It's Official HP will be servicing Hawaii

Old Jul 16, 2005, 7:59 pm
  #46  
dll
 
Join Date: Jun 2001
Location: LAX
Programs: AA Gold (prev. Ex Plat for 10 years); DL Plat; UA Gold; Hilton Diamond
Posts: 2,341
The scenario of rolling out of bed in the wee hours and racing off before restaurants and concessions are open, then enduring an 8.5 hour flight to HNL from ORD is not accurate.

On these flights, AA and UA both still serve full meals in coach. And, UA also continues to serve full meals in Y from DEN.

Add a stop in SFO, LAX, or any other west coast city, and you will get the "opportunity" on both to buy prepackaged snacks loaded in sodium, nitrates, preservatives and other fun things that your body does not know how to handle.

Aloha.
dll is offline  
Old Jul 16, 2005, 9:11 pm
  #47  
 
Join Date: Sep 2002
Location: NYC
Posts: 1,222
Originally Posted by dll
The scenario of rolling out of bed in the wee hours and racing off before restaurants and concessions are open, then enduring an 8.5 hour flight to HNL from ORD is not accurate.

On these flights, AA and UA both still serve full meals in coach. And, UA also continues to serve full meals in Y from DEN.

AA does not offer a complimentary meal service on ORD-HNL. All food in Y is BOB.
ExtrAAordinaire is offline  
Old Jul 16, 2005, 9:13 pm
  #48  
FlyerTalk Evangelist
 
Join Date: Jul 2001
Location: Phoenix, AZ
Programs: HH Gold, AA Gold
Posts: 10,482
Originally Posted by Bagels
* Over the past 10 years, the biggest % jumps in ticket prices occured for travel to/from Hawaii -- 15x the national increase for HNL alone:
http://www.bts.gov/programs/economic.../table_01.html

* Hawaii doesn't follow traditional fare models.
- Tickets to Hawaii are rarely sold for cheap. When they are, it's usually because capacity has been flooded into the market (for example, a couple years ago AA, DL, HA and AQ each added significant capacity & mid-winter airfares dropped to $300-$400 inclusive from the East Coast).
- All airlines offer discounted airfares to tour operators in exchange for a percentage of each vacation package sold.
- Hundreds of surf boards are transported between Los Angeles and Honolulu each day... at a huge 'oversized' cost to the passenger.

* Take AA's ORD-HNL for example: rarely do tickets from the Eastern Time Zone drop below $700. AA's collecting further profits from their participation with tour operators (including their own) and transportation of cargo (they frequently fill the plane's cargo hold up with cargo being 'traded' to JAL). To connect with this flight, many passengers had to get up in the wee hours of the morning, arrive at their departing airport before the resturants opened, and endure a short connection at ORD. And now they don't receive any food on this plane, but can buy a small snack box and sandwhich - but NOT A MEAL - for $8. Not only is that a ridiculous offering for a flight in which most people will be on the plane for 10 hours, but factoring in many people won't reach HNL until they've been traveling to HNL for 20 hours with little/no food, it's a ridiculous offering.

Poor service indeed.
First, what exactly are "traditional" fare models?? Hawaii is expensive during peak periods when demand is high. Hawaii is cheap during off-peak periods when demand is lower. This generally holds true for most markets in the US domestic arena. That being said, as Japanese tourists flooded Hawaii in the 90's, there were some temporary periods of fewer flights (which artificially pushed up airfares).

Second, there are frequent sales from the West Coast to HNL. Usually, HA starts them but, like WN in continental US markets, the others generally match. Like the continental US markets, fares to Hawaii were very expensive this summer (just like some domestic markets, e.g. SEA-PHX was $350+ for most of the summer)

Third, airlines only participate with tour operators because they MUST to fill their seats to leisure destinations such as Hawaii. The tour airfares are MUCH lower than the normally booked airfares. Even if they get a small percentage of hotel/rental car revenue (and it IS small), it doesn't make up for the reduced airfare.

Fourth, if it's such a ridiculous offer, fly someone else or fly First Class! In the 70's when I was a young kid, airlines offered "K" class from SEA-HNL. "K" class was in a separate cabin (typically the big rear cabin of the DC-10/747) and did NOT receive complimentary meals. However, you could purchase a meal for $2 or $3. Some of the "purchased" meals left much to be desired (e.g. a virtually inedible entree called Crepes Foo Yung on NW one time).

Actually, maybe this is an idea worth resurrecting. How about 3 cabin planes to HNL, configured similar to transcon flights? The business cabin could have 12 business seats (2 rows) with true J service. The full fare economy cabin could be configured like UA's Economy Plus (about 34" pitch, complementary coach meals, etc.). Finally, the Economy Minus cabin (about 31" pitch, meals for purchase, etc.) for the discounted fare passengers.

Finally, it is WELL known that Hawaii flights have historically been money losers for the airlines since the late 60's. What's wrong with airlines raising fares to actually cover the cost of the flights and providing amenities based on the corresponding profitability? Hellooooo! Although there are some indications that this is changing, airlines are still losing money!

Last edited by formeraa; Jul 16, 2005 at 9:18 pm
formeraa is offline  
Old Jul 17, 2005, 5:32 am
  #49  
 
Join Date: Oct 2002
Posts: 2,039
Originally Posted by formeraa
First, what exactly are "traditional" fare models??
Very few people purchase pricy walk-up fares to/from Hawaii; airlines have historically relied on these types of fares for the bulk of their profits.

[quote]there were some temporary periods of fewer flights (which artificially pushed up airfares).
Airfares to Hawaii have dramatically increased over the past decade whereas airfares around (most of) the rest of the country have largely remained flat. The reason why these airfares have increased is unimportant in context to this discussion all thats relevant is that people are paying, on average, 50% more for their tickets to HNL vs. ten years ago while theyre paying less to Disney World.

Second, there are frequent sales from the West Coast to HNL.
The travel period sale fares are offered for is slim (usually two weeks in January, most of May and mid-September through mid-December, minus a week or so around Thanksgiving) and sale fares usually price out more than what one would expect to pay for a transcon flight.

Third, airlines only participate with tour operators because
For airlines like AA, NW and HP that own their own tour operator (that buys blocks of hotel rooms, among other things), tour packagers are heavily profitable. In fact, NWs recent expansion into HNL with 753 was done predominately for its WorldVacations product. Furthermore, many tour operators buy blocks of seats on various airlines this is still a very lucrative business (as ATA learned when it carried a reported average of 700 Pleasant travelers a day).

Fourth, if it's such a ridiculous offer, fly someone else
I am. I purchased my next two tickets on CO and UA (avoiding SFO/LAX).

Finally, it is WELL known that Hawaii flights have historically been money losers for the airlines since the late 60's.
Undoubtedly a myth. Airlines have longed to add service to Hawaii, but the demand hasnt been there Las Vegas, Florida, Mexico and the Caribbean have beaten Hawaii (among American travelers) over the past decade (and more). But Hawaii refuses to accept this it takes the opinion that mainlanders would love to travel there, but theres just not enough seats. And airlines have played off this theyd love to add seats, but Hawaiis such a low-yield, FF destination that they need some incentive. So they get reduced rent/landing fees (at one point free) and guess what? No service increases.

What's wrong with airlines raising fares to actually cover the cost of the flights
Nothing. But the market, not the airlines, set the prices. If its not enough, time to start reducing the cost of the flights

and providing amenities based on the corresponding profitability?
You better believe that low service qualities on 8-10 hour flights will make passengers think twice the next time they vacation shorter flights to Florida, Mexico and the Caribbean will suddenly look much more attractive.
Bagels is offline  
Old Jul 17, 2005, 6:34 am
  #50  
FlyerTalk Evangelist
Hyatt Contributor Badge
 
Join Date: Apr 2003
Location: Honolulu, Hawaiʻi [+MKK4 EBBER R577 EDSEL R577 ELKEY EXERT]
Posts: 15,834
Originally Posted by formeraa
Finally, it is WELL known that Hawaii flights have historically been money losers for the airlines since the late 60's.

Originally Posted by Bagels
Undoubtedly a myth. Airlines have longed to add service to Hawaii, but the demand hasnt been there Las Vegas, Florida, Mexico and the Caribbean have beaten Hawaii (among American travelers) over the past decade (and more). But Hawaii refuses to accept this it takes the opinion that mainlanders would love to travel there, but theres just not enough seats. And airlines have played off this theyd love to add seats, but Hawaiis such a low-yield, FF destination that they need some incentive. So they get reduced rent/landing fees (at one point free) and guess what? No service increases.
According to the local newspapers here, the professors at the University of Hawai'i's Travel Industry Management Dept. and those folks at the HVCB have always come out saying that Hawaii is a money loser. Now, either you're right or they're wrong. I'd take my chances with them, no offense intended.

By the way, in May of 2005, there were roughly 620k total domestic air seats to the State of Hawaii (I excluded international because that seems out of scope here). Roughly 400k of them were visitors to Hawai'i, making all flights to Hawai'i about 64% of flights full. However, the estimated number of residents traveling to/from the islands domestically during that same travel period was 60k. So in January 2005 alone, with very rough estimates, you had about a 74% rate in those seats. That's okay, in my opinion, a sign of a recovering industry. The numbers do indicate changes in the tourism industry, however, showing levels that are far surpassing the pre-2001 levels.

You said that reduced landing fees brought about no service increases. Prior to Sept 11th, the Airport was having problems with landing fees, raising them to meet the demands of the Office of Hawaiian Affairs who owns the very land the airport sits on. However, as you noted, landing fees were waived shortly following Sept 11th (but reinstated in '02). In December 2001, there were 438,269 domestic air seats to the islands. In December 2002, there were 514,407 domestic air seats to the islands. In December 2003, there were 553,961 domestic air seats to the islands. In December 2004, there were 630,881 domestic air seats to the islands. In May 2005, as noted above, there were 620 domestic air seats to the islands (a slight decrease from December '04, but that's due to an increase in airline capacity during the peak winter months). From Dec. 01 to May 05, there was a change of +181,731 domestic air seats to the islands. Seems like overall service increases by airlines to me.

I don't care about the demand related to tourism in Florida, Las Vegas, et al. What matters is the demand for Hawai'i tourism, and those numbers are rising, substantially by the month. I might not be a big fan of increased tourism to the islands (that's another post), but the numbers tell a different story.

Now, since it's 2:30 a.m. here, what was the real argument about, again?

Last edited by slippahs; Jul 17, 2005 at 6:37 am
slippahs is offline  
Old Jul 18, 2005, 12:30 am
  #51  
 
Join Date: Oct 2002
Posts: 2,039
slippahs,
I believe that flights to/from Hawaii, for reasons mentioned in my previous postings, have as much potential for profitability as most other routes in airlines networks. If they didnt, HP wouldnt be beginning service (not in an era of $60+ oil) UA wouldnt have bought a separate, sub-fleet of PW engines for select 757, etc.

In the 1990s, Hawaii never saw the explosive tourist growth that other hotspots (Las Vegas, Florida, Mexico & the Caribbean) did. In fact, it took 10 years to break the tourist record set in 1990. Hawaii has defended its position as tourists would love to come here, but there are simply not enough airline seats - and thats because airlines cant make a profit flying here. In reality airlines regularly added capacity but retracted it when the demand wasnt there (without deep discounting). Strong marking efforts by other hotspots lead people in the Central/Eastern part of the country to realize theres better vacation values closer to home then suddenly in the late 1990s, a freefall of Japanese tourists lead Hawaii to once again spend big marketing dollars in the mainland (particularly in the Central/Eastern regions) that, coupled with the increase costs of vacationing elsewhere, suddenly lead to a resurgence of demand to Hawaii. But according to Hawaii, the REAL reason people are returning is because airlines decided to add capacity, a luxury they can afford with more economical aircraft (757, 767, 777).

BTW, HNL twice waived landing fees/reduced rent one was in the late 1990s, which is what I was referring to.

----

EDIT: I responded to slippah's via private message in reference to his posting below -- I didn't want to kill this discussion.

Last edited by Bagels; Jul 24, 2005 at 3:32 am
Bagels is offline  
Old Jul 18, 2005, 2:06 am
  #52  
FlyerTalk Evangelist
Hyatt Contributor Badge
 
Join Date: Apr 2003
Location: Honolulu, Hawaiʻi [+MKK4 EBBER R577 EDSEL R577 ELKEY EXERT]
Posts: 15,834
Originally Posted by Bagels
In the 1990s, Hawaii never saw the explosive tourist growth that other hotspots (Las Vegas, Florida, Mexico & the Caribbean) did. In fact, it took 10 years to break the tourist record set in 1990. Hawaii has defended its position as tourists would love to come here, but there are simply not enough airline seats - and thats because airlines cant make a profit flying here. In reality airlines regularly added capacity but retracted it when the demand wasnt there (without deep discounting). Strong marking efforts by other hotspots lead people in the Central/Eastern part of the country to realize theres better vacation values closer to home then suddenly in the late 1990s, a freefall of Japanese tourists lead Hawaii to once again spend big marketing dollars in the mainland (particularly in the Central/Eastern regions) that, coupled with the increase costs of vacationing elsewhere, suddenly lead to a resurgence of demand to Hawaii. But according to Hawaii, the REAL reason people are returning is because airlines decided to add capacity, a luxury they can afford with more economical aircraft (757, 767, 777).
I agree that all of the above is interesting, but do you have a source? You keep mentioning that "tourists would love to come here, but there are simply not enough airline seats - and thats because airlines cant make a profit flying here," but I've never heard that from anyone I've ever known in the HVCB or through the media...
slippahs is offline  
Old Jul 18, 2005, 10:07 am
  #53  
 
Join Date: Aug 2001
Location: San Diego,CA,USA
Programs: Southwest Companion Pass American Admirals Club Lifetime,IHG Rewards Spire,HHonors Gold
Posts: 1,358
Finally, it is WELL known that Hawaii flights have historically been money losers for the airlines since the late 60's. What's wrong with airlines raising fares to actually cover the cost of the flights and providing amenities based on the corresponding profitability? Hellooooo! Although there are some indications that this is changing, airlines are still losing money![/QUOTE]


I find this hard to believe when the best fare I coud get in advance
4-6 months out from west coast to Hawaii was $700 (2500 miles)
If I told you that the best fare from LAX to NEw York was $700 you would say I was crazy!!!! same 2500 miles!!! I do think however that fewer people pay walk up fares also First class to Hawaii is not free like it is in the mainland for Elites. I believe it to be very profitable or America West would not be the last major to get into the market.
sanFF is offline  
Old Jul 18, 2005, 10:45 am
  #54  
FlyerTalk Evangelist
 
Join Date: Jul 2001
Location: Phoenix, AZ
Programs: HH Gold, AA Gold
Posts: 10,482
Originally Posted by sanFF
I find this hard to believe when the best fare I coud get in advance 4-6 months out from west coast to Hawaii was $700 (2500 miles)
If I told you that the best fare from LAX to NEw York was $700 you would say I was crazy!!!! same 2500 miles!!! I do think however that fewer people pay walk up fares also First class to Hawaii is not free like it is in the mainland for Elites. I believe it to be very profitable or America West would not be the last major to get into the market.
I said that HISTORICALLY (e.g. in the 60s/70s/80s/90s) Hawaii has been a money loser. I also said that there are indications that this is CHANGING. By the way, mainline airlines are losing their shirt on the extremely low fares from LAX-JFK. America West's costs are almost as low as Jetblue/Southwest. Hopefully, that will continue with the acquisition of US Airways and their Hawaii service will be at least breakeven for them.

To Bagels --

The airlines are NOT lying. I personally did some of this analysis for AA. My goal was to minimize the huge losses (not maximize the non-existent profit) on Hawaii flights. We discontinued contracts with the low end tour operators and increased contracts with higher end tour operators. We cut the premium level in-flight service. We made plans to put the 757's on Hawaii routes to lower overall costs. We tried to limit the AAdvantage availability on these flights to 10% because everyone wants to redeem their awards on these flights (sorry...I know this statement isn't popular).

In fact, I personally had to fight to keep the Hawaii flights. Upper management came very close to cutting all west coast to Honolulu flights (just leaving ORD and DFW, where the fares were higher).

Again, there are indications that this market is bouncing back in terms of profitability. Perhaps they are now about breakeven. Those of you under 35 or so do not realize that these fares are historically low. Based on historical fare levels in the 80's, $700 from the West Coast and $1600 from the East Coast would be reasonable fares. Of course, we don't pay that much anymore...
formeraa is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.