July 30, 2012
Credit: Photo Credit: Joepriesaviation.net
Hawaiian Airlines is continuing to buck U.S. industry trends by aggressively ramping up capacity, as it looks for new opportunities not just on the Pacific Rim but also on its own doorstep.
Growth exceeding 20% is almost heretical in the industry's new religion of capacity discipline. But Hawaiian is proving to be one of the rare airlines that can expand quickly and still improve its financial performance.
The carrier's long-haul growth is driven by the delivery of new Airbus A330s, enabling it to open routes to New York, North Asian markets in Japan and South Korea, and to the South Pacific. Another new development sees Hawaiian focusing on the other end of the fleet scale, with a plan to launch a turboprop subsidiary for inter-island service.
Hawaiian boosted its capacity by 16.8% in the second quarter, and it predicts full-year growth of 21-24%. While this may seem risky in uncertain economic times, it has also increased unit revenue and yield by healthy margins. The airline has recorded four straight profitable quarters despite the challenges of opening new markets.
Not everyone is convinced about the pace of growth, however. In a recent earnings call, Hawaiian CEO Mark Dunkerley admitted that Wall Street analysts are divided about the merits of launching direct flights between Honolulu and New York, the carrier's first foray to the U.S. East Coast.
But Dunkerley says the New York route is already showing very promising signs since its June debut. Forward bookings are stronger than for other U.S. mainland destinations, and the new route is performing better than the company's internal expectations.