Hawaiian Adding A321 Neos? Didn't See That One Coming...

[Full of LUV]

Your right that money talks, but people have been spreading rumors like that for years. Believe it or not, even AK pilots started that rumor once! As if AK management thinks they need an AirBus hub in Hawaii when their business plan calls for flying AK passengers to all the islands from all their mainland destinations. Hawaiian works as a stand alone carrier serving Hawaii, someone like UAL trying to buy it would have so much opposition locally and politically it would be ridiculous.

Dan is right. This state is one party rule, absolutely.... there is something like 5 repubs elected IN THE WHOLE STATE. I've lived in 6 states for more than 2 years and there is nothing quite like Hawaii politics. If you don't have the support of the machine, you will fail via the legislature, courts, unions, and public opinion eventually. Things like airport fees and local laws could be adjusted quickly as a protest. A takeover of HAL would require so many concessions to the local machine that it would leave the deal a lot less palatable than first glance of just buying an airline that has new airbuses with a hub in HNL.
LUV

 

[terryhfly]

They should just buy Frontier. They have lots of Neo's on order.

 

[nordo_2]

This order seems to run contrary to the allure, or model of HA: Twin aisle aircraft, to and from the mainland, offering more unique service. This would seem to me, to validate the efficiency model.

 

[cbrown1]

3,650nm, how close is that to the 757?

 

[curtaindriver]

The more Hawaiian grows the more Hawaiians route structure doesn't mesh with a mainland carrier. It would be a huge business decision for any airline to decide it wants a hub in HNL. Our business plan doesn't fit well with anyone.
If you merged Hawaiian into any other airline, most of what makes them successful would be gone. Passengers like Hawaiian because it's HAWAIIAN. Local Flight Attendants that are head and shoulders above the competition and an authentic Hawaiian atmosphere on board. We even have decent free food in coach. There would also be strong opposition politically. Hawaiian is a major employer in Hawaii and has tremendous growth planned that will benefit the State of Hawaii immensely, allowing that to disappear into a mainland airline and be lost would be a tough sell. Not to mention nobody in Hawaii wants it's inter-island transportation dependent on some mainland company to be the provider.
...and I'm just getting started!

I completely agree. I look at Hawaiian much like Alaska Airlines, created their niche.....in their region and completely dominate that said region. Nobody is gonna buy Alaska, and I believe Hawaiian is creating that same self-contained fortress Alaska enjoys.

Congrats on the order and growth, maybe see you in JFK some time.

CD

 

[n757st]

3,650nm, how close is that to the 757?

The 757 with winglets ~4100 miles from what I have read. There is no way in hell though that the NEO will make 3650 miles unless you touch down with the fuel guage reading zero with no wind. The 320 has an advertised range of 3200nm, in reality you don't push it past 2500nm + reserves + make me comfortable fuel with no wind. With winter winds our BOS-SFO is pushing it at 2350nm. The new wingletted A321 is going to be about 2700 nautical miles (including reserves and some "comfort fuel"), meaning the NEO will have an actual range of around ~3100nm at best.

 

[Full of LUV]

I completely agree. I look at Hawaiian much like Alaska Airlines, created their niche.....in their region and completely dominate that said region. Nobody is gonna buy Alaska, and I believe Hawaiian is creating that same self-contained fortress Alaska enjoys.

Congrats on the order and growth, maybe see you in JFK some time.

CD

Curtain,
Difference is Alaska is much more important to what DAL is trying to do than HAL. Even by DAL's mgmt's admission, if you didn't have Alaska code share, it would not be able to sustain international destinations out of SEA. DAL doesn't want to complete head to head with Alaska, but if that codeshare were in jeopardy, there would be money spent to either keep it in place or replace it.
LUV

 

[curtaindriver]

Curtain,
Difference is Alaska is much more important to what DAL is trying to do than HAL. Even by DAL's mgmt's admission, if you didn't have Alaska code share, it would not be able to sustain international destinations out of SEA. DAL doesn't want to complete head to head with Alaska, but if that codeshare were in jeopardy, there would be money spent to either keep it in place or replace it.
LUV

No argument here. I'm just saying some airlines are protected through the size and scope of their operation....i.e. DAL, UAL, LUV. Alaska doesn't have the size, but their presence is the northwest is dominating, and in after Wien stopped operations in the 80's Alaska is purely theirs. The parallel I was drawing was Hawaiian seems to enjoy some of the same geographic and demographic benefits Alaska has.

CD

 

[eaglesview]

I would have loved to see the 321 NEO at UAL. It is a far better product than that POS 737.

 

[igneousy2]

Great news for HA. I know many of the rank and file are affraid their 2-day SJC's at widebody rates are going to be a thing of the past once this airplane gets online but I think in the grand scheme of things, it will be great for HA.

I think it gives Hawaiian the ultimate 1-2 punch with the West Coast. I think all but the West Coast trunk markets (LAX-HNL,SFO-HNL, SEA-HNL) revert to at least some NB's. You can free up the WB's to try some mid-continent/East Coast Domestic, not to mention some new international routes that you otherwise wouldn't have the equipment for if you were still using the WB for OAK-OGG. You can also upgauge different markets depending on the day of the week. It also gives Hawaiian an intermediate airplane for the interisland market on the days that the increased capacity is justified (i.e. Pro Bowl weekend).

Anyway, I think SWA's answer to this Hawaii question is going to be to stay out of it all together, as this is shaping up to be an impending blood bath. The real question is, what Alaska's response will be-if any. Will it be to run at the first drop of blood in the water, or does the eskimo keep a secret stash of "whop-ass" in that beard of his that he is just waiting to bust out...and waiting...and waiting...

 

[Old School 737]

I would have loved to see the 321 NEO at UAL. It is a far better product than that POS 737.

The thing hasn't even been built yet how do you know !!!

 

[cbrown1]

the 321 is a pig heavy.
If you've flown a crj in the summer it's pretty just like that. You kinda wonder what they will do with the neo.

 

[Grandpa +65]

the 321 is a pig heavy.
If you've flown a crj in the summer it's pretty just like that. You kinda wonder what they will do with the neo.

I agree that a321 is a pig heavy.
I have to wonder if the 321 could lift a full load plus 6 hours of fuel. It would be interesting to see what they claim a neo321 can do. Take off from Lihue's 5600 feet runway at max gross wt., climb to FL 370 and fly to LAX or SFO? Would be very challenging.

 

[Dan Roman]

Great news for HA. I know many of the rank and file are affraid their 2-day SJC's at widebody rates are going to be a thing of the past once this airplane gets online but I think in the grand scheme of things, it will be great for HA.

I think it gives Hawaiian the ultimate 1-2 punch with the West Coast. I think all but the West Coast trunk markets (LAX-HNL,SFO-HNL, SEA-HNL) revert to at least some NB's. You can free up the WB's to try some mid-continent/East Coast Domestic, not to mention some new international routes that you otherwise wouldn't have the equipment for if you were still using the WB for OAK-OGG. You can also upgauge different markets depending on the day of the week. It also gives Hawaiian an intermediate airplane for the interisland market on the days that the increased capacity is justified (i.e. Pro Bowl weekend).

Anyway, I think SWA's answer to this Hawaii question is going to be to stay out of it all together, as this is shaping up to be an impending blood bath. The real question is, what Alaska's response will be-if any. Will it be to run at the first drop of blood in the water, or does the eskimo keep a secret stash of "whop-ass" in that beard of his that he is just waiting to bust out...and waiting...and waiting...

I don't see AK running away by any means. It's a big market and none of us are ever going to have it all to ourselves. You guys jumped into the void created when AQ and ATA cratered and have taken that market to another level. It was inevitable that more direct flights to the outer islands was in the cards. As our customer base continues to grow, more and more of our pax will go direct to the outer islands rather than connect in HNL. That said, inter-island isn't going away, but we are changing the travel patterns some. I can't imagine that AK thinks they could "whop our ass", we are two different business plans. AK feeds itself for their customers who want to go to Hawaii. Were we have no problem filling airplanes wherever we go. That's Hawaiians plan all along. Pick a city were they can sell enough tickets to fill it up. With the NEO's we will obviously have a lot more flexibility for that, but I don't ever see any one airline trying to takeover any single market. There is plenty of room for multiple airlines. Especially when you consider the amount of legacy carriers to Hawaii keeps shrinking due to mergers.
Hawaiian actually gets a higher average yield between the West Coast and Hawaii than anyone else and has the lowest seat mile costs. Combined with their service reputation (much like AK's rep for good service) they have a very strong position. These NEO's will just take that one step further.
You maybe right that this shuts the door on SWA. Their former VP of Finance is now our CFO. So I'm sure HA has a good handle on what SWA would be thinking. AK is probably better off coexisting with Hawaiian in the market than going head to head with SWA. SWA would have been competing for the passengers with a similar travel pattern (mainland passengers being fed to the west coast and on to Hawaii) were we just do our own thing selling tickets to and from Hawaii.

 

[Dan Roman]

the 321 is a pig heavy.
If you've flown a crj in the summer it's pretty just like that. You kinda wonder what they will do with the neo.

I'm gonna go out on limb here and say they are going to put different engines on it

 

[igneousy2]

I can't imagine that AK thinks they could "whop our ass", we are two different business plans.

Sorry...that comment was meant to be sarcastic and not directed at HA per say. I guess it came across wrong.

Although Alaska has done extremely well financially, I am glad for that, and Alaska's conservatism has served them well at times, but sometimes it seems that they are conservative to a fault, where we have missed some very good opportunities.

The ongoing opportunity right now that we are wasting away is our freight operation, we are the dominant carrier in the number one in the number one international freight hub in the US, and we will not take actions to bring our freight from a mere footnote in our financial results to be a force in the US cargo market.

You see Alaska kicking butt in Hawaii now, but what you didn't see is the YEARS of hemming and hahing about how there is no "money in Hawaii".

They ended up looking like a bunch of geniuses, but they had made the business decision to go to Hawaii long before AQ was murdered...it was a work in progress for years. ANC-HNL & SEA-HNL were going to happen regardless. When AQ and ATA went out of business, they happened to be in a great situation. It might appear to casual observers that AS saw this great opportunity and pounced and we grew our network to take advantage of the opportunity. What actually happened (at least initially) is we were getting killed in some of our north/south west coast routes and we re-deployed the airplanes to Hawaii. Instead of going 12 times a day to every LA basin airport from SEA we now go 5-8 times a day.

My prediction based on Alaskas passed reaction to direct competition is that once HA gets their airbuses and starts competing with us directly, with the exception with flights between ANC, SEA, PDX, and SAN (???) you will see AS pull back and probably re-deploy the airplanes. My guess from management rumblings right now is that our new "market" by then will probably be Centrail America.

 

[Dan Roman]

No worries nor offense taken. All our managements do compete and to a certain degree all our fate hinges on that. But like I said, there will always be multiple airlines flying to Hawaii.
I'm off to the union briefing on the NEO's, I'll post any interesting info, provided it's not top secret of course!

 

[cbrown1]

I'm gonna go out on limb here and say they are going to put different engines on it

They need to put a new wing on it. That's the real problem with it.

 

[Dan Roman]

They need to put a new wing on it. That's the real problem with it.

Interesting enough, turns out that is exactly the difference with the NEO. The question was asked at the meeting I just went too about when the airplane would be available. The answer was they only are changing the wing and the engines so they didn't expect any delays. You get an A in aerodynamics!

 

[Mea25000]

whats up with HA's stock today?