While flying Hawaiian Airlines yesterday to the Honolulu press conference, we saw first hand how the news was impacting employees. One flight attendant told us she heard the news on the plane. Another flight attendant said she only wanted to fly with Hawaiian because her parents worked for the airline for thirty years. It’s clearly not easy to show up for work and see that the company you have devoted your career to is planning to be sold to another airline.
Hawaiian Airlines is more than an airline to Hawaii.
It’s the largest private employer in the state and is also emblematic of strong local pride.
For those of us who live here, having an airline based in Honolulu with international, mainland, and interisland routes was always about a sense of pride, local ability, and much more. Hawaiian flew with an Aloha spirit that none of the others could duplicate since Aloha’s demise while proudly displaying the flag of the State of Hawaii, as its own flag carrier.
When we find ourselves in Sydney or at JFK, for example, and we see the Pualani on the Hawaiian tail, it evokes a feeling of comfort and home. If the sale goes through, all operations will soon become based instead in Seattle.
Is it even possible to maintain separate branding between Alaska and Hawaiian?
We’ve seen this work before in similar circumstances. Several months ago, we flew SWISS to Geneva and enjoyed service from flight attendants who are Swiss nationals, food choices that reflected their own country, and a plane proudly displaying the flag of Switzerland. In actuality, SWISS is whoely owned by a German airline, Lufthansa, but kept its branding. If you dig deeper, however, Lufthansa provides the maintenance, technology, call service centers, and most of the remaining infrastructure that keeps SWISS flying.
At this point, Alaska also plans to let Hawaiian keep its unique identity. That didn’t happen, however, when Alaska took over Virgin America. But perhaps in this case it will truly be different and seen as a good marketing move to have the Hawaiian name and service kept. And also given that Hawaiian is a far stronger brand than Virgin America. But how that will ultimately unfold is anyone’s guess.
Safety comes first during distracted times.
Jeff spoke with Joe Sprague, who is now in charge of Alaska Airlines’ integration with Hawaiian Airlines. He reports directly to Ben Minicucci and has had a long and diverse career with Alaska. Joe mentioned, among other things, something that we’ve heard from no one else. That is about keeping safety first during distractions caused by the acquisition and how it impacts the airlines’ employees. This came as great advice from a seasoned airline executive.
Emotions ran high at the Honolulu press conference.
Hawaiian CEO Peter Ingram told Jeff that he sadly hadn’t had time to be with the employees yet to help them work through the emotions they were starting to experience. Keep in mind that most employees only found out about the acquisition at 9 am on Sunday morning.
It was hard to hide the emotions we saw between these two companies that we have known well for so long. Ben, CEO of Alaska, was respectful, restrained, but ebullient about the upcoming merger, the largest event ever for Alaska Airlines. Peter Ingram, who we’ve known and watched far longer than Ben, was a pro. He put on a strong face and did a superb job of explaining the acquisition from the Hawaiian side of things. Nonetheless, his face (lead image) couldn’t hide what we perceived as profound sadness too. In addition to everything else, Peter will be losing his job as CEO, when the merger is concluded. Ben said, “there can only be one CEO.” Jeff told Peter he has the hardest job at Hawaiian, to which Peter responded, “I have the best job.”
Would Hawaiian have survived without Alaska Airlines?
That’s hard to say, and we’ll leave that mostly to others including your comments. We know that Hawaiian’s business, like other airlines, suffered deeply during and since Covid. They have been a myriad of problems, too, that have included significant issues with their technology, including the online reservation system. Hawaiian has also been hurt by significant flight cancellations and delays, based on issues associated with Honolulu airport repairs, pilot and staff shortages, and other factors, many entirely outside of their control.
Hawaiian Airlines’ international business has never recovered from Covid, and it will be years before it does fully. They also faced purchasing a new fleet of interisland planes to replace the largely used-up Boeing 717 planes that are now about two decades old and have extremely high usage cycles due to the short and frequent hops interisland.
Southwest Hawaii flights came on strong as well and continue to provide significant ongoing competition to Hawaiian across both west coast and interisland routes.
As would be appropriate, Peter Ingram said yesterday that the merger was not a result of necessity and that they were approached entirely by Alaska Airlines early in 2023. On the other hand, the issues Hawaiian has and is facing are without doubt daunting for the relatively small regional carrier, which lacks the resources of larger airlines.
Hawaiian Airlines’ on-time performance slipped from 1st place to 5th place for all of 2022.
Peter Ingram told Jeff, however, that recently, Hawaiian has returned to number one in on-time airline performance for three of the last four months.
Can Hawaiian Airlines fix its litany of issues prior to the merger?
Jeff asked the CEOs about this specifically. He inquired about a range of items. Those outstanding include the reservation system coming to completion, the Boeing 787 Dreamliner deliveries, a new fleet to replace the very aged Boeing 717 interisland fleet, and the new airline-wide WiFi.
Peter Ingram addressed these as follows. The Dreamliner deliveries will start as expected, with one plane in early 2024. The Starlink WiFi will be rolled out in 2024 as planned. A decision on a Boeing 717 interisland fleet replacement will await being acquired by Alaska Airlines. The reservation system may or may not be concluded in its entirety prior to the 12-18 month period of regulatory approval and merger. In discussing it further with Avi Mannis, Senior Vice President at Hawaiian, he said that they are reviewing those aspects of the reservation system that can be completed during the time before the anticipated merger conclusion.
We look forward to your thoughts about the Hawaiian Airlines acquisition by Alaska Airlines.
Hawaiian Airlines is our favorite airline, and we fly it annually, sometimes more than once a year from SFO to the islands. We really hope for the best in the merger for employees, customers like we are and everyone for the long term. Please, all that are involved, do what is best for the company in the long term. Thank you.
And British Airways, Aer Lingus, Iberia are all owned by IAG. KLM is owned by Air France. There’s a lot of brand equity in Hawaiian Airlines. Alaska is, I’m sure, savvy to that and will keep the brand. Given HA’s recent woes related to infrastructure, and Alaska’s strengths there, one might postulate that Alaska’s acquisition is JIT. Better it’s now while the HA brand is still strong than by a corporate raider (think TWA) who would dismember it.
Well said David. Hawaiian’s recent issues are all going to be behind them by combining AK’s strengths with what has made Hawaiian such a great airline. Covid, runway 8L closure, NEO teething problems, Japans slow recovery from Covid and call center/website issues left them with 900 million debt. All that gets put in the rear view mirror and the AK/HA version of Hawaiian returns to the airline it was pre Covid…back then, the stock hit $60!
So I have BOTH Hawaiian Miles and Alaskan Miles, now what?
In addition, can we now use Alaska Lounges at LAX? Further, Terminal location Changes?
There are some people trying to float the idea that this merger may have a problem with the DOJ with anti trust issues, that’s a weak perspective. They quote Spirit/JetBlue…apples and oranges. No correlation as it doesn’t reduce competition, it enhances it…that said if AK/HA serves MKK and LNY (as has been reported) it’s a slam dunk, the merger cannot be turned down as doing so would reduce essential air service to two communities in dire need of better service. More and more this AK/HA merger is showing new signs of brilliance for both airlines.
Hi John.
Your perspective is always interesting. We asked a Southwest pilot about his take on the acquisition today and he too said it’s a good move. His only regret was that it wasn’t Southwest who had gotten Hawaiian.
Aloha.
Now that would have have had DOJ/anti trust issues (eliminating inter island competition)! Not to mention labor problems. Frontier employees fought off a SWA attempt at merging because the Frontier employees wanted no part of SWA’s history of the arrogance SWA demonstrated when they merged with AirTran. They were the polar opposite of how AK is handling this. SWA likely would have been “Yee Haw, we won!” and simply absorbed what they wanted into SWA and discarded the rest and Hawaii would be left with an inter island operation run from Texas, if approved. The labor problems would have been insurmountable. One more example of how uniquely brilliant AK approached this deal.
I’m quite fond of Hawaiian Airlines. When I fly to Hawaii (usually Oakland-Lihue), I don’t even bother to shop around. I belong to their mileage plan, and I finally got a Hawaiian Airlines credit card. I love the culture of the staff, on both the mainland side and island side, and the culture aboard the planes. They seem to do their best to make flying fun again (yes, it used to be fun). However, I also belong to Alaska’s mileage plan and have flown them recently when I needed to go to Mexico. I have no complaints about Alaska Airlines, but their culture is not as distinctly flavored as HA’s.
The interest payments on $900m in debt made it tough and unlikely for Hawaiian to be profitable. COVID and the Asian market lockdown coupled with the lockdown protocol by the state of Hawaii crushed Hawaiian airlines (And many businesses in the state). Just to cover the interest payments on the debt had to be enormous.
For me, Hawaiian was the airline we took to Hawaii most often. For many who took pride in an airline that preceded Hawaii joining the union this loss likely hurts. And, wishful thinking or not, HAL will likely disappear entirely in several years. Alaska might, as well.
For me, the bigger losses were specific aircraft. First, it broke my heart when the 747 and soon, the 757 were gone. Many airlines have fallen (merged) in my lifetime, but I just hope Alaska keeps the non-stop from Ontario. If not, I will fly as many widebodies as possible from, probably San Diego.
Rod: We always take the Airbus from SAN to HNL to OGG. That is really a comfortable ride. I would be very sad if they discontinued that.
Following the problems of HA here on BOH it seemed that HA was floundering in a sea of post COVID misfortunes and needed help. It seems this merger will make both airlines stronger and able to forge ahead in the Pacific rim markets which is the future. Now if the state of Hawaii gets it act together at HNL we’ll be set into this century for future travelers. Stay tuned
We go to Kauai frequently and over the last 20 years we have traveled to the Islands around 40 times. We have always loved the on board experience with Hawaiian. The people are wonderful. However, we have had problems with flight changes and our experiences with the reservation system since the upgrade began have been horrendous. Once you get people on the phone they do all they can to show the Aloha spirit but its hard to do when you spend multiple hours while they try to complete a transaction. We have been avoiding booking with Hawaiian when we can since then. Maybe after the merger we will go back and see if the system is better and the Aloha has been retained.
I don’t believe Ingram! Hawaiian has been losing millions ever since they emerged from COVID and since then, all they have been doing was spending more money. They gave their pilots a huge pay raise and bought two more 787s.
All needed to keep pilots (and thus keep flying its airplanes- the market dictates that, it is hard to get pilots to come to such an expensive state and compete against other airlines for pay, especially relative to the cost of living, Hawaiian pilots are still paid less than other legacy airlines, Alaska 737 pilots are paid a little more than HA 321 pilots) and keep the company competitive, those were long term decisions for the health of the company (including the 787 which Boeing gave them a deal to sway them from the A350) as was the expansion and diversification into Cargo with the Amazon deal as cargo flying is more stable than passenger and that was a big lesson from COVID.
JC, you’ve made some spot on posts here..I’ll add to to this one. Going forward AK/HA will be able to offer as a career choice for perspective pilots TransPac and likely Europe Widebody (787) flying, Inter island and Intra Alaska flying, Domestic 737 and an Amazon Widebody freight operation that has the potential to grow to to 60 A330 freighters and a quick upgrade to Captain. AK/HA will likely be the best option for career opportunities for prospective pilots compared to DAL/AA/UAL ….they have hired extensively and can no longer offer a quick upgrade. There are a lot of hidden gems in this deal.
Absolutely Right! Spend, spend, spend and hope for the best. Lose money and spend more money never works!