A Decade of Change In Hawai’i

I realize that Hawai’i is so far west that it’s off the radar of much of the country, but it’s always top of mind for me. Having vacationed there often as a kid (and going back for the first time in seven years this September), I’ve always paid close attention. Over the last decade, it’s been an incredibly exciting place to watch.

Think about what the market was like ten years ago. Hawaiian and Aloha were the two big interisland carriers, as had been the case for decades. Aloha had just started flying to the mainland. Hawaiian had recently replaced its DC-10s with 767s but still mainly flew the big airplanes to large cities on the West Coast. The big legacy carriers had their usual service to Hawai’i, much of it focused on Honolulu. Low cost ATA also had a fair bit of service in the market as did the odd charter carrier.

Logos of Hawai'i

Since that time, the market has been turned on its head. In the interisland market, Aloha went under and Mesa used shady tactics to take its place with go! in the interisland market. Others tried to grow and then retrenched (Island Air). Still others (Mokulele and go!) partnered, and then broke up.

To the mainland, things changed even more quickly. With Aloha and then ATA gone, there was a big opening in Hawai’i. Alaska Airlines filled it and now has a ton of service in the market. More and more service shifted to the outer islands to the point that it’s fairly rare to find a widebody to Hawai’i at all, unless you’re on Hawaiian.

Hawaiian has seen the most remarkable change of all. In the interisland market, it is now the undisputed king. go! is just a minor annoyance. Now, it is looking to cement its place even further by expanding back into a market it served years ago with Dash-7 turboprops. Buried in a recent release about interisland fare changes, Hawaiian noted that it has “signed a Letter of Intent to acquire turbo-prop aircraft with the aim of establishing a subsidiary carrier to serve routes not currently in Hawaiian’s neighbor island system.”

The market to places like Lanai and Molokai along with smaller cities on the bigger islands has been dominated by the likes of Island Air (with whom Hawaiian currently codeshares) and smaller players like Mokulele and Pacific Wings. Now Hawaiian wants a piece of that too.

But the most remarkable change has been in the long haul route network. Hawaiian’s operation to big west coast cities remains, but it has been surrounded by other opportunities. Hawaiian started pushing into other cities like San Jose and Sacramento. But it also looked elsewhere in the world.

With its recent announcement of service to Auckland, Hawaiian has continued to grow the Pacific Rim. Other than Sydney next door, there’s now also Manila, Tokyo, Sapporo, Osaka, Fukuoka, and Seoul. Many of those North Asian cities are really made possible by the introduction of the A330, an airplane with longer range to help Hawaiian grow into these lucrative new markets.

But it’s not just about growth around the Pacific Rim. Hawaiian is also experimenting beyond the Western US and has pushed into New York. That might sound like a gamble since New Yorkers more frequently fly down to the much-closer Florida and Caribbean markets, but Hawaiian thinks it can make a go of it. It’s being smart about it and flies into JetBlue’s Terminal 5. It has also put together a partnership with JetBlue to feed its flight from around the Northeast.

The result is a dramatically different airline than what we saw just a decade ago. Will this all work? Maybe not. But it doesn’t have to as long as some of it does. There’s nothing wrong with trial and error, and this is an airline that seems to be willing to take some chances. I’d love to get into greater detail with them about their strategy, but I’m afraid I have never received a response from the PR folks over there so I stopped trying. But it’s still a lot of fun to watch from afar.

Hawaiian isn’t the only story in Hawai’i these days. Island Air has just announced big changes itself. I’m hoping to speak to the CEO over there sometime soon to get more detail about plans to compete in this fast-moving market. And the market isn’t done shifting.

Southwest has said it will fly to Hawai’i one of these days. Rumors have swirled about Virgin America working on it as well. And then of course, there’s Allegiant, which is finally starting up from small cities to Honolulu. I can’t even imagine what it’s going to look like in another decade.

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