With an Assist From JetBlue, Hawaiian Chooses Long Beach As Its First New Airport to Serve with the A321neo:
Hawaiian Airlines has long had a size issue. Ever since the DC-8s were retired back in the 1990s, the airline has only had large widebody aircraft to fly to the mainland. This wasn’t necessarily a problem for the airline, but it limited the type of routes it could fly. While other airlines like Alaska ramped up on tons of thinner routes with narrowbodies, Hawaiian had to sit and watch. Now, Hawaiian has put its first A321neo aircraft into service, and that smaller airplane means Hawaiian has a whole new range of opportunities.
Hawaiian decided to first use the new airplane to bolster existing routes, but yesterday, the first totally new airport was announced. It just happens to be in my backyard: Long Beach will get daily Honolulu flights starting June 1. This is a very interesting choice, and it’s one that required JetBlue to independently decide to give up a slot. I’d say both airlines are likely happy about that.
Up until now, the smallest airplane Hawaiian had that could make the mainland was a 767 with just over 250 seats. That airplane is leaving the fleet in the not-too-distant future, so that leaves the 278-seat A330-200 with fully flat beds in First Class as the smallest option. That is a whole lot of airplane. The A321neo, however, has only 189 seats, and it has recliners, not beds, in First Class. This airplanes sips fuel and has low operating costs. It was supposed to allow Hawaiian to open up 3 new types of routes:
- Flights from smaller West Coast cities to big Hawaiian cities like Honolulu.
- Flights from big West Coast cities to smaller Hawaiian cities like Lihu’e or Kona.
- Add frequency on big trunk routes like, potentially, LA to Honolulu.
So far, Hawaiian has focused on the second bullet point. It put the A321neos on routes it already operated like Oakland to Kahului (which started yesterday), Lihu’e, and Kona. But the question remained, when would Hawaiian open up new cities with the airplane as promised? That starts June 1.
Technically, the airplane comes in on the evening of May 31 so it can operate the inaugural westbound flight on the morning of June 1. It’ll be a typical West Coast-Hawai’i pattern where there’s a morning flight to the islands with a return that evening. The flight will arrive at 9pm, an hour before the Long Beach curfew kicks in.
Is this going to work? During the summer, I bet it’ll do nicely. During the rest of the year, I’m not so sure. But wait, isn’t Long Beach slot-restricted and full? Yes, but here’s where this story gets interesting.
Long Beach Has a Waitlist
Long Beach has 50 slot pairs for daily flights on big aircraft, and they’re all currently taken. So how on Earth did Hawaiian get one? Well, it turns out that Long Beach has a waitlist for slots. Up until November, the waitlist was comprised of existing airlines. Delta was first, JetBlue was second, and Southwest was third.
But then Hawaiian showed interest in flying to Long Beach. When Hawaiian joined the waitlist, it zoomed to the top, as any new entrant would per the noise ordinance rules. Every other carrier would have been notified that the waitlist was going to be updated. They would have been asked if they wanted to remain on the list, and then when the new list was generated, they would all know who was on it and in which position. Seeing Hawaiian at the top, JetBlue must have had an idea.
JetBlue Smells Opportunity
JetBlue has long struggled to figure out how to serve Long Beach. No matter what it tries, it just can’t generate a decent fare. Things got worse when Southwest entered, but JetBlue didn’t want to walk away from what really is its only West Coast operation of any substance. It went into defensive mode and started flying slots as required to keep Southwest from getting more.
JetBlue admitted that things weren’t working well. It told employees to keep watching as it looked to find better ways to use the slots including possible flights to leisure destinations like Santa Rosa or Steamboat Springs. That’s probably still on the docket, but there was another opportunity that presented itself.
When the waitlist was updated, JetBlue undoubtedly saw that Hawaiian was now at the top of the list. It’s obvious to anyone watching that if Hawaiian got a slot, it would use it to fly to Honolulu. That’s music to JetBlue’s ears. If Southwest gets a slot, there’s a good chance it gets used to compete directly with JetBlue. But if Hawaiian gets it? That’s fine. In fact, it’s good. JetBlue and Hawaiian are frequent flier partners, so members of each program could earn and burn miles on each other. There could even be codeshare opportunities between the two (though not many considering the schedule Hawaiian ended up putting out).
So it was that in December, JetBlue made the strategic decision to give up a slot while oddly remaining on the waitlist for additional slots. It must have had to cross its proverbial fingers and hope that Hawaiian was serious about flying to Long Beach.
Will It Work for Hawaiian?
Long Beach is a tough market, and it generally underperforms on revenue compared to other LA Basin markets. But Hawai’i could be different.
First, there is also absolutely no service from Orange County to Hawai’i any longer, so this will have much broader geographic appeal compared to something like Oakland or Vegas which has service from every airport in Southern California. Second, you have a much higher percentage of leisure travelers who fly less frequently. They won’t be loyal to specific airlines as much, and they’ll be more willing to look at various airport options. Lastly, you have the Hawaiian diaspora around Southern California in cities like Gardena, Carson, and even Long Beach itself. Long Beach is the most convenient airport for people in those areas.
In the summer, I’d imagine this will work well. It’s the rest of the year that has me less sure. But all those reasons listed above make me think there is a chance of this working. I like Hawaiian giving it a shot, and it bodes well for the airline getting creative as it gets more of these airplanes. I imagine some other West Coast cities are eagerly drooling at the prospect.
January 09, 2018 at 01:45PM Source: http://crankyflier.com