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- Hawaiian Airlines
3375 Koapaka Street, G-350
Honolulu, HI 96819
- Main hub
- Honolulu International Airport
- United States of America
- Business model
- Full Service Carrier
- Domestic | International
- Association Membership
- Codeshare Partners
- Air China
All Nippon Airways
Delta Air Lines
Hawaiian Airlines operates from hubs at Honolulu International Airport and Kahului Airport, on the island of Maui. The carrier provides a network of domestic services throughout the Hawaiian islands and to the mainland US as well as international services to Asia, the Pacific and Australia. Hawaiian utilise a fleet of narrow and wide-body Boeing and Airbus family aircraft.
Location of Hawaiian Airlines main hub (Honolulu International Airport)
Hawaiian Airlines share price
877 total articles
26 total articles
It is no surprise that the two US investment grade airlines have recorded the most consistent shareholder returns during the past few years. Neither Alaska Air Group nor Southwest Airlines shows signs of slowing their shareholder reward schemes, reflected in Southwest doubling its dividend in May-2014 and Alaska’s consistent share repurchases and dividend pay-outs in 2013 and 2014.
The two other US hybrid airlines Hawaiian and JetBlue have less definitive plans for the form their shareholder returns will take. But reflecting the increasingly vocal base of US airline shareholders, Hawaiian has declared it would outline some form of capital allocation by YE2014.
JetBlue appears to be the one US airline furthest away from offering a timeframe and structure of its shareholder rewards; but it is likely to be top of the airline’s agenda as a new CEO takes the helm in Feb-2015.
This is Part 2 of a two-part series examining US airline shareholder returns.
Hawaiian Airlines is keen to add and expand partnerships with Asian carriers, capitalising on opportunities as US majors have reduced domestic access to their foreign partners.
Hawaiian has already added codeshares with four Asian airlines over the last three years. It is talking to new potential Asian partners and could also expand some of its existing partnerships to include flights to the mainland US.
New and expanded partnerships for Hawaiian will further build up Honolulu’s status as a hub for Asia-mainland US traffic. Honolulu has already emerged as an alternative hub for Asia-US flows as Hawaiian Airlines has expanded its own long-haul network over the last five years from one to nine destinations. As Hawaiian slows down its own Asian expansion, partnerships should drive additional revenue and traffic growth and potentially support expansion of its mainland US network.
Hawaiian Airlines believes its long-haul international network could turn a corner in 2H2014 to become revenue positive on a unit level, a major accomplishment for geographies that have recorded negative results for the past year.
The main drivers for the improvement are network adjustments Hawaiian has made including eliminating service from Honolulu to Fukuoka and Taipei, and some flights the airline has introduced during the last four years reaching maturity.
At the same time a robust demand environment in North America is benefitting Hawaiian, which has re-deployed some capacity it cut from long-haul operations into seasonal flights to the US mainland from Kona and Lihue.
Hawaiian is also making other changes to its business as it starts to contemplate how it intends to allocate capital once it reaches positive free cash flow, which should occur in CY2015.
Now that Virgin America has emerged as the victor in the contest for two gates at Dallas Love Field, Delta Air Lines has a bit of free capacity to deploy elsewhere in its network.
Delta appears to be reallocating the capacity originally pegged for Love Field to its growing hub in Seattle, creating more headaches for the Alaska Air Group. Delta’s latest crop of new services from Seattle is different in that the markets are more O&D oriented rather than designed to optimise connections.
Delta is ratcheting up competition with Alaska in leisure markets such as Cabo San Lucas and Puerto Vallarta, creating another layer of competition for Alaska in Seattle. Alaska has responded to Delta’s latest moves by declaring 11% departure growth in Seattle by Spring 2015, opting to grow in markets where Delta is not presently a huge threat.
Hawaiian Airlines’ 1Q2014 loss offers underlying encouragement; but its long-haul woes remain intact
Hawaiian Airlines was one of two US major carriers to report a loss during 1Q2014, joining United Airlines in losing money during the first three months of the year. But the similarities end there as Hawaiian’s performance in many important metrics, including passenger unit revenue growth, was solid year-on-year.
While Hawaiian continues to make strides in its North American and inter-island performance, its relatively younger international network is still recording negative unit revenue performance.
The airline has taken steps to shore up its fortunes in its long-haul international network through the cancellation of short-lived service from Honolulu to Taipei and between Honolulu and Fukuoka. Much of that capacity is being deployed back to the US mainland, which Hawaiian feels confident should be absorbed by demand.
Questions are being raised over exactly when numerous long-haul markets introduced by Hawaiian Airlines during the last three years will reach maturity and cease being a drag on the carrier’s network.
The airline’s tempered capacity growth during FY2014 is a welcome sign. But other metrics are not as encouraging. Hawaiian has refined unit costs guidance upwards for 2014, citing several factors including the launch of its new inter-island turboprop operator Ohana, aircraft reconfigurations to support a new extra-legroom product and a rise in labour costs resulting from the hiring of additional pilots to comply with new US flight and duty time rules.
Hawaiian is beginning to field requests about when it will be in a position to consider shareholder returns. The carrier doesn’t expect to generate positive free cash flow until 2015, which can be an eternity for investors eager to see some return on their investment. The company assures that it is ending a period of heavy investment that will pay off over the long term. But in the short term Hawaiian may find itself having to defend its strategy to impatient shareholders.