Allegiant Air Details its Initial Hawaiian Adventure

US low-cost carrier Allegiant Air has announced it will launch flights to Hawaii in June 2012 as it reaches the last stage of a protracted licencing programme in co-operation with the US Federal Aviation Administration (FAA). The airline has been discussing a summer 2012 launch of its Hawaiian programme in partnership with Allegiant Travel for some time but it appears that ETOPS certification for its newly acquired has taken longer than first expected. A senior executive at the airline confirms that although it has not yet received the green light to begin services to Hawaii the final route proving flights will take place this week with certification a matter of weeks away.

The airline’s initial Hawaiian network will include a three times weekly service to Honolulu from its Las Vegas base with effect from June 29, 2012 and a weekly rotation from Fresno from June 30, 2012. Hawaiian Airlines already provides service on the Honolulu – Las Vegas route but there are currently no non-stop flights between Honolulu and Fresno. Although there was a small decline in capacity in 2011 there is an increasing demand for air services between Hawaii and the US mainland that has seen Alaska Airlines and Hawaiian Airlines both significantly increase capacity this year. The table below highlights the seat capacity between Hawaii and the US mainland last year by airline and the change in availability compared with 2010 and five years previous in 2006.

This clearly shows the changing dynamic in the market and how some US majors, American Airlines and United Airlines for example, have reduced their presence while others such as Continental Airlines have increased its presence. Last year, Hawaiian Airlines was the largest operator having seen capacity grow by a fifth since 2006, however, when you combine the activities of United Airlines and Continental Airlines they will become the clear market leader with a 30.6 per cent share of all available seats.

Hawaiian Airlines currently offers up to three flights per day on the Honolulu – Las Vegas route, a market it has been serving continuously since January 2003 having previously served the route with its Douglas DC-8s, DC-10s and Lockheed L1011 TriStars up until June 1995. In the past year an estimated 424,000 O&D passengers travelled on the route, approximately 70 per cent on the direct flights of Hawaiian Airlines. There have not been any scheduled links to Honolulu from Fresno for at least the last four decades but around 11,000 passengers travelled directly between the two airports in 2011, the majority flying to either Los Angeles or San Francisco on the regional flights of United Airlines before connecting to Hawaii.

The question is how will Allegiant Air’s arrival impact the dynamic of the market? Well, the answer is probably very little. Allegiant Air will be serving a very different market to the existing carriers and the majority of its seats will be sold as packages through Allegiant Travel. This will simply open a new market for travellers potentially stimulating further demand to Hawaii. Although this is likely to be only the first stage of the airline’s expansion into Hawaii it will initially offer just four flights per week, which equates to just 868 seats a week (based on a proposed 217-seat, all-Economy configuration for the 757s). This is just 45,136 seats a year, approximately 0.7 per cent of the current market.