neo engines. I am very pleased to share that our A321 fleet has been at full strength since the Memorial Day weekend with a full complement of engines. We expect this to remain the case through the rest of the year and into 2025.”
Chief Revenue Officer Brent Overbeek echoed Ingram’s optimism regarding the performance of the new domestic routes. He also noted that while the Maui market continues to recover slowly following the 2023 wildfires, other routes have provided stability for the airline’s North American operations.
Overbeek added that the yen exchange rate remains the biggest headwind in the Japanese market, but said that the carrier continues to see "strong affinity among Japanese consumers for Hawaii and for our brand."
Hawaiian Airlines operates four routes from Honolulu to Japan at present, OAG Schedules Analyser data shows, flying double-daily to Tokyo Haneda, daily to Tokyo Narita and Osaka Kansai and 3X-weekly to Fukuoka. Overall, the carrier offers about 17,000 two-way weekly seats between Hawaii and Japan, compared with about 19,200 at this time in 2019.
Earlier this year, the carrier returned seven nighttime slot pairs at Tokyo Haneda from Honolulu and Kona, saying the Japan-Hawaii market was “still encountering headwinds” and therefore “does not forecast a turnaround in the performance” of the services.
Although Hawaiian Airlines continues to see sluggish outbound leisure demand from Japan, All Nippon Airways Holdings has posted record-high quarterly revenue for the three-month period ending June 30, noting that inbound tourism and outbound business travel are continuing to increase. ANA recently announced plans to add routes to Istanbul, Milan and Stockholm this winter to cater for demand to Europe.
Hawaiian Holdings Inc., the parent of Hawaiian Airlines, reported operating revenues of $732 million in the three months to the end of June, up by 3.5% on the same period in 2023. Operating losses came in at $55.4 million, compared with $9.6 million at this time last year. The carrier is currently awaiting government approval for a proposed $1.9 billion merger with Alaska Airlines.
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