If there’s one good thing that’s come out of this pandemic for the airlines, it’s a renewed willingness to experiment. With the exception of Delta — which doesn’t seem interested in trying anything new on the network side — airlines have all been looking at wild new ideas to see what might stick. Desperation breeds creativity, and some of these efforts can result in long term gain. Hawaiian is no exception to this, and it has recently announced four new routes which come with varying degrees of risk.
I’ve already written this up in Cranky Network Weekly, but I decided I had more to say than that format will allow on the two riskiest new routes. Both Long Beach – Kahului and Ontario – Honolulu fit into solid, existing strategies, so there’s no need to dig into that. But Orlando and Austin? Oh yeah, there’s a lot to talk about.
Orlando – Honolulu 2x Weekly Starts March 11
When I saw that Hawaiian was going to fly to Orlando, I had to read it again to make sure I had it right. On the surface, this seems like a ridiculous idea, but underneath there is method to the madness.
Hawaiian will fly this route twice a week. The airplane leaves Honolulu at 5:15pm on Thursdays and Saturdays. It arrives Orlando the next day at 7am. The airplane then sits 25 hours and 15 minutes in Orlando before flying back to Honolulu at 8:15am on Tuesdays and Saturdays. It gets back to Honolulu at 2:05pm.
That is an incredible amount of aircraft time to spend on this route, but aircraft time is something Hawaiian has in spades right now. Demand is low. Very low. In particular, Hawaiian isn’t flying much internationally at all, so it has a lot of A330s sitting around with nothing better to do. The idea of sitting an airplane on the ground in Orlando for 24+ hours would have seemed insane before. But now, that airplane isn’t needed anywhere else, so there’s no need to hurry.
Just because you can leave it on the ground for so long doesn’t mean you should. So why is Hawaiian doing this? Well, they can use the same crew to fly the airplane back when they do it this way. The flight from Honolulu to Orlando is blocked at 8h45m with the return at 10h50m. Crews need longer rest periods after such a long flight. If that Saturday flight arrived Sunday and turned right around, they’d need another crew to fly the airplane home. The first crew would then be in a hotel until the new flight back a few days down the line. By keeping the crew with the airplane, they just need one night in a hotel and one less crew away from home. It lowers costs… as long as you don’t need the airplane elsewhere. And Hawaiian doesn’t.
This explains why it’s being scheduled the way it is, but it still doesn’t explain why Hawaiian would want to fly this route at all. I’ve always assumed that most people in Orlando are going to the Caribbean since it’s so close. How was this one of the next flights on the airline’s wish list?
Boy, was I in for a surprise. I turned to Cirium DOT O&D data to find out what traffic looked like on this route in 2019. It turns out that Orlando is the second biggest market on the mainland that didn’t have nonstop service to Hawai’i. (The first, for the record, is Baltimore.) Orlando had 155.9 passengers per day each way in 2019, and that is remarkable to me. Thrown in another 70 from Tampa, many of which would likely drive the couple hours for a nonstop option, and you have a pretty sizable base. How does it break down by airline?
2019 Daily Passengers Each Way Between Orlando and Hawai’i
It’s no surprise that it’s the big three who carry the travelers via their inland or West Coast hubs, but I was surprised to see United having the highest share. This is good news for Hawaiian, and I’ll talk about that at the end of the post in greater detail as to why.
Not enough to get you thinking this is a good idea? Let me give you one more stat. Again, looking at the DOT O&D data via Cirium, here are the top mainland markets with more than 15 passengers per day each way by percent of traffic that originates in Hawai’i.
2019 Percent of Traffic Originating in Hawai’i By Destination
Las Vegas is far and away the winner, and that is in no way surprising for a place that Hawai’i residents affectionately call the Ninth Island. Hawaiian has long served that market well with schedules that appeal to locals. Washington/National is going to be government/military traffic, but that’s not an airport Hawaiian could serve even if it wanted to. Then there’s Orlando right there at number three on the list. I guess the locals don’t think Disneyland can cut it, so they head over to Orlando to see the mouse.
Regardless of the reason, what this does is make it easier for Hawaiian to sell that flight. It has no brand loyalty in Florida, but it has plenty in Hawai’i. And if it can fill up more than a third of its seats with local residents, then that’s already a big step forward. The more I look at the numbers, the more I like this idea.
Austin – Honolulu 2x Weekly Starts April 21
On the surface, this Austin flight may seem similar, but there is a very different dynamic going on there compared to Orlando. Think of it this way. A whole lot of Californians have moved to Austin over the years, and those are people with an affinity for Hawai’i. So, Hawaiian has set up service to mimic what they could have had back on the West Coast.
The flight departs Honolulu at 10am Wednesdays and Saturdays. It arrives in Austin at 10:10pm. The next morning it leaves at 10:10am and gets back to Honolulu at 1:30pm. You’ll undoubtedly notice that this is a daytime flight from Hawai’i. Until this, there were no daytime flights going further east than Phoenix.
This can work two ways. There are some people who prefer the redeyes, and today almost all of their options involve one. They won’t care about this flight. But for those who don’t like redeyes, the only other option is to do an early morning flight to the West Coast, connect, and get home late at night. That only works from Honolulu. Now, there’s a much simpler option that works from all the neighbor islands as well. It’s going to have strong appeal for those people who really don’t want redeyes. (Think families with little kids, a significant portion of Hawai’i traffic.)
This lets Hawaiian try to capture a time-sensitive segment of the market, but it also does something else. It helps Hawaiian be more efficient with crews. If it were to fly a redeye and then turn the airplane back around, it would need one crew for each flight, and as in Orlando, they’d have to sit around for awhile in Austin. But this way, the crew that flies in that night can fly it out the next morning, exactly 12 hours later. It’s a shorter flight, so less rest is required.
I’ve heard some say that this isn’t very good utilization with a 12 hour sit, but that’s the historical norm for West Coast flying. Airplanes arrive in the evening, spend the night, and fly back out the next day on nearly all flights. In this case, utilization isn’t a big problem.
Do enough people want to fly to fill this up? Anecdotes are nice, but data says… yes as well. Remember I said Orlando was the second largest unserved mainland market? Well, Austin is the third with 144.5 daily each way. You have to also consider San Antonio, however, which adds another 88.5. I’d assume at least some of the good people of San Antonio won’t mind the drive to get a nonstop.
Today, here’s how it breaks down by airline:
2019 Daily Passengers Each Way Between Austin and Hawai’i
Unsurprisingly, this is American country, and American has the largest share. But take a look at United in second place, following its first place finish in Orlando. That is remarkable. In 2019, United carried only about 13 percent of Austin passengers overall and 9 percent in Orlando. This shows just how strong United is in Hawai’i to pull off these market share numbers. But it also suggests these people aren’t United loyalists and are just going with the best option for the Hawai’i trip. With no loyalty clouding judgment, that should create a great opportunity for Hawaiian to pull traffic.
There’s a lot to like in these new markets, but they are unquestionably risky. The difference is that when you have airplanes sitting around with nothing better to do, the level of actual risk decreases markedly. The needle then shifts to, “well, might as well take a swing and see what happens.” That makes this a whole lot of fun to watch.
What a great article.
HNL-AUS makes sense, given AUS’s growth and the benefit of being able to bypass DFW/IAH to get to Hawaii, but MCO??? That’s just nuts.
HNL-MCO is wild. When I first saw it on Twitter, I thought it was satire.
I’d love to see DL try some “creative” routes. We have excess capacity, labor, and assets; covering DOC’s on a route here or there wouldn’t be too difficult. Upper Midwest to “anywhere sunny” doesn’t take too much of a leap of faith.
Remember a few months ago where I tried to argue a layman’s case for Southwest to come to Fresno? And you and pretty much everyone else sneered?
I was thinking that was going to be todays story.
I’m kinda surprised Brett didn’t cover this today as well. It is huge news for Fresno.
Yeah it’s surprising to me that Southwest didn’t fly to Fresno. I am sure Cranky has explained why before. They didn’t announce to WHERE though, so it’d be hard to say what made them pull the trigger until they do.
My bet would be that initial routes from FAT will be to PHX, LAS, DEN, and maybe MDW and SEA.
I doubt anything intra-California will be offered, though I’d love to see LAX, SNA, and ONT.
A good pick-up on the possibility of San Antonio people driving to Austin for the Hawaiian flights. Currently very easy drive for those in northern San Antonio and suburbs (yes, San Antonio has suburbs). If TxDOT ever rebuilds I-10 east to the 130 Toll Road’s terminus near Seguin, all of San Antonio will be in play.
Don’t forget that the State of Florida is open for business right now while California and others are not. If you’re in Hawaii and the kids are screaming for a vacation all 4 parks at Disney World are open, on top of all the other crap in the Orlando area. I’m sure that was discussed when setting up this route. Once everything opens back up and we get back to something resembling more like 2019 I’m no so sure this holds.
Orlando / Tampa area aren’t the covid hotspots either. In fact, Disney World is in the Four Corners part of Central Florida- being where 4 counties come together. Orange, Lake, Polk, and Osceola County (a majority of hotels are actually IN Osceola County). When you go look at the covid stats for Florida counties, Orange County is maybe 1/4 of the counts in Miami. Lake & Osceola County are then 1/4 of Orange. Polk is its own animal, thanks to Lakeland and FLORIDUH type people. But when you see the true COVID stats, the parks are NOT a cancer cluster and spreading rona like wild fire. If Rona was such a massive spreader in the parks, we’d see HUGE numbers of Covid-19 in Lake & Osceola Counties. But its not there.
So, yes, I have chosen to spend weeks at a time in Florida and enjoying the parks, the pools, the bars, and live music and restaurants while significant parts of our country are locking down businesses and people. Hawaiians are also VERY tired from their heavy-handed lock down orders and are now leaving the state for vacations to get away and search for “normal”. That happens to be Florida right now.
(for the record, I am a Disney Annual Passholder and have been to the parks maybe 15 or more times since they reopened in July. I also flew 80k+ miles and didn’t get rona until I was in my home state and had lunch with a friend that’s an ER nurse at one of our major hospitals… go figure.)
AUS is actually WN country, as we often read.
WN just didn’t carry Hawaii traffic because they haven’t built their schedules sufficiently to connect traffic from Texas to the Aloha state.
WN is also the largest airline at MCO and the same principle applies. They just haven’t grown enough outside of the west coast to matter in most of the rest of the US.
And HA’s goal might be to start flying to some of the interior US points where demand is large enough to get a jump over carriers that carry traffic via connections.
There is actually an pretty strong relationship between carriers that are starting new routes and their cash burn. DL happens to have one of the lowest cash rates as a percent of revenue while B6, which has been by far the most aggressive at adding new routes has a cash burn rate about 6X higher. In a low demand period, remaining focused on serving your own markets and being prepared to take market share from weakened carriers AFTER covid has passed is far more prudent than starting a bunch of market share wars esp. with multiple carriers. HA’s drop in revenue was one of the steepest as a percentage of a year ago.
HA’s aircraft that would have been used to serve Asia and the S. Pacific work well flying to the interior and eastern U.S.
Sounds like you are bitter about B6 adding in RDU. DL’s cash burn numbers don’t include debt payment and severance. With those included, it’s numbers are pretty close to UA for Q4. And not that much better than AA. It’s certainly not industry leading by any stretch of imagination.
Cash burn numbers are a lot more comparable between airlines than you would like to think.
DL’s interest expense before covid was half of UA’s and one-third of AA’s. Cash burn right now determines how much of that cash that any airline has borrowed will be used. DL is burning less cash as a percent of costs than any other big 4 airline plus B6. Given that 3 of UAL’s hubs are in aggressively locked down cities/regions, that is not surprising.
As noted, Hawaii looks relatively positive in terms of remaining open. Mexico is more open but it is risky. Hawaii is a low risk warm-weather destination right now.
This article is about HA but let’s see how any of these new markets work out, including RDU. HA is responsibly adding new routes where no one else is offering nonstop service. That is not the case for the other large announcement today, including doing it in 3 carriers’ major markets.
If you can look through industry history books and let us know how HA vs. B6′ market adds have worked out, I’ll tell you HA has a far better chance – and CF rightly calls it risky.
with interest/debt + severance factored in, DL did worse than WN and UA in both Q2 and Q3. Let’s see what happens in Q4. JetBlue made its moves because the bookings in JFK/LGA/BOS are paltry and it has to move into other markets to get revenues. So it might as well make strategic moves into markets where it thinks it can do well or want to expand in.
It looks like after several weeks of reduced bookings and rising cancellations, the vaccine news are starting to drive people to book flights for next spring/summer. That’s what these add are about.
“I think we can agree that there are several things that don’t contribute anything positively.
– 1. repeating the same thing over and over
– 2. personally attacking others
– 3. writing about topics in our replies that aren’t part of the original article
– 4. inappropriate hyperbole, if I dare say, including jokes about airplane crashes
– 5. checking to make sure there facts or questions that have not been addressed and not basing what I say on hearsay and rumor.”
Per your not contributing positively post yesterday, Tim.
You again brought up Delta’s cash burn marketing stat (and it is that; they all measure it differently and usually to look most beneficial to themselves; that’s why plenty of wall street analysts normalize the stat) as you do all the time without any correction for how it even compares apples to apples with other public cash burns — violation of your rule 1, 3, and really 5 too. Nobody brought it up. You just wanted to say delta is awesome, as usual.
We know why you replied to “AUS is AA country”. Because anything good (as though the comment even was) about AA drives you insane for some reason. Violation of your rule 1, honestly 3 (it wasn’t the point of the article and you know that). And 5 again. Nobody had facts or questions about a random comment that AA is the biggest of AA/UA/DL at AUS, particularly as it pertains to Hawaii. Obviously WN is bigger domestically in some major markets all over the US. But, Anything however remotely “positive” about AA, you have to respond to… lol.
CF has made it pretty clear that incessant arguments are what readers don’t like.
You are free to argue if you would like but CF’s 2nd sentence mentions Delta, actually before any market or any route.
I noted that the reason and result of DL’s decision not to “experiment” with a bunch of new markets and a reply before mine was in line with CF’s 2nd sentence.
Nobody is picking on AA. They are the largest carrier in the MCO and AUS to HNL market but WN is the largest carrier in both of those cities.
HA, not WN and not AA, and certainly not DL, is adding nonstop service from AUS and MCO to HNL. HA will almost certainly become the dominant carrier in that market as long as they operate the route.
btw, HA’s cash burn is in the middle of the industry; their addition of these markets is rational and based on finding new opportunities vs. stepping into markets that other carriers are already flying.
as homebound’s comment below shows, adding any new route during covid is risky.
Who will Hawaiian use for support staff in Austin? And I know that they have a partnership with B6. Do you think that there are opportunities to use B6 in Austin as a “mini-hub”?
And to comment on Tim Dunn’s comment about AUS being in “WN Country” that was true, but really it’s been changing (I reside in the AUS area). More and more corporations are moving out of California to Austin (just in the past few weeks Oracle, Hewlett Packard Enterprises and Tesla have announced they’re moving from the Silicon Valley to the Silicon Hills. Both Google and Apple have doubled the size of their second headquarters here. Plus many others have moved in the past 2-3 years. Maybe CF will be next!
AA began to ramp up their presence in AUS about 2 years ago when BA began a non-stop flight (currently suspended). We are now a Delta “Focus City”. And now we also have Lufthansa, KLM (has not started yet) and Norwegian. But no announced Asia or South American airlines yet. By looking at the gates in the Jordan Terminal (the main terminal in Austin, there is a South Terminal the size of a dog house used by Frontier and Allegiant), it looks like UA lost a few gates, Alaska picked one picked one up and Delta has picked up 4 or 5.
HPE is moving to Spring, near Houston (and IAH).
I honestly don’t understand the Austin craze. I’ve been there a few times over the years for work and weddings, and I’ve tried to get excited. But every time I’m there it’s HOT AS HELL (and I have friends who live there year round who all say it’s hot as hell all the time), there’s horrible traffic and poorly designed roads/ no good public transportation, and I just don’t see the appeal. Yes, there’s funky restaurants and stuff. There’s no personal income tax in Texas either, which I understand is a selling point (but they get their money with SKY HIGH property taxes and tolls and huge HOA fees). If I HAD to live in Texas, I’d go for the multicultural and cosmopolitan Houston any day (and would never entertain the notion of living in Dallas – did that once and never again!). But I’d still prefer the beaches and mountains of California any day.
Yeah, out of the big TX cities, AUS is the one that is least carrier-aligned. The Metroplex and Houston of course have dual hubs, and basically everything SAT-sized or smaller is either dominated by WN or not served by them. AUS on the other hand is a bit of a free-for-all, and is a large enough market that that appears to be sustainable.
AUS has also actively courted new airlines to an extent I haven’t seen elsewhere, feeding into folks not being loyal to any given carrier. Which in turn makes it easier for airlines, even new ones, to add in new routes, as they can be confident folks won’t bypass them in favor of the dominant carrier when booking. WN has well under 40% market share here.
As for support staff, I’m sure HA will contract that out just like other low-frequency airlines (Norwegian, Lufthansa, Sun Country) have. No need to do much operationally when you’re filling an A330-200 a couple times per week.
Oracle is moving their HQ to AUS, but, honestly, very few jobs are actually moving there. No employee at the current HQ is forced to move. Oracle is a very decentralized company with a huge majority of people working at home, even before Covid. They do have a really nice campus in Austin, and a nice hidden server farm there. I’ve been to both locations. As for Larry Ellison, he isn’t moving to Austin, he is actually moving to Lanai, which makes sense, as he owns 98% of the island…
Angry Bob – I really don’t know who will handle Hawaiian in Austin, but with only two flights a week, I’m sure it’ll be outsourced to someone. I don’t think there’s much opportunity for Austin here. Maybe it could get more frequencies to Honolulu, but I wouldn’t expect much more than that.
Probably Delta for maintenance. We maintain their A330’s and they’ll need an ETOPS predeparture check.
Does Delta have line maintenance at Austin? if so, you are likely right. HA is a long-term TechOps customer for several fleets.
I’m sure Hawaiian is trying to grow Orlando for locals as they have the Vegas market. Think of it as a really long Allegiant flight for vacationers to Orlando.
A really long Allegiant flight is my definition of hell on earth.
To some extent, nonstops tend to gin up some of their own demand, since they increase the convenience relative to what was there previously. And it’s worth noting that it’s easier to make these long-haul adds in a time when fuel prices are low.
In this 2017 Airline for America Commercial Aviation Industry Summit CEO panel, Hawaiian CEO Mark Dunkerly mentioned that Hawaiian was exploring the possibilities of expanding its service further east. Corporate initiatives usually don’t happen in vacuums.
I still think new routes in COVID are a crazy way to lose even more money. I would think it would be the less an airline flies, the less it loses. I know I won’t fly until either I have been vaccinated or the case numbers drop to under 30k a day nationally.
Fixed costs for airlines are really high. Your paying for that multi-million dollar airplane whether it’s flying or sitting on the ground. Airlines are already overstaffed for the network they’re flying. So it doesn’t take much to make something worth trying.
Opening a new station is a bit riskier than adding new routes between airports you already serve, but also consider that these aren’t necessarily just dartboading ideas. Today’s post shows why these markets aren’t necessarily bad ideas, and I also read in another forum that Hawaiian’s plan to go to Austin was a pretty poorly kept secret (or perhaps widely rumored) within the company.
I absolutely think there is a methodology here on Hawaiian’s behalf. If the MCO and AUS markets work, then we could see them run other service from interior and eastern markets on the mainland. They are under pressure on the west coast not only from the Big 3, but also from Alaska and Southwest. By leveraging the range of their A-330s, they can fly nonstop routes to Hawaii that Alaska and Southwest cannot do and that the Big 3 really aren’t interested in doing. I hope it works for them and I have deep respect for Hawaiian Airlines (as I did for Aloha Airlines).
Thanks for covering this Cranky. I’ve flown MCO-HNL several times and would love to avoid AA/UA but the published F fares are uuufffff!
Is HA planning on regular F service or will it be the equivalent of the DL model of premium fares, LCC service?
My guess is that the service would be the same as what they offer between JFK/BOS and Hawaii.
Gringo – It’s a good question. First service is different on the west coast flights than on the NY/BOS flights, but I would think that this would tend to be closer to the West Coast model. Either way, you get flat beds.
Probably Delta for maintenance. We maintain their A330’s and they’ll need an ETOPS predeparture check.
Sorry, wrong post for reply
As others have remarked, the AUS flight will absolutely pick folks up from San Antonio. It’ll also certainly stimulate demand, compared to the ~11 hour slog that it’d take to get to Hawaii otherwise from here. The point about Austinites not being particularly loyal to a given airline, particularly on this route, is helpful as well.
There’s a decent chance I’ll be part of that stimulated demand a month or two after the route opens; I’m not interested in the route if it requires a connection, particularly now, and flying it on a widebody is significant extra bonus points.
I actually expected we’d see 2-4x/wk on this route eventually, but on Frontier on an A321XLR once those started showing up. Obviously this is a bigger deal, and of course it’s only happening because there’s nothing better for the 330s to do.
I did the Florida Hawai`i commute for many, many years. It is pure exhaustion and hell. Leaving Florida at the crack of dawn to a hub, then an 8-10 hour nonstop flight in a domestic plane (First or Coach was typically still aweful), to land in Honolulu at 2PM and then either 1. get begged to train a class or immediately go to work or 2. hop down to Kona to HDQ. Your body hates you that day. And sometimes the next. Add in 6 time zone changes.
Besides that commute being hell, what has always shocked me were the number of connections from Florida to these flights. Even on my last Alaska flight from Orlando -> Seattle -> Hawai`i, the FAs even said there were 18 of us connecting to the same flight, and about 40 in total on the entire plane going to Hawai`i.
Florida has a lot of very strong business ties to the Pacific, but also being known as “God’s waiting room”, those folks STILL travel and Hawai`i and the Pacific are still on their list. The dynamics of Orlando work since you have a large population within a 90 minute drive (which almost touches part of SoFla).
The current appeal of Disney World /Sea World / Universal being open (Thank you Governor DeSantis) and Disneyland being closed (Thank you Gavin?) – Hawaiians are desperate for their “normal” and are in fact traveling to Orlando in droves. Friends who work in hotels said they’re getting a huge spike visitors from Hawai`i, they are coming with the entire family, and renting multiple rooms/condos for 1 or 2 weeks at a time. My last visit was 2 weeks ago, and sure enough, some friends of friends were in Orlando and I helped them with some things. It was a family of 6. And then they had other friends in tow, another 5 (and fwiw, none of them got Covid while in Florida).
I will bet you Hawaiian increases frequency on this route before it even starts.
While it’s mentioned at least twice in the article, there is no requirement for a longer rest period after HNL-MCO than what’s required HNL-AUS. FAR117 has the same 10 hour test requirement following a flight duty period, no matter how long the FDP is or how much flying the pilot does during the FDP.
That said, the schedule does allow (legally, though not wisely) the AUS flight to be operated with only two pilots, while the MCO flight schedule requires at least three.
Off topic, but could you please point me towards a good summary for the hours of service rules for pilots & FAs? I’m familiar with the basic rules for truckers, but not for those driving trucks and buses in the sky.
Kilroy – Pilots, well, good luck. It got a whole lot more complicated with FAR 117.
Here’s flight attendants https://www.federalregister.gov/documents/2019/09/25/2019-20682/flight-attendant-duty-period-limitations-and-rest-requirements#:~:text=Section%20121.467(b)%20provides%20generally,of%20the%20subsequent%20duty%20period .
Thanks, Brett. Wow, those rules must take some serious effort to program & track into the computer systems for managing pilots.
Long and short of it, at least as I read it, without focusing too much on the nuances & exceptions, the limits are:
* Max 60 hours’ flight duty time in a 7 day period
* Max 190 hours’ flight duty time in a 28 day period
* Max 100 hours’ flight time in a 28 day period
* Max 1000 hours’ flight time in a 365 day period
* Max of 8 or 9 hours’ flight time (or 9-12 hours’ duty time), depending on scheduled start time, per day, for flights without extra flight crew (I’m assuming a plane that only requires 2 flight crew normally)
* Adding a 3rd pilot to a 2-pilot plane ups the max flight duty period to 15-17 hours, depending on scheduled start time, or less if the resting area accomodations for crew on the plane aren’t perfect
* Adding a 4th pilot to a 2-pilot plane ups the max flight duty period to 17-19 hours, depending on scheduled start time, or less if the resting area accomodations for crew on the plane aren’t perfect
* Presumably flights requiring longer than 17-19 flight duty hours would involve the airline discussing the situation with their pilots’ union and with the FAA to come up with a suitably amenable plan to add additional pilots and manage the potential for crew fatigue