Hawaiian Airlines says Japan reopening crucial to profitability

Hawaiian Airlines delivered better-than-expected results for the first quarter of 2022, with strong demand for flights across its network. The effects of the pandemic are muted and many countries are lifting restrictions on international travel. Before the pandemic, 70% of the airline’s revenue came from Japan and the largest international market, but Japan still enforces some travel restrictions. Hawaiian Airlines has seen a steady recovery, especially domestically and in North America, but there is one stumbling block.

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“In Japan, travel restrictions have gradually eased with the removal of government-mandated quarantine and an increase in visitor arrival fees. But the current restrictions remain a significant impediment to travel.”

– Peter Ingram, President and CEO of Hawaiian Airlines

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With Australia and South Korea having recently opened up to international travel, Japan was expected to follow suit. Hawaii attracts a lot of interest because it is considered a safe, comfortable and very attractive place for the Japanese traveler.

Before the pandemic, most trips were booked through travel agencies, six to nine months in advance. Today, many travel agents have closed, people have become accustomed to self-booking and are less likely to book so far in advance. Some may also have chosen to take trips closer to home.

Hawaiian Airlines thinks it could easily fill more planes if arrival caps were removed. Photo: Hawaiian Airlines

The Japanese yen is also under pressure and the cost of vacations will continue to rise. Accommodation in Hawaii and the cost of living in general have gone up, as has the price of fuel, which has forced many airlines to cut their schedules. Hawaiian Airlines says “there is enough demand to fill many more seats” on Hawaii-Japan routes.


The stumbling block

Although quarantine for vaccinated passengers is no longer required, Japan does not have the capacity to test all international arrivals. Therefore, weekly or per-flight “caps” were put in place, only allowing each carrier to bring that many passengers into the country. Currently, there are approximately 10,000 arrivals allowed daily by all carriers. Before the pandemic, there were 140,000 to 150,000 arrivals per day.

After the Olympics, it was hoped the restrictions would be lifted, then after the election, but then the Delta and Omicron waves set in. It is now hoped that changes will be made after the next election in July.

Hawaiian offers a fully stretched business class experience on its Airbus A330s. Photo: Hawaiian Airlines

The light at the end of the tunnel?

Despite the uncertainties, Hawaiian Airlines is well positioned with its brand and quality of experience to meet the demand for Hawaii vacations in the international travel market. It has restored its services to full capacity, remains commercially flexible and efficient and is preparing for the arrival of the B787s. It has strong demand for advance bookings from North America and a popular product with its premium cabins and upcoming in-flight connectivity provided by Starlink.

” [The airline] will be ready as further restrictions are lifted, in particular the arrival cap… Probably the most important for us moving forward.”

– Brent Overbeek, Chief Revenue Officer at Hawaiian Airlines


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