Hawaiian Airlines CEO On Boeing 787, Alaska Merger And Staying Unique

Hawaiian Airlines is known for many things like its stellar on-time reputation, serving hot meals on longer flights in economy class and for its famously Hawaiian approach to onboard service. This year, however, the airline is getting recognition for other milestones, namely a new Boeing 787-9 Dreamliner fleet and a proposed combination with Alaska Airlines, all under the leadership of longtime airline executive and CEO Peter Ingram.

If the Department of Justice (DOJ) approves the acquisition, the airline could be stretching its wings a lot farther.

Brian Sumers, founder and editor of The Airline Observer, says he hopes the DOJ approves the merger, citing an otherwise “very small addressable market for a 21st-century major U.S. airline,” referring to the airline’s main inter-island and Hawaii-mainland operation.

“This business of focusing only on one state is a tough one,” Sumers adds in his insightful subscription newsletter read throughout the industry. “The good news is that flights from the Lower 48 to Hawaii have robust demand and solid revenue.”

Sumers refers to Hawaiian’s most recent earnings call and highlights Ingram’s “tight control” on maintaining a strong future for the airline and that its board seems to be happy with the decision to combine with Alaska.

In a recent interview, Hawaiian Airlines’ Ingram shares his thoughts on how the leisure-focused airline has made bold decisions to get to where it is today. And what it has planned for “tomorrow” should the tie-up be approved.

Ramsey Qubein: What is next regarding the combination with Alaska Airlines?

Peter Ingram: There are two main steps. One is already finished, and that is that the shareholders voted to move forward with the combination. The DOJ will need to review the tie-up and address any competition concerns before approving it. The original application was filed in January, and we feel very good about the combination because it is pro-consumer and pro-competition. There are not a lot of overlapping routes between Alaska and Hawaiian, but where there is, there are other carriers also flying the same city pairs.

The combination is different from what other airlines have done in that there will be two operating brands on a single airline platform. Both Alaska and Hawaiian have fiercely loyal followings in their home markets. This was evident in Hawaii when the merger was announced with many locals worried about their home-grown airline losing its uniquely Hawaiian touch. While the airline won’t be locally owned anymore, both brands will operate separately meaning the Hawaiian touches will stay the same. Both Hawaiian and Alaska are almost a century old, and each brand is very important to the community in its home markets.

RQ: Would Hawaiian join the oneworld alliance?

PI: Since Alaska Airlines is a member, this would be the plan over time for Hawaiian to join the oneworld alliance. Other members of oneworld include American Airlines, British Airways, Qantas, Qatar Airways and Royal Jordanian among others.

RQ: How will the new Dreamliner fit into your fleet and network?

PI: There are two Boeing 787-9s already in service with a third coming by the end of the year. The Dreamliner will serve as a combination of fleet replacement for some of the A330s as well as potential growth for new routes or to add capacity on existing ones.

Since it is a premium-heavy aircraft, it fits perfectly in markets like Honolulu to New York, Tokyo and Sydney that combine the demand for a flat-bed product with the longer range for which the aircraft is designed. The 787 has 300 total seats versus 278 on the A330. There are 34 premium seats, which is almost double what is on the Airbus plane. As a newer generation aircraft, it has greater fuel efficiency, too.

For now, the Dreamliners are operating to the U.S. West Coast. San Francisco was first with Phoenix and Los Angeles coming in May. This allows for more flexibility in the schedule so that the aircraft can undergo maintenance in between these shorter flights. It also allows more opportunity for pilots to become certified and get hours operating the aircraft. Both of those functions becomes more difficult when the planes are flying longer-haul routes with less down time between sectors.

These planes will also work well to cities like Los Angeles and Seattle where there is heavy origin and destination demand for both cabins.

RQ: What is the new business class cabin like?

PI: The Dreamliners shows off the new, fully-enclosed Leihōkū Suites with privacy doors and lie-flat seating. They have larger entertainment screens, more space to work and relax, wireless charging stations, additional power outlets, storage space, and of course, the most privacy behind a sliding door. In a 1-2-1 layout with solo seats by the windows and a pair of seats in the center section of the aircraft, couples can lower a privacy divider to create a larger suite feeling when sitting together.

RQ: Will A330s get a similar business class suite soon?

PI: They probably will not receive the same business class suite, but the airline is thinking about when to refresh the cabin. While there is no firm time frame, it is something that is being considered.

RQ: Are there any Boeing delays affecting the new fleet?

PI: The third aircraft will arrive by the end of the year, but this has already been pushed back a few times. There may be further delays going into 2025, but the existing fleet has some flexibility as we can extend the lease on several A330s. There is some buffer with growth in the schedule in case of any delays.

RQ: Does Hawaiian offer a lot of long-haul connections?

PI: The network spans across the United States and into Asia and the South Pacific with Honolulu as a main hub. The airline does offer many convenient connecting flight combinations between continents, but most traffic is bringing people to or from Hawaii. The routing from North America to cities like Tokyo and Seoul is circuitous although with the stopover program, some passengers do choose this routing.

There is stronger demand for connections between the South Pacific and the U.S. mainland given the more convenient routing. This includes destinations like Papeete, Tahiti; Pago Pago, American Samoa; and Sydney, where Hawaiian will celebrate its 20^th anniversary of flying this month.

The Pacific islands also have a strong visiting friends and relatives element to them since there are strong roots in Hawaii with these cultures, especially American Samoa, which helps to fill flights to the islands.

RQ: What are the plans for onboard Wi-Fi?

PI: The new Dreamliner has more movie and music options than any other aircraft. Coming soon is the addition of onboard Wi-Fi, which is something that is being held back by government certification. Hawaiian Airlines was the first major network airline to use Starlink (it’s already on the Airbus A321neo), but the Dreamliner needs Federal Aviation Administration certification before it can implement it on flights.

The safety video is one area where the carrier invested a lot of time and energy to be informative, but also entertaining. It has been several years since it was last updated, and the new version features a lot of the same people albeit years later. If you know what to look for, you can find some interesting tidbits like the 57 airline team members, several of whom are mother and daughter or siblings, and the word “aloha” hidden in different places throughout the film. It’s all part of the airline’s intense focus on the spirit of the Hawaiian islands remaining strong for customers and employees.

RQ: How is the new premium airport service performing?

PI: It is something that was initially rolled out as a trial to see how people would accept it. It has become so popular that on some days, there is not enough space, but exclusivity has trumped profits in the way it is marketed. That’s why there is not a lot of advertising about it, but if travel advisors request it, they can find it.

It includes a meet and greet on arrival with a lei at the boarding door and a private escort to your car. If you have a checked bag, Hawaiian will deliver it to you. Upon departure, it comes with a private check-in experience (staff will be waiting with your boarding pass from the moment you step out of your car) to the Apartment 1929 lounge (an homage to the year that Hawaiian began operating). Guests can pre-order meals, which are served on the same airline china used onboard (including the cute salt and pepper packets in Aloha shirts) and order drinks from a liquor menu created by the James Beard Award winning Bar Leather Apron.

While not being heavily publicized, it is becoming a popular way for people to experience a more premium offering when flying Hawaiian. Apartment 1929 access is $500 for up to two people.

RQ: How is the airline’s credit card program doing?

PI: Growth continues in the credit card space, and it is something that people really like. Here in Hawaii, local frequent flyers are on the airplane all the time so it makes sense to hold the card. For someone who lives on the mainland (especially outside of the West Coast), it is quite likely that they may not think about having this same card unless they travel to Hawaii often. Still, many people do.

It’s interesting to note that there are more members of Hawaiian’s frequent flyer program that live on the mainland than live in Hawaii. This is really a symbol for how the brand resonates with people on both sides of the Pacific Ocean.

RQ: What is the biggest challenge for an airline like Hawaiian?

PI: Hawaiian is not alone in this, but the margins on leisure flying are quite small. The four largest North American carriers have grown in this regard. As a smaller airline, we have to be creative and scrappy to stay competitive.

So this is one of the things that is really fun for airline executives, the competition. When you work for an airline, it is hard to explain to people, but it gets in your blood. This challenge is what keeps me up at night, but also what gets me up in the morning.