Hawaiian Airlines: The gap in the network rebuild and what’s next for New Zealand after 10 years of flying

Hawaiian Airlines operates Airbus A330s on the Auckland-Honolulu route. Photo / Supplied

As Hawaiian Airlines rebuilds its network, one part of its operation is exceeding pre-pandemic levels while “a gaping hole” remains in another.

The airline this week celebrates 10 years in the New Zealand market and is flying at greater than pre-pandemic levels to its 15 mainland United States destinations and a little under pre-Covid levels to Australasia, but its Japan market hasn’t yet recovered.

In its latest quarterly financial update, the airline said it was operating at 91 per cent of its 2019 capacity - 115 per cent in North America, 79 per cent in the Hawaiian islands and 44 per cent on international routes.

Theo Panagiotoulias, senior vice president of global sales and alliances, said load factors to the US mainland were at the high 80 per cent level and running extremely strongly. Total passenger revenue in the fourth quarter of 2022 was up 29 per cent, on 9 per cent more capacity to the US.

But in Japan - one of the last countries to open its borders – many nervous would-be travellers are still not flying. The airline’s capacity was around 69 per cent of pre-Covid levels in that critical market and it was unclear when it would recover.

Hawaiian Airlines flies between Auckland and Honolulu three times a week. Photo / Supplied

“The gaping hole is Japan. [It] is taking a lot longer to recover. It’s a more risk-averse culture,” said Panagiotoulias, who lives in that country.

“We feel that it will be back eventually. It’s very unclear when we can expect it to recover.”

Average weekly flights between Japan and Hawaii are running at 21, compared to 32 pre-Covid.

In New Zealand, Hawaiian resumed flying last July after 833 days without a passenger flight because of the pandemic.

He said demand on the route between Honolulu and Auckland had been particularly strong over the three months from November – including inbound mainland US travellers connecting through Honolulu and coming to this country.

Now there are signs that demand for Hawaii among Kiwi leisure travellers is beginning to slow.

“Now that the pent-up demand has gone and we’re looking at a more consistent level and we’re not back at 2019 volume levels.”

Before the pandemic, the airline flew up to five times a week, but was generally down to a three-a-week frequency. Any increase would depend on demand growing.

“The challenge is that we get some fairly significant troughs throughout the year – we put on additional frequency and then take it off,” Panagiotoulias told the Herald.

This year the airline would look to stimulate untapped segments of the Kiwi market.

“It’s driving that level of awareness and targeting specific, niche parts of the market that have the flexibility to travel at certain times of the year.”

The strong US dollar meant the spending power of travellers from other countries had taken a hit, but he said many were able to look beyond that and see the unique features of Hawaii as a destination.

“Overall demand has held up pretty well relative to the currency. I think that is a lot to do with the value proposition of the destination. And then out the US, you have the opposite effect.”

Hawaiian Airlines competes directly with Air New Zealand on the route and airfares are a long way from what have been described as the “crazy” levels of 2019.

Panagiotoulias said lower fares were one lever that airlines can use, but “price can be one but it’s much broader than that”.

One of those levers is pushing Honolulu as a connection point, or stopover, for New Zealanders to fly to the mainland after just an eight-and-a-half-hour flight from Auckland.

Theo Panagiotoulias, Senior Vice President of global sales and alliances at Hawaiian Airlines. Photo / Supplied

The airline’s US mainland destinations include main entry points such as Los Angeles, San Francisco and New York, but also others such as Las Vegas, Seattle, Portland, Austin and Boston.

Hawaiian offers up to 12 same-day connections for Kiwi travellers to mainland destinations through Honolulu, where the airline’s terminal upgrade had improved the security clearance process for passengers.

The most popular mainland cities for Kiwis during the past decade are (in order) Los Angeles, San Fransisco, Seattle, Portland and Phoenix.

During the past 10 years, Hawaiian has carried 68,498 passengers from Auckland to Honolulu and 74,455 in the other direction.

When it entered the market it led to a plunge in fares from Air NZ on the route which was under-served after airlines started flying over the islands in the 1980s.

Air New Zealand now operates Dreamliner aircraft to Honolulu and Hawaiian continues to use Airbus A330-200s.

Panagiotoulias said the last 10 years flying to New Zealand had been a “great adventure” for the company.

“There’s much work to do coming out of the pandemic and we’re going to everything we can to drive the attractiveness of Hawaii as a destination and the connectivity to the US mainland.”