Hawaiian Is “Looking Seriously” Into Ordering The A380?!?

Bloomberg ran an interesting article yesterday about Hawaiian Airlines, and specifically about how they’re considering the A380 and how they eventually want to expand to London.

Could Hawaiian order the A380?

Well, there’s no denying that A380s could probably be had for pretty cheap at this point. Not only is Airbus slowing down production, but Singapore Airlines will be returning their first A380 to their leaser next year, as they’ve decided not to keep the plane. While cash strapped airlines like Malaysia have been trying to offload them, this is a pretty big blow for Airbus.

Singapore-A380

So is there room for Hawaiian to add the plane to their fleet? The airline’s CEO claims that they’re “looking seriously” at whether the plane may have a role to play in their network:

Dunkerley, 52, said the airline is looking seriously at whether the Airbus A380 might have a role to play within its network, especially on routes such as those from Honolulu to Los Angeles and Tokyo, which it serves with smaller wide-body planes six times and three times daily respectively.

The argument for using the superjumbo, which might be available on attractive terms either from Airbus or, soon, in the second-hand market, isn’t conclusive and Hawaiian needs convincing of the business case, Dunkerley said.

Right now their biggest plane is the A330, so I have a hard time imagining they could make an A380 work. Perhaps it could make sense to Los Angeles and Tokyo, as mentioned above, but even there it seems like they’re better off operating multiple frequencies, with schedules that work for all passengers. Operating a single flight with 500+ seats would probably lower yields quite a bit.

But who knows, if the plane can be had on attractive enough terms, maybe it could make sense.

However, overall Hawaiian seems to be headed in the opposite direction, as they’re focusing more on smaller planes that are fairly long range, like the A321neo, which they’re taking delivery of next year.

Hawaiian to Europe?

Hawaiian’s CEO also seems to have the goal of launching flights to Europe, and specifically to London. However, a couple of years ago the airline swapped their A350 order for A330neo aircraft instead, which aren’t quite as long range. So they’re not sure if they’ll have the range to operate those flights:

Flights to London are a goal but may be at the limit of what’s attainable after the carrier swapped its order for Airbus Group SE A350-800 jets to the shorter-range A330neo in 2014, Hawaiian Holdings Inc. CEO Mark Dunkerley said in an interview Wednesday.

“We certainly hope the answer is yes but we don’t have all the information we need,” he said. “It’s going to depend on what our final seating configuration is and therefore the weight of the Neo and its exact performance and statistics when it’s actually built.”

Honolulu to London is ~7,200 miles, so it’s a long stretch. The economics of ultra longhaul flights are tough, especially in a leisure market like this. Presumably the flight would be low yield and targeted primarily at tourists, so I’m not sure how they’d make the numbers work on that.

hnllhr

There are rumors that Swiss airline Edelweiss will launch flights between Zurich and Honolulu, perhaps as early as the end of this year. The airline will be taking over some A340-300 aircraft from Swiss over the coming months, so those could be used for the service. However, that’s all speculation as of this point.

I’d also be fascinated to see how Edelweiss hopes to turn a profit flying the gas guzzling A340-300 on a ~7,600 mile leisure route…

Bottom line

I’m fascinated by the business side of the industry almost as much as the miles & points side. Naturally when I saw an article about a Hawaiian A380 I had to stop and read. Personally I can’t imagine Hawaiian will take delivery of an A380, and I’m even surprised that they’re “looking seriously” at it, given that overall they’re headed the direction of smaller, more fuel efficient, and long range aircraft. For an airline like Hawaiian, the A380 could kill their yields, and that’s not something they want to do.

I’m also curious to see if we actually see flights between Hawaii and Europe. It would be an interesting new market, though given that it’s an ultra longhaul leisure market, I have to wonder how airlines hope to turn a profit operating it.

About lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

More articles by lucky »

Comments

  1. I would think they would need to get these for a very cheap price to make it work. I could see if they got a few of these doing a LAX-TYO-HNL loop & the reverse. But they would have to step up their game in the premium cabin to get the HVC’s going LAX-TYO & v v.

  2. ANA said they plan to throw the A380s that had been headed to Skymark on the HNL route. Tokyo – Honolulu is a decent volume leisure route, and frequency is less important than price. ANA can reduce frequency at least, they have 2 767s NRT-HNL and a 787 HND-HNL. A bit of ANA copycat, at least with the concept? Except that ANA didn’t even really want the A380, they wanted Skymark’s slots.

  3. The running joke is “the best beach in Japan is in Hawaii.” Would think with all the Japanese tourists making the relatively short trip to Hawaii this could make sense. Pack them all into a high-density a380 with minimal service and lower fares. I would assume leisure travelers are less focused on frequency of flights than a business traveler would be, so cutting down to 1 flight a day might not be terrible.

    They can then use their 340s on my flights to the mainland or to try and reach some destinations in Asia. Would assume China is a relatively untapped market for travel to Hawaii.

  4. @Nolan – Emirates not the best example considering the significant subsidies it receives from the govt.

  5. I flew with Edelweiss Air last month from ZRH to FAO. They actually have way better service on the flight than what LH offers from MUC to FAO. Actual (cold) Food with silverware instead of just sandwiches. And on board entertainment (via server on personal devices) on all Edelweiss planes whereas LH is just starting to roll this out. Overall we were really impressed and will consider flying the non direct way in the future when the price is comparable.

  6. You have to remember a market is a business market or a tourist market depending on where you are flying out of. Hawaii may be a tourist market flying out of US but with a majority of Hawaii residents being Japanese origin flying out of Japan its also a Business and visiting friends and family market. (Just like New York is a Business market flying out of London but flying out of Asia is mostly a Tourist market). An A380 could work if targeted on the Japan – HNL route.

  7. They may use the A380 for inter-islands flights. 🙂 Hawaiian is the most customer unfriendly airline I ever experienced so the more people they can fit into an airplane the more they can treat them poorly.

  8. With the introduction of the A350 line, I have a really hard time understanding why anyone would want the A380. While most variants of the A350 has a roughly 8,000 nautical mile range, the A350-900ULR has a range of ~8,700 nautical miles. This compares favorably to the A380 range of 8,500 nautical miles. When we look at gas capacity, the -900 ULR can hold 43,600 US gallons, while the A380 holds 84,500 US gallons. If that’s the actual relationship of range to fuel consumption, that’s a pretty sweet deal.

    Sources:
    https://en.wikipedia.org/wiki/Airbus_A350_XWB
    https://en.wikipedia.org/wiki/Airbus_A380

  9. Could you give a quick explanation of the concept of yields? I assume this is the average profit generated per passenger? Are there routes where low yield/high volume makes sense? Or is the aim in the airline industry to always maximize yields rather than revenue?

  10. @John – Yield is a measure of the quality of revenue. The actual definition is average fare paid per mile, per passenger. You derive it by dividing passenger revenue by revenue passenger miles. It’s presented in cents per mile typically. In general, you want high yielding routes. However, if an airline has a very low cost structure and airplanes that are high volume, you could go for the high volume / low yield play and hope to make things up with volume. For example, fares from Europe, specifically Copenhagen, to Bangkok are very low. airlines with traditionally high costs such as Lufthansa don’t do well serving this market, so they look for other markets where fares are higher – business markets such as CPH-LHR, for example. Emirates, though, has 600+ seater A380s that they deploy to Copenhagen and that they deoply to Bangkok. There is infinite demand (almost) from Copenhagen or from any other European city to Bangkok, and low fares stimulate demand. Having a 600+ seat A380 means they can spread out the costs of operating a flight over more people, provided there is demand. Emirates has no problem filling these planes at this price point. So, there CAN be instances where low yield can work, but the airline in question has to have a low unit cost/ high volume airplane, and the demand has to be there to fill it up. Conversely, there are other markets out there where the fare is high and yield is high. Higher cost (meaning airlines having higher cost structures) airlines look to these markets. For example, and this is a rare one, Cape Air is an airline with 9 seater planes. These are actually very expensive to operate. They fly such routes as Boston to Nantucket and Martha’s Vineyeard. These are short routes, but routes where people are willing to pay up to $650 round trip (trust me, I know all too well, sadly) for the 45 minute flight. Very high yielding, matched to the high cost structure. There are infinite variables of the cost/ yield dichotomy out there. For an airline, it all depends on what your cost structure is, and whether or not you’re in markets that can support it. If you are an airline with a high cost structure and all the markets you serve have low yields, you’re in trouble – volume wont help you. If you have a low cost structure, you can make things work in a low yield environment, but you need to do whatever it takes to fill every last seat – volume counts here.

  11. Flights to Hawaii in economy are super expensive! Compare the average fare out of LAX to similar distanced destinations (like anywhere on the eastern seaboard), you’ll see considerably higher prices to Hawaii (even worse if you look at Maui, Kauai and The Big Island). I’d love to see prices to Hawaii drop!

  12. The A380 idea may involve Hawaiian’s slot limits at Haneda, which the airline has been trying to expand for years but with only limited success. They tried to go after Delta’s Seattle-Tokyo route and to replace JAL’s Tokyo-Kona route but the DOT turned them down both times. With their slot situation limited and ANA considering introducing the A380 on that route, Hawaiian may be considering it as a way to remain competitive if the planes could be had cheaply enough.

    With careful management of their product and a plane specifically tailored to the market, they could potentially do better than airlines operating main line aircraft on the route. As a leisure route filled mostly with Japanese families and groups that have no frequent flier status, I’ve generally observed that Economy Plus/Comfort Plus seats tend to go unsold and those cabins much more sparsely populated than on domestic US flights. Few fliers have the status to upgrade for free and even fewer seem to be willing to pay for the upgrade. Those with money and status tend to go straight for business or first. If Hawaiian configured their A380 in a high-density configuration they could potentially make a better economic case than legacy carriers using regular main line international aircraft on the route.

  13. Singapore are NOT giving up on the A380. They have deliveries incoming. They are not renewing the lease on their first plane which makes perfect business sense.

  14. Perhaps HA could make the 380 a huge publicity thing? Lease the plane, paint it yellow, call it the “Giant Flying Pineapple” or “Hawaii One”? Have some special onboard entertainment such as some traditional Hula dancers. Add in some special Hawaiian cuisine etc? Just make it a huge PR / media thing with all the social media that would follow.

  15. Well it’s a good thing Hawaiian has your expert analysis, complete with your full insight into their business, Lucky.

  16. Edelweiss flying to Hawaii is a possibility. But I don’t think it’s going to happen this year. The airline will receive one A340 this year and a second one in 2017. In October the A340 will serve short haul routes with “old” swiss interior until the plane will be reseated with Economy and Business. (Business will be in the middle of to economy sections ewww, read more here: http://asklucky.onemileatatime.com/threads/edelweiss-air-swiss-subsidary-airline.7195/ ) They will launch flights to Phuket, cape town and soon also San Diego. But Honolulu definetly is a possibility for the future.

    The newspaper that wrote this article isn’t really the most reliable source aswell, it could be compared to the british Sun, just for free and entirely advertisement funded 😛

  17. I think Hawaiian should launch to HKG and SIN before LHR, especially SIN.

    Right now, most routes from SIN to North America requires a stopover. HNL could be the ideal stopover.

  18. I would think cargo would play a large part in the yields do a direct between either LHR or ZRH. Cargo is way more valuable than persons with the right two points in mind.

  19. Gas guzzling A340-300 perhaps there needs to be some fact checking here- the A340-300 is more fuel economical than the B777. Please google B340-300 versus B777 and compare the data on axlegeeks. With the fuel cost at the time the article was written the Airbus cost $6.89 less per nautical mile to operate than the Boeing

  20. @ Duncan Spence — I assume that’s total and not on a per seat basis? There’s a huge capacity difference between the A340-300 and a 777…

  21. Hi Tommy, thanks for your devil’s advocate taunt. Why yes of course. The Emirates business model is totally reliant on the A380. That’s is why they have said that if Airbus would come out with a neo that they would commit to 200 more A380s

  22. Lot of great comments here. I’m not saying they do it, but I can see it.

    * Wouldn’t the squeeze on yield also affect their current and future domestic competitors, thus acting as a barrier to entry or expansion?
    * They would be leveraging a meaningful advantage in the LA market – only widebodies going over the longest stretch of water without a diversion airport in the world. Better comfort and with a 4 engine plane, customer perceived safety. I know I’d sure choose that over an Alaska or Southwest 739 expansion.
    * in any case Hawaiian is not well diversified, so they must MUST protect home turf.

    Hawaiian is in some ways a de facto “state” airline, thus the comparisons to Emirates etc are actually quite apt. It wouldn’t surprise me to learn that the state of Hawaii might provide incentives. Hawaii is absolutely dependent on tourism, and tourism is absolutely dependent on the amount of lift into the market. The move to narrowbodies by the majors several years ago was not welcomed. It’s not complicated, the state and the tourism industry wants more available seats any way they can get them (and cargo space as mentioned elsewhere).

    Let’s say HA is able to buy a fleet of 380’s on the cheep cheep. The key is that it appears oil is going to be lower for longer, probably through the useful life of the aircraft. Some incentives are thrown in. HI has a ton more seats coming in, HA can go far more places, and fiercely compete on its bread and butter, and from a customer comfort standpoint, its a no brainer (it kind of already is, taking a 75 on United or American sucks). There sure are a lot of winners in that scenario.

  23. I seriously don’t see the A380 working for Hawaiian. It’s too much airplane for our market, and HNL really isn’t equipped to handle it. Further, Hawaiian has been focused on increasing direct flights from all islands, which may serve to decrease demand to/from HNL. Plus, as you’ve said, they are focusing more on smaller aircraft.

    As far as a HNL-LHR flight go, I could actually see this working, if they play their cards right. Hawaii, believe it or not, has a lot of tourism originating in Germany and the U.K. Germany, in fact, is one of our largest sources of visitors from outside of the U.S. That being said, I do think this will be a stretch, especially with the A330neo. And let’s face it, Hawaiian’s slimline seats would be torture on a flight that long… Especially with their extremely limited IFE options and lack of wifi.

  24. Other than HNL, are any of the Neighbor Island runways rated for the A380?

    I imagine that they’d be too short for the A380, but I’m not sure.

  25. With WTO ruling EU subsidies to Airbus are illegal, A380 will be history rather quickly. WTO is also close to rule on US subsidies to B777X.

    No @Nolan, bold statements by management based in a flex-law city are not indicators of real profit.

  26. My understanding is that the performance is similar to 747-400. So, could land mostly anywhere but takeoff depends on payload – where you’re going. Could they get out of Maui at 7000ft length for LAX? Probably, although that route is unlikely I must admit.

    Real issue is wingspan, as it relates to taxiways or parallel runways. Loading and unloading at ramp significant as well.

  27. According to Airbus: “A380s are compatible for scheduled destinations and alternate operations at over 230 airports, with a total of up to 405 compatible airports expected in the future. (For more information on the A380’s global “footprint,” see the map below, which highlights airports where the A380 is flying today or approved to operate, as well as future potential destinations for the aircraft).”

  28. Put an A380 on LHR-HNL and time the HNL-AKL connection attractively. LHR-HNL-AKL is 11,626 miles,
    which compares favorably with LHR-LAX-AKL (11,960 miles) or LHR-DXB-AKL (12,244 miles). Offer attractive stopover package options – a stopover in exotic Hawaii on a such a long routing would be a welcome niche product to some passengers.

    This would accomplish the goal of serving London without concerns of insufficient range of the A330neo, and the transfer traffic could justify the large aircraft. Furthermore, the stopover passengers would drive increased tourism, making the proposition attractive to the state authorities.

  29. Let’s face it – there are almost no US airlines operating wide-bodies domestically, except on an exception basis or as part of an international flight. It’s part of why foreign airlines are better.

    So a domestic airline that operates a A380, A350 or 777/787 would have a marketing advantage, and in fact Hawaiian makes a big deal about flying wide-bodies, albeit A330’s.

    A380’s with 600 seats could make sense to Europe or Japan. And it will attract people who care about these things.

  30. Must not also forget that Hawaiian would not have access to an A380 gate at LAX unless there were modifications to the domestic terminals. I doubt they’d get access to TBIT

Leave a Reply

Your email address will not be published. Required fields are marked *