Hawaiian Airlines targets growth in Asia

After posting one of its best financial results on record in 2016, Hawaiian Airlines is reaffirming its commitment to the Asia Pacific region

2nd Apr 2017


Hawaiian Airlines targets growth in Asia

After posting one of its best financial results on record in 2016, Hawaiian Airlines is reaffirming its commitment to the Asia Pacific region, celebrating its fourth anniversary of service between Auckland and Honolulu.

"It reflects our confidence and commitment to this part of the world," Hawaiian Airlines President and CEO Mark Dunkerley told CNBC's "The Rundown" on Monday.

The Honolulu-based carrier is the largest and longest serving airline in Hawaii and the 8th largest commercial airline in the United States. Its key Asia-Pacific markets are Australia, New Zealand, China and South Korea. More recently, the airline expanded its service to Japan with additional routes and frequencies to Tokyo in 2016.

After emerging from bankruptcy in 2005, the airline undertook a repositioning to capitalize on the enduring demand for air travel to Hawaii, one of the world's most popular tourist and leisure destinations. The latest data from the Hawaii Tourism Authority shows strong international tourism inflows for the first two months of 2017, driven by big demand from visitors in Australia and New Zealand.

Government statistics also show visitor arrivals have grown steadily since 2010. More than 8.8 million people arrived by air to Hawaii in 2016, and arrivals are expected to rise to 9.41 million people by 2020.

"As a company, we embrace that. We wrap ourselves in the flag of Hawaii, in its culture and what it stands for. That's a very successful formula for us," Dunkerley said.

But the formula may be slowly changing as the airline looks for much of its future growth in the Pacific Rim. It sees additional and sustainable demand from the region and is transitioning to become a truly international carrier in order to compete for business in the region.

"The areas that are seeing rapid economic growth are principally around the Pacific Rim and we are well situated to take advantage of that," Dunkerley said last month.

Travel restrictions

Despite some concerns within the sector about potential regulatory change from the White House, Dunkerley said President Donald Trump's controversial travel restrictions have had a negligible impact on the airline so far.

"To date, it's had no effect, we haven't seen any lessening of demand, but that's not to say it shouldn't be something that we're concerned about," he said.

The first version of the ban prompted multiple protests across the country when it was first signed on January 27. Since then, the order has been challenged in multiple courts and remains tangled in a complex legal web.

"Airlines, whether Hawaiian Airlines or really any airline, are in the business of moving people from one place to another and any narrative that talks about limiting that is clearly not something that airlines want to see," Dunkerley said.

"We would certainly like to see a global narrative around people being able to move freely and painlessly around the globe," he added.

Earnings guidance

Hawaiian Airlines has been a relatively quiet achiever in its sector. The carrier was ranked first globally for on-time performance for 2016 by OAG and it flew 11.1 million passengers in 2016 — a 3.5 percent increase over the prior year.

Financially, the airline also reported one of its strongest-ever results in 2016, delivering net income of more than $244 million, a rise of more than 30 percent on the prior year.

"The guidance we're giving is that we've had a record breaking 2016 and a lot of the trends that we saw in 2016 have continued into 2017. Those trends are very strong consumer demand, low fuel prices by historic standards… and a pretty benign capacity environment, but that depends market by market," Dunkerley said.

The company is expected to report earnings on April 20th 2017, according to the Nasdaq.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asian Aviation at a glance