HAWAIIAN Phase III invites

[Dan Roman]

How will things change when the supposed rumor of DAL buying HA transpire? I read on airliners that now that the dalpa TA was agreed to, the DAL CEO will pick up HA in short order due to the HND slots.

That rumor has been around for a very long time. To many reasons to list here why it is doubtful and even if they did make an offer they would have a very tough time pulling it off.

 

[Dan Roman]

Just to reinforce what I said, the pilots that start the rumors that DAL is buying Hawaiian don't really seem to know much about Hawaii. I am quite confident that DAL would have a huge uphill fight if they thought they could takeover the Hawaiian brand in Hawaii. The backlash from the employees and the general population that live in Hawaii would be huge. But more importantly, does anyone really think Senator Inouye would sit back and watch one of the largest local employers go away? A merger still requires government approval if I am not mistaken.

Also, as far as HND goes. It's my understanding DAL allready dropped one of their HND flights? They are restricted what time they are used. HND works for Hawaiian very well because they are Hawaiian Air flying vacationers to Hawaii. Apparently it doesn't work as well for DAL as they rely more on feed and connecting flights, which is tough with the late night slot times. I don't think DAL covets anymore HND slots because of those late night only restrictions.
If DAL wanted to buy Hawaiian it would be because currently, 52 percent of all the traffic in and out of Hnl go on Hawaiian. But it's that reason also that would make it a tough sell politically. We are a small airline in the big scope, oops bad choice of words, in the big picture of the airline industry. But we are the major player in Hawaii.

 

[igneousy2]

Buy an entire airline for one slot? hmm...I'm thinking not.

 

[HAL]

Buy an entire airline for one slot? hmm...I'm thinking not.

Exactly right. I've had a couple of DL friends ask me about the rumor. Their sources seem very suspect, and I think it's mostly a case of 'Hawaiian fever', where they picture themselves on the beach with fruity drink in hand. As others have said, buying the entire airline for a single slot to HND is ridiculous. The Japanese authorities will be opening up HND for more slots in the near future, so what would be the point? The expense involved with a buyout and merger would completely overwhelm any gain for the route, and the ability of Hawaiian to make a profit is based on its being 'Hawaiian', not 'Delta flying to Hawaii'. The brand loyalty, and service that makes HA profitable would go away, and so would any concieveable profits from the merger.

Sure, it may happen, because airline management is human, and just as susceptable to Hawaiian fever as the pilots are. I'm just saying that it wouldn't bring the 'synergies' they love to talk about, and would ruin a very good thing for everyone involved - HA, DL, and the people of Hawaii too.

HAL

 

[808pilot]

I have to agree on the buying of us for one slot in haneda being crazy... I was told that after the earthquake/tsunam, Hawaiian was the only carrier to continue to fly to Japan... The Japanese loved that and appreciated us for flying there even when our flights were empty... Well empty but also we flew up a lot of supplies to help out... Because of this Japan has really opened up our reach over there... As if to say thanks for helping us, here come on over... I don't think they would be as favorable to delta if they bought us and therefore the gain of haneda would be wasted...
But... What do I know... Just an FO...

 

[jonjuan]

Exactly right. I've had a couple of DL friends ask me about the rumor. Their sources seem very suspect, and I think it's mostly a case of 'Hawaiian fever', where they picture themselves on the beach with fruity drink in hand. As others have said, buying the entire airline for a single slot to HND is ridiculous. The Japanese authorities will be opening up HND for more slots in the near future, so what would be the point? The expense involved with a buyout and merger would completely overwhelm any gain for the route, and the ability of Hawaiian to make a profit is based on its being 'Hawaiian', not 'Delta flying to Hawaii'. The brand loyalty, and service that makes HA profitable would go away, and so would any concieveable profits from the merger.

Sure, it may happen, because airline management is human, and just as susceptable to Hawaiian fever as the pilots are. I'm just saying that it wouldn't bring the 'synergies' they love to talk about, and would ruin a very good thing for everyone involved - HA, DL, and the people of Hawaii too.

HAL

SWA bought airtran. Who would have thought that would happen? Consolidation is good for the bank account (managements, investors, wall st). I doubt people will stop flying to Hawaii because of the name on the side of the plane.

 

[Dan Roman]

SWA bought airtran. Who would have thought that would happen? Consolidation is good for the bank account (managements, investors, wall st). I doubt people will stop flying to Hawaii because of the name on the side of the plane.

Your first point is spot on. What your a little off on is the value in Hawaiian's marketing advantage because it is Hawaiian. Hawaiian has a strong marketing advantage and people fly them because they really do follow through on their marketing cliche that your Hawaiian vacation starts when you board the airplane, not when you get off. Paint Delta on the airplanes and crew them with ATL based Flt Attendants and we would lose half of what has made us successful. Hawaiian has a completely different business plan than DAL. We fly to cities that we can fill up a widebody with people that want to go to Hawaii on Hawaiian Air. It works for us, if DAL bought us, they would be paying for a business model that doesn't work for them.

 

[Dan Roman]

I'll give you an analogy. It would be like when USAir bought PSA or American bought AirCal. Both times the parent airline bought a route structure that ultimately was discarded because it didn't work for the acquiring airline. PSA was great by itself, USAir ended up buying it and nothing was left of the routes it flew after a couple years. DAL simply couldn't do what we do. The service (and jobs) Hawaiian provides to the state of Hawaii would be gutted. I don't see the people or politicians of Hawaii letting that happen.

 

[igneousy2]

I do think that Hawaiian does have an advantage over other carriers flying to Hawaii because they are Hawaiian, that being said, I don't think it is as big a deal as you are making it out to be.

The question is, how much pricing power does being Hawaiian give you. In other words, how much MORE is a person willing to pay for the privilege of getting on a Hawaiian Airlines Jet then an Alaska or Delta jet say. Another point is that if say Delta bought Hawaiian, there would (sadly) no longer be the option of flying Hawaiian, so what would that mean for those passengers? Would that mean that they now decide to go to Cabo instead? Probably not.

Perhaps all things being equal, in the final selection of tickets, I would agree that a person would pick Hawaiian over Delta or Alaska because they want to start their vacation "when they get on the plane", but I think at the end of the day, it has been proven time and time again that passengers pick tickets based first on price, then schedule.

 

[Dan Roman]

Good point if Hawaiian was gone, it would just reduce the choices for the traveling public. But that also is why merging them into a legacy would be an uphill political battle. I saw a chart a couple years ago that showed the average yield airlines to Hawaii were getting, and we do get a little more Yield than everyone else. But your right, price is the biggest factor. That said, we can match the lower fares easy enough and still sell the higher fare seats too, that's were the "Hawaiian" advantage helps.