Unraveling Hawaii Airfare Secrets: Inside Dynamic Pricing

It was just a couple of weeks ago that Hawaiian Airlines had a sale offering good prices in the low season from now up to spring break. But that was then and now it’s a somewhat different story. Below is a comparison of the earlier prices and those the airline is promoting today. We also are noting the cheapest fare our research found in each market, regardless of airline. Then read on for what all of this means.

The fares below are the cheapest one-way Basic Economy.

Prices marked “Previously” are from the last Hawaiian Airlines sale on January 12, 2024. All fares require round-trip purchase.

• Kona/Oakland Currently advertised: $148. We found: $122. Previous sale $96. Southwest Airlines currently $157.
• Lihue/Oakland Currently advertised $137. We found $100. Previous sale $96. Southwest Airlines currently $154.
• Maui/Los Angeles Currently advertised $144. We found $96. Previous sale $97. Delta Airlines and United Airlines currently $96.
• Maui/Oakland Currently advertised: $99. We found $99. Previous sale $100. Southwest Airlines currently $99.
• Maui/San Francisco Currently advertised $125. We found $100. Previous sale $100. United Airlines currently $99.

What did we learn from this week’s Hawaiian Airlines airfare promotion?

1. “Advertised” airfares may or may not be the best fare in that market. The reason is that airlines are required to have a minimum percentage of seats available to promote a sale price. So, by doing research as we did, you can find lower fares that cannot be promoted due to more limited availability.
2. For multiple reasons detailed below, airfares can change immediately after a sale is published. While these are a general indication of pricing, they require further investigation, including Google Flights, plus Southwest Airlines (since they don’t participate in Google Flights).

Why Hawaii airfares and promotions vary so much from one week to the next.

Supply and demand.

Airlines adjust their prices up to five times daily based on ever-changing supply and demand. Price drops serve to stimulate demand during off-peak times. But during peak Hawaii travel seasons, such as the upcoming spring break next month, prices increase significantly.

Seat availability.

The number of seats available on any given flight will impact price. As flights fill up, airlines modulate prices up for the remaining seats. On the other hand, when seats are unsold as the departure date gets closer, airlines will lower prices in order to fill them.

Buying in advance.

Previous theory was that booking flights far in advance tended to result in lower Hawaii airfares. That can sometimes still be true, such as advance purchase for lowest demand seasons of late summer to fall, and late spring. Airlines often offer discounted prices for travelers who book tickets right before flying when seats are still widely available. On the other hand, it is a cat and mouse game, since as the departure date approaches, prices can also increase.

Airline costs.

Fluctuations in costs can and will continue to impact airfares. When fuel prices rise, airlines may increase fares to cover costs. And when airlines have huge pay increases, as has been the case recently with pilots and other staff, they will try their best to raise prices to again cover those costs.

Competition.

The level of competition on particular Hawaii routes influences airfares significantly. California gateways to Hawaii virtually always have the very cheapest airfares. That is because multiple airlines operate flights on the same Hawaii routes, driving them to engage in competitive pricing and lower fares. However, in cases where fewer airlines dominate a Hawaii route, it may have better control over ticket pricing. That can be seen, for example, in the Pacific Northwest.

Economic factors.

Economic conditions, locally and globally also affect airfares. That was seen widely during and after Covid where Hawaii airfares were at all-time lows as airlines sought to attract customers. On the other hand, when people are more willing to travel due to economics, higher demand and higher Hawaii airfares are likely.

Continuous dynamic pricing: Mastery of revenue management.

More than any other tool, this is the ace up the airlines’ sleeve. Airlines now use the most sophisticated of dynamic pricing algorithms, evaluating historical booking data, competitor prices, and customer preferences, to make real-time adjustments to Hawaii airfares. This lets airlines maximize revenue by pricing tickets based on a myriad of market conditions.

Airlines have long been skilled at adjusting Hawaii airfare pricing to match our willingness to pay, using sophisticated revenue management. Recently, Southwest Airlines, a prominent Hawaii player, announced advancements in revenue management similar to Alaska Airlines’ earlier moves.

Southwest aims to optimize revenue (raise prices) by targeting last-minute travelers.

The full effect of Southwest’s revenue management overhaul for Hawaii flights is expected to materialize this year. Employing dynamic pricing, airlines leverage individual data, device information, and a multitude of contextual signals to adjust fares continuously. Tools like Southwest’s and Alaska’s “Architect” facilitate granular pricing analysis, allowing airlines to remain competitive and maximize profitability.

Hawaiian Airlines would acquire Alaska Airlines state-of-the-art pricing tools in merger.

If Hawaiian Airlines is successfully acquired by Alaska Airlines, they will also step up to the latest real-time dynamic pricing tools used by Alaska Airlines.

Dynamic pricing means that flight prices are subject to constant fluctuations based on demand, competitor pricing, and consumer behavior. Additionally, ancillary charges, such as baggage fees and seat selection, are also now becoming dynamically priced, better contributing to airlines’ revenue streams.

Is there a way to use dynamic pricing to your benefit?

Travelers can leverage airline dynamic pricing to their advantage with a number of strategies:

Flexible Hawaii travel dates: Since prices fluctuate constantly, ability to be flexible with travel dates can lead to finding the lowest fares. Traveling during off-peak seasons, or days of the week, will also frequently help achieve lower prices.

Book either in advance or last minute: At these two ends of the spectrum the best deals are typically found. In the last weeks to months before departure, airlines will adjust prices depending on unsold seats. Keep checking and book when fares drop.

Use tools that predict airfares: Tools like Hopper and Google Flights can help by analyzing trends and historical data to forecast whether prices are high or low, and are likely to go up or down. These may inform you about the price point and timing for your Hawaii airline tickets.

Clear browser cookies: There was a time when that might have helped. That is no longer likely to be the case, however.

Sign Up for price alerts: These can notify you when prices drop for a given routes or dates of interest. We use Google Flights.

Consider flying from alternative airports. Alternative routing can lead to lower fares. Whether that means flying into a different Hawaii airport or out of a different mainland gateway. When it works, such flexibility can open up more pricing options.

Use airline loyalty points for tickets: Frequent flyers can use airline programs to earn miles to be redeemed for either free or discounted Hawaii flights.

Avoid non-changeable airline tickets: Expect ongoing changes in airfare prices and consider avoiding restrictive fare options to retain flexibility. As airlines refine these strategies, travelers can anticipate further developments in pricing dynamics.

In summary.

By staying informed about pricing trends, remaining flexible with travel plans, and utilizing available tools and resources, travelers can potentially navigate airline dynamic pricing to continue find the best Hawaii deals and maximize savings on their flights to the islands.