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Airlines' Growth On Hawaii Routes Is Set To Slow

更新:2019-08-15 编辑:天天彩票app 来源:###### 热度:134℃

Shares ofHawaiian Holdings(NASDAQ:HA)have lost about half of their value over the past two years due to rising competition in many of the carrier's key markets: particularly on West Coast-Hawaii routes.United Airlines(NASDAQ:UAL)significantly increased its capacity to Hawaii starting in late 2017. And just a few months ago,Southwest Airlines(NYSE:LUV)began flying to Hawaii. (Southwest has also started flying some interisland routes within Hawaii.)

However, Southwest and United were both early customers forBoeing's(NYSE:BA)737 MAX. The grounding of the 737 MAX -- which now seems likely to drag on formany more months-- is leading to slower growth in West Coast-Hawaii capacity. This should help Hawaiian Airlines as it tries to get back on the right track.

A huge influx of capacity was underway

While Southwest Airlines wasn't able to begin its Hawaii flights in 2018 as originally planned, there was still a huge surge in capacity on West Coast-Hawaii routes last year. United Airlines was responsible for the biggest share of the increase, but Hawaiian Airlines also added a number of new routes in midsize markets. The total number of seats from the western U.S. to Hawaii increased 10.7% year over year in 2018, according to the Hawaii Tourism Authority.

Growth slowed abruptly in Q1 2019, as United lapped the beginning of its Hawaii expansion and Southwest's entry into the Hawaii market wasdelayed to mid-March. The number of seats from the western U.S. to Hawaii inched up just 1% in the first quarter.

However, Southwest Airlines quickly grew its West Coast-Hawaii flight schedule from one daily roundtrip in mid-March to six by the end of May. As a result, growth in the number of seats between the West Coast and Hawaii accelerated again, reaching 5.4% in May. Furthermore, when it launched Hawaii ticket sales, Southwest hinted that more routes were coming soon.

In this representational image, a Hawaiian Airlines jet taxies out to the runway at Phoenix Sky Harbor International Airport in Arizona, Feb. 14, 2006. Photo: Karen Bleier/AFP/Getty Images

The 737 MAX grounding has changed everything

Southwest Airlines' initial 2019 fleet plan called for the airline to end the year with about 775 aircraft in its fleet -- including 75 Boeing 737 MAX jets -- up from 750 at the end of 2018. Instead, the grounding of the Boeing 737 MAX means that Southwest has fewer airplanes available than it did a year ago. That's causing its capacity to shrink on a year-over-year basis.

As a result, Southwest hasn't announced any new routes to Hawaii since March. The 737 MAX grounding will extend until at least late October -- and more likely November, December, or even early 2020 -- due to new issues that Boeing needs to address. This means that Southwest will be limited to its six daily roundtrips to Hawaii in both the third quarter and a substantial chunk of the fourth quarter.

United Airlines also faces a capacity crunch that could impact its Hawaii service. Early on in the Boeing 737 MAX grounding, United substituted larger wide-body planes for the 737 MAX 9s it had been using between the West Coast and Hawaii. However, management made it clear that this wasn't sustainable. In any case, there aren't extra widebodies available in its fleet during the summer peak season.

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