Hawaiian Airlines aims to take a measured approach to restoring capacity in its key Japanese market following the country’s recent relaxation of COVID-19 entry rules.
The carrier expects “a solid recovery in coming months” on its routes to Japan, Hawaiian CEO Peter Ingram said during the carrier’s third-quarter earnings call. Hawaiian will “add capacity back gradually,” he said.
This careful approach is due to the depreciation of the yen versus the US dollar, which makes holidays in Hawaii more expensive. Ingram also noted that while most travel restrictions have been lifted, many Japanese travelers may be relatively cautious in flying overseas.
Hawaiian has seen a “positive inflection in demand” in this market following the Oct. 11 moves by the Japanese government, chief revenue officer Brent Overbeek said. However, he added that the Japan-Hawaii traffic “typically has a longer booking curve” than most of the airline’s other markets.
Some of the major Japanese travel retailers are continuing to focus on domestic leisure trips to take advantage of government incentives, Overbeek said.
Hawaiian is currently operating routes from Honolulu to both Tokyo Haneda (HND) and Narita (NRT) airports, as well as to Osaka (KIX). It has yet to resume flights to Fukuoka (FUK) and Sapporo (CTS).
“The piece that we're waiting to fully come back is Japan,” Ingram said last week at the Routes World 2022 conference in Las Vegas.
Hawaiian is currently operating about 60% of its pre-pandemic capacity in Japan, the airline told the Aviation Week Network. When its routes are all restored it will have more capacity in this market than it did before the pandemic, as it will be operating a second daily flight to HND.
Fares on Hawaii’s inter-island routes are under significant downward pressure due to the prices set by rival Southwest Airlines. Although fares in this market are at unsustainably low levels, Hawaiian Airlines will “stand our ground and compete aggressively,” Ingram said.
Hawaiian reported a net loss of $9.3 million in the third quarter.
Third-quarter system capacity was at 93% of 2019 levels, with the US mainland market at 116%, inter-island at 82% and international at 52%.
Hawaiian predicts that its system capacity will be down 4-7% in the fourth quarter compared to the same period in 2019. The deficit is mainly due to the lengthy recovery period on its international routes.
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