Hawaiian Airlines is relying on a broader reopening of the key Japan market to provide further capacity gains, as most of its other international routes are already recovering well.
The airline’s international growth in late 2022 and early 2023 is mainly going to come from Japan, Hawaiian Airlines CEO Peter Ingram said during the airline’s second-quarter earnings call.
The carrier is still only operating “a fraction” of its pre-pandemic capacity to Japan, Ingram noted. This will start to change soon, with more of its Japanese flights due to resume in August.
Hawaiian’s near-term performance in the Japanese market is constrained by daily international passenger arrival caps imposed by Japan’s government, Ingram said. However, the airline is hopeful the cap “will be increased or lifted altogether in coming months,” he said.
Another factor is the weakness of the Japanese yen versus the US dollar, which makes visiting Hawaii more expensive for Japanese tourists. However, the carrier predicts that demand will still increase significantly as restrictions are lifted.
Hawaiian is generally “optimistic about Japan,” Ingram said. “I think [the Japan market] is going to help us a lot as we move through the end of the year and into 2023.”
In contrast to Japan, Hawaiian has restored most of its services to its other international markets, Ingram said. The demand recovery has been progressing well on its routes to Australia, New Zealand, South Korea, Tahiti and American Samoa.
These markets are close to their planned capacity levels, with only a few frequency additions or seasonal adjustments likely in the near term, according to Ingram.
Hawaiian forecast that its third-quarter system capacity will be down by 5-8% compared to its 2019 levels. This represents an improvement of about six percentage points from the same comparison in the second quarter. The carrier noted its capacity levels may change depending on adjustments to Japanese restrictions.
Overall, Hawaiian operated 115% of its North American capacity in the second quarter compared to 2019 levels. It operated 31% of its pre-pandemic international capacity in the quarter.
The carrier is still in discussions with Boeing regarding the updated delivery schedule for its Boeing 787 orders.
Delays to 787 deliveries were one of the factors in Hawaiian’s recent decision to suspend its flights to Orlando (MCO), Ingram said. The 787 delays meant the carrier would not have had enough aircraft to operate all the routes it has added domestically, as international flying increases. Hawaiian was the only carrier flying nonstop between Honolulu (HNL) and MCO.
The carrier now has sufficient aircraft to operate all of its routes, including its planned international services, a Hawaiian spokesperson told the Aviation Week Network.
Hawaiian reported a net loss of $36.8 million for the second quarter compared to a loss of $6.2 million in the same period in 2021. Operating revenue rose 68.4% year-over-year to $692 million.
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