While the deal would bring more tourists to the island state, it also would bridge travel between Japan and the U.S. mainland, Chief Executive Mark Dunkerley said in an interview.
Flier's Bill of RightsConsumer protections against lost luggage, long hours on the tarmac and canceled flights are on their way, despite grumbling from airlines, Middle Seat columnist Scott McCartney reports on the News Hub.
"I am confident of our chances. Having looked at the applications, I think Hawaiian's application is the strongest."
Dunkerley added that Hawaiian is the only applicant without a presence in Japan, so winning the slots would bring competition to the Tokyo market.
Hawaiian Airlines serves 16 U.S. destinations, including Las Vegas, Los Angeles, San Francisco and Seattle, as well as four foreign markets, notably Manila and Sydney. But just 7% of the carrier's business comes from overseas.
"We have the ability to connect a lot of customers," Dunkerley commented.
Yet there is little hope that the tiny airline will get the gates, according to Forrester Research analyst Henry Harteveldt. Unlike rivals, Hawaiian lacks established operations in Japan and has no alliances with other carriers -- two important selling points for Japan. It's also likely that the company doesn't carry as much political clout.
Hawaiian is a tenth the size of United Airlines parent UAL Corp. the next largest competitor for the Tokyo slots. Also competing for the gates are global goliaths Delta Air Lines Inc., Continental Airlines Inc., and AMR Corp.'s American Airlines.
"The Japanese government won't take an asset as precious as this and give it to an untested carrier," Harteveldt said. "It would be great to introduce a new airline as a competitor, but Hawaiian is too small ... and Japan will likely want to go with an airline that has done business there before."
Altogether there are four daily Tokyo slot pairs up for grabs -- representing times for take off and landing -- as a result of a recent "open skies" agreement between the U.S. and Japan.
Harteveldt thinks they most likely will be awarded to just one U.S. airline each. "This is a game of musical chairs,' he said. "With five airlines and four chairs, someone is going to go home unhappy."
With more than 70 million annual passengers, Haneda Airport is the world's fourth-busiest airport and shares regional traffic with its neighbor Narita International Airport. It's also a major gateway to the Asia mainland.
Japan and the U.S. Transportation Department are currently reviewing the airlines' applications, and Hawaiian's Dunkerley said he expects a final decision in May, with rights to be available by the end of October.
Hawaiian Airlines just wrapped up 2009 as its most profitable year ever, pulling in a net income of $116.7 million, or $2.22 a share, due in large part to falling jet-fuel prices.
The company is hungry for more growth and lower costs. Next month, Hawaiian will take delivery of its first wide-body Airbus A330 to replace its aging, less-efficient fleet of 18 Boeing Co. 767s, used for its long-haul markets. Then beginning in 2017, Hawaiian will take ownership of its first Airbus A350XWB.
Dunkerley acknowledged he is constantly reordering a "wish list" of future destinations for the airline, but is keeping his eyes primarily along the Asian-Pacific Rim, which has the greatest potential for fast growth.
"We are planning for the future," he said. "Having been able to earn profits throughout this recessionary period, we've been able to stay on our long-term growth and development path, [while] our competitors have had to take a fairly substantial number of routes off the map."
The airline does not provide a profit outlook, but Dunkerley noted that things continue to improve after ticket prices were slashed in early 2009, with full-year yields coming down by 10% to 15%.
Hawaiian Airlines is the largest airline in the state of Hawaii, but is 11th among all domestic carriers. About a third of its business serves the inter-island market, with 60% serving West Coast cities and the rest flying to overseas markets.
(Christopher Hinton - MarketWatch)
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