Turbulent Times Ahead in Hawaii's Air Travel Transformation

Turbulent Times Ahead in Hawaii’s Air Travel Transformation

Significant changes in Hawaii travel are once again on the horizon, and no matter which way things turn out, you can expect a somewhat rocky ride ahead. That given, in part, the potential merger between Hawaiian Airlines and Alaska Airlines, or the very real possibility of a Hawaiian Air bankruptcy without it.

And then there are changes afoot at Southwest, which has already seen a reduction in their Hawaii flights by one-half since its bold island launch five years ago. The developments that are about to unfold promise to reshape the air travel landscape in Hawaii as we know it.

With or without a merger, Hawaii air travel is about to change significantly.

The proposed merger between Hawaiian Airlines and Alaska Airlines is set to be a game-changer for Hawaii air travel no matter how it turns out. And on that point, we should have word from the US Department of Justice within about one month.

If it is successful, combining the strengths of both airlines could lead to a more extensive and robust network with a plethora of improved services.

However, keep in mind that this merger faces significant regulatory hurdles and legal challenges. If it is successful, it could also mean better connectivity and potentially lower fares, but it also raises questions about competition in some markets and airfare prices. And if the merger doesn’t pass regulatory muster, then there’s an entirely different reality that we’re about to face.

Federal Lawsuit By Renowned Airline Law Firm Seeks To Block Alaska/Hawaiian Deal

Hawaiian and Alaska Airlines merger will yield turbulence.

The potential merger between Hawaiian Airlines and Alaska Airlines will undoubtedly have a big impact Hawaii air travel. But, without the successful merger, a very real prospect, Hawaiian Airlines faces the likelihood of a third bankruptcy, adding financial instability to the Hawaii air travel equation. Zacks said last week, “The company does not have enough cash to meet its debt burden, raising liquidity concerns.”

If the merger is approved to proceed, Alaska Airlines will implement wide-ranging changes necessary for compatibility, sustainability, and growth. These changes could include route adjustments, new systems, staff restructuring, and policy overhauls, impacting both travelers and employees.

Southwest Shakes Up Hawaii Travel With Big Fare Game Changes

Southwest Airlines: the wildcard in the Hawaii mix.

Southwest Airlines entered the Hawaii market with great expectations, offering affordable fares and a customer-friendly experience that both residents and visitors were excited about. However, over time, the airline has reduced its Hawaii flights by approximately 50% as it moves strategically to optimize routes and manage costs amid fluctuating demand and a volatile situation ahead. As the wildcard, Southwest’s future actions remain unpredictable, potentially reshaping market dynamics in unexpected ways.

Recent developments at Southwest Airlines impacting Hawaii include a possible leadership change that could see the appointment of Andrew Watterson, a former Hawaiian Airlines executive, as the new CEO. Watterson’s deep understanding of the Hawaii market has and could continue to influence Southwest’s strategy significantly. Alongside this leadership change and pressure from large investor Elliott, Southwest is on the cusp of introducing redeye flights from Hawaii, aiming to maximize resource utilization and compete more effectively with the other five airlines in our key markets. These moves speak to the airline’s commitment to adjusting strategies in response to market demands and internal challenges.

The future of air travel in Hawaii.

As the air travel industry in Hawaii undergoes these upcoming changes, travelers are wise to expect a period of adjustment. Any potential merger, together with strategic shifts by the other major airlines, will reshape the future of air travel to and from the islands. That focus will hopefully bring enhanced customer experience, more competitive pricing, and expanded connectivity.

Hawaii’s air travel landscape is undoubtedly on the brink of major transformation, driven by this potential merger, together with strategic adjustments by the other key airline players, especially Southwest.

What do you see ahead in Hawaii air travel?

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28 thoughts on “Turbulent Times Ahead in Hawaii’s Air Travel Transformation”

  1. Your site and others have been reporting HA’s loss run rate at about $1mm per day!
    Since the last quarterly report, I’m sure on a daily basis, the average daily loss rate is higher with increased costs (fuel, salaries, maintenance, etc.).
    If the Justice Dept. doesn’t move forward quickly with an answer – I’m afraid HA may not be able to continue to fund its operating losses.
    I could see Barclays giving them a mini cash bailout so to speak to get them over the merger hurdle – or even Alaska (with approval from Justice) by loaning HA an immediate cash infusion to continue operating. I can’t even imagine what the HA ELT team must face during their morning pow-wows.

    Scary days ahead!

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  2. BOH
    Rob and Jeff. Just heard on the local news how a Boeing whistle blower just disclosed that the Boeing 787 Dream liners was leaving the production line with holes in the front fuselodge and should have been sealed up. Now calculate the situation on how this will affect future Hawaii travel as the next replacement to the 737max series planes? Any answers yet?

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  3. Earlier this year Southwest reported a $231 Million loss and they laid off 2,000 employees.
    Today Southwest projected a revenue decline of 4% to 4.5% for the second quarter.
    They also projected a 7.5% increase in operating expenses.
    Not a good look

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  4. Grew up with a story of passengers on the ship with tears on there face because the site of diamond head and the island was so beautiful ,this was 1938,I didn’t make it over until 1976 via united, Hawaii will always be the diamond in the rough .david

  5. Love hawaii. Have only been there 3 times despite travelling lots or a fair amt. Miss non stop flights from manitoba canada. 1st went years ago on wardair. As good as it could be. Muss that airline so very much. Always stayed at the waikiki sand villa hotel. Back yrs ago it was called the rhamada inn.

  6. In the airline business size matters. HI’s current P&W engine problem is due to the fact their much larger competitors have much more flexibility and their own engine shops. HI decided a couple of years ago to compete with the largest airlines in the country on long haul routes and didn’t consider any of the risks they are now experiencing.

    Happens all the time.

    Sir Richard Branson once said “The best way to become a millionaire in the airline business is to start with a Billion $.

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  7. We need to remove the foreign ownership ban on owning an airline. An As merger will only lead to axing flights, layoffs and of courze much higherr fares esl out of the SEA mkt. You just have to compRd SEA vs anybCa mkt to see fares out of the pnw are 50% or more expensive

    If a big foriegn airline lime a cathy or japan airlines took over have would see better service and lower fares.

    3
    1. That is so not true. It needs to stay in US ownership. Next thing you will want is China to own it . How foolish . Better yet , you might want to learn to
      speak Cantonese or Mandarin real quick.

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  8. I had a bit of a forward look at next year’s long haul flight schedule today. I purchased a F/C return ticket from HNL back to the S/E for next May on AA for $2024 – got the only promotional fare apparently, the seats are now $2324 on the site. Very little in terms of widebody nonstop flights available. Delta and AA only had one each nonstop and AA additionally had one codeshare w HA that went from HNL to OGG to DFW. There was the usual assortment of A321 NEO flights with 2-3 stops that I won’t take, but even these seemed much reduced in numbers. Overall the smallest number of choices I’ve seen since COVID. Seems the industry may be expecting a slowdown at this point.

    Best Regards

    1
  9. We’re already booked out of Long Beach with HA April 2024 with air miles. Im hoping no matter the decision they continue through with flights already booked prior to the merger

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  10. The personal political agenda comments don’t seem to rational. As you well say I think the spectre of an HA bankruptcy is the worst scenario for the market. There doesn’t seem to be any public comment from the DOJ against the merger (correct me if I’m wrong but I believe the JetBlue /Spirit decision was no surprise) seems they may be well aware of the reality of this merger. Combining the synergies of HA and AK will be very good for the consumer if Alaska proceeds as they have promised to. Should be a greatly enhanced upgrade to air travel to Hawaii when done.

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    1. Hi John.

      No comment from DOJ yet. The current HA stock price and some analyst comments, however, aren’t reassuring.

      Aloha.

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      1. I guess anybody that actually does know anything can’t say anything for obvious reasons…my take is anything we hear is speculation and of course there is always people with an agenda that like to speculate! 🙂 It will be interesting for sure but for the sake of the future of air travel to Hawaii I hope the deal goes forward as planned. A decision a month from now seems in line with the more positive predictions and echos what Ben Minicucci said early days

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  11. Ironman sucks up capacity to all HI destinations from the mainland. I’d say if you don’t have flights, a car and a room by now you may be outa luck.

    1
  12. Hard to understand how the merger, eliminating one carrier, will create more competition and lower fares, as BOH claims. The laws of supply and demand say otherwise. Add to this the horribly misguided policies of Bissen and Green, savaging the tourist industry, and the economics of air travel here only get worse. Buckle up. It’s going to be a bumpy ride.

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    1. I think what they mean is that a strong merged airline will provide more options (supply) than a bankrupt Hawaiian Airlines and a separate Alaska Airlines.

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      1. That doesn’t compute. “A strong merged airline” will have more ability to raise prices (not lower them) and reduce benefits (not increase them) for travelers to Hawaii. A better option would be for the state to subsidize HA until it can get its act together. The most likely outcome of the merger will be fewer Hawaii jobs, as management, maintenance, and staff here go away. Any savings to Alaska will go to their bottom line, not passenger pockets.

        8
        1. Larry, that would only be true if there wasn’t any other competition. The Hawaii market is the most competitive in the industry and unlike the Spirit/JetBlue deal, there is minimal overlap. A HA/AS combination creates a healthy carrier that can compete and actually flourish in the market as well as create new opportunities throughout the Pacific Basin. I don’t think UAL DAL AA SWA etc are going anywhere. They will have to step up their game to compete with HA/AS though….good for the consumer this merger is.

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  13. Well written overview. Another factor is demand. The current state of STVRs, if mishandled by Hawaiian politicians could severely reduce air travel as thousands of middle class visitors find they can no longer afford to visit the islands. This drop in demand will cause all of the airlines to quickly adjust their frequency, destinations and pricing, leaving full time residents with a big downgrade in air service.

    So as the current discussion evolves, voters need to understand that severely curtailing affordable STVRs will not only raise their on-island cost of living but will cause this collateral damage to their air travel to, from and between the islands. The current STVR cancellation approach is not the only one that will work but if those that are pushing it get their way, voters can kiss today’s competitive airline situation goodby.

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  14. I don’t think this government wants big businesses to succeed and will block the merger. But it is an election year so that could make a difference.

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    1. Isn’t it the other way around? Eliminating vacation rentals, small business, might force visitors into hotels, big business.

      3
      1. Eliminating more affordable TVR’s will push visitors to expensive hotel rooms?? Tourist dollars are very portable. They will simply go elsewhere. Hawaii isn’t so important to families that they will pay 30% more for a hotel room with no kitchen, private bedrooms or laundry facilities.

        1
  15. Aloha,
    We are planning a trip to the Big Island this fall. With your latest insight to Hawaiian Air’s unknown future, do you think it’s a good idea and safer bet to fly American, United or Alaska instead?

    Also, does anyone know if it’s best to not visit the Big Island in October due to the Ironman race’s influx of travelers, increased traffic’s and crowds?

    Mahalo BoH for your many very helpful years of news and updates!

    5
    1. Hi Mignon.

      Thanks! A suggestion might be to just wait a month until we learn more based on word from the Justice Department.

      Aloha.

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