Airbus Deal Opens Hawaiian’s Eyes to New Markets

Hawaiian Airlines has signed a Memorandum of Understanding with European aircraft manufacturer Airbus to acquire up to 25 new A321neos to support a growth in its network between the island archipelago and the US mainland.  The deal, which comprises a firm commitment for 16 aircraft and options for nine more, will represent the arrival of the first long-range, single-aisle aircraft type into the carrier’s fleet and will enable it to better compete on flights to the US West Coast.

"Everyone at Hawaiian wants us to keep our position as the market leader in service quality, cost efficiency and choice of destinations. Ordering the A321neo will secure this legacy on routes to the US West Coast beyond the middle of this decade," said Mark Dunkerley, President and CEO, Hawaiian Airlines.  "The A321neo will be the most fuel-efficient aircraft of its type after its introduction in 2016.  With its slightly smaller size we'll be able to open new markets that are not viable for wide-body service, while also being able to augment service on existing routes to the West Coast of North America."

The new Airbus A321neo will seat approximately 190 passengers in a two-class configuration (First and Economy) and deliveries are due to take place between 2017 and 2020.  Alongside the capacity offering, the major opportunity of the re-engined A320 Family variant is its range with a flight envelope of 3,650 nautical miles rather than just 3,000 on the current production version allowing direct services to easily operate from Hawaii to a range of mainland US destinations.

With multiple flights from the Hawaiian Islands to the US west coast the A321neos can easily be incorporated into the existing schedule to provide reduced capacity during off-peak travel periods.  However, the aircraft will also enable new routes to be introduced, most notably direct flights from the likes of Kona, Kahului and Lihue to the US mainland where demand better suits the operation of smaller capacity aircraft.

Hawaiian is Hawaii's biggest and longest-serving airline, as well as the largest provider of passenger air service from its primary visitor markets on the US mainland.  Hawaiian offers non-stop service to Hawaii from more US gateway cities (eleven) than any other airline, along with service from Japan, South Korea, the Philippines, Australia, American Samoa, and Tahiti.  New non-stop services will begin between Honolulu and Auckland, New Zealand on March 13, 2013, and between Honolulu and Taipei, Taiwan in July 2013.

However, in the past couple of years other US carriers have strengthened their own activities in Hawaii and others, including low-cost carrier Allegiant Air, have ambitious plans for further growth.  The most notable development over the past five years has been the arrival of Alaska Airlines which has introduced many new routes to Hawaii.  The carrier made its debut in October 2007 with daily links to Honolulu and Lihue from Seattle-Tacoma but now offers around 25 flights a day across a network that encompasses 24 routes. 

Through its utilisation of 157-seat Boeing 737-800s, Alaska Airlines has been able to successfully serve a range of destinations across Hawaii rather than depending upon the Islands’ main gateway of Honolulu International Airport.  This month alongside its flights to Honolulu it is offering direct services to Kona from Anchorage, Oakland, Portland, San Jose and Seattle; to Kahului from Anchorage, Bellingham, Oakland, Portland, Sacremento, San Diego, San Jose and Seattle and to Lihue from Oakland, Portland and Seattle.

The Airbus MoU remains contingent upon Hawaiian signing new agreements with its pilots and flight attendant unions covering the operation of the new fleet type.  If new agreements are reached, the fleet expansion is expected to generate roughly 1,000 additional jobs at the carrier.  "This is a significant investment in the future of both Hawaiian and Hawaii.  Our tourism-based economy and local employment will benefit as we continue our strategy of diversifying our business while improving the efficiency of our operation," added Dunkerley.

Hawaiian currently operates a fleet of 43 aircraft, comprised of 25 wide-body, long-haul aircraft (294-seat A330-200s and 264-seat Boeing 767-300ERs), and 18 narrow-body 123-seat 717-200s for inter-island flights.  The carrier has outstanding orders for an additional 13 new A330s for delivery between 2013 and 2015, and six next-generation, longer-range A350XWB-800 aircraft which will arrive from 2017.  The new Airbus widebodies will allow its existing fleet of 16 767s to be phased out over the next ten years.