Sun may set on cheap Hawaii flights
With some tickets at just $399 return, these could be the best of times for travellers heading to Honolulu
The old adage about getting it while it’s hot has a ring of authenticity when it comes to bargain airfares to Hawaii. Air New Zealand fares on the route dropped to $499 at the weekend, and five days later fell to what has been called an “unbelievable” $399 return.
The airline’s aggressive pricing strategy between Auckland and Honolulu is two-pronged: first, it fills planes and, second, it puts the squeeze on a fierce competitor.
For a carrier, there’s nothing as useless as an empty seat at takeoff — it’s the classic perishable commodity — and Air New Zealand is facing stronger financial headwinds across all its operations than it expected six months ago.
Travel agents often chip in for these spectacular deals, but even so, the airline is not going to be making any money at these prices. Taxes and other charges for the return trip alone are about $165.
It will hope that potential travellers who miss out on the limited offer will be tempted to pay more once they’ve got excited about going to Hawaii.
The Aloha State has become a tougher sell recently for Air New Zealand, which flies there between three and seven days a week. There’s a bit of “been there, done that” following the steep surge in travel there over the past six years, and more flights to Bali have also gnawed at the market.
And Air New Zealand flies to Honolulu only, whereas rival Hawaiian Airlines offers scores of flights to five outer islands and, increasingly importantly for New Zealanders, connections to 12 mainland US destinations.
That’s soon to be 13 with the addition of Boston. Those connections mean Kiwis can enter the US through the relatively relaxed Daniel K. Inouye Airport in Honolulu, then fly to the mainland on what is a domestic flight.
At Air NZ’s Fanshawe St headquarters, Hawaiian Airlines’ entry into the market six years ago was met with everything from agitation to fury. Airlines love talking about how competitive their industry is, but like it less when competition happens to them.
Air NZ’s stranglehold on direct flights to Hawaii meant economy fares were upwards of $1500 before Hawaiian’s entry.
Hawaiian built up to five return flights a week and for a while there was a capacity war.
Hawaii Tourism Authority figures show that in 2016, there were just on 100,000 seats available and 64,000 arrivals from New Zealand. Last year that rose to 150,000 seats filled by 85,000 arrivals.
Both airlines are pulling back during the quieter months — 20,000 fewer seats are forecast — but Air New Zealand is now fighting with those giveaway lead-in prices.
Hawaiian won’t want to get bogged down in a price-cutting quagmire. Its best offer this month has been $589 through a travel agent. While it may yet respond with a cheaper fare, it backs itself as a well-connected carrier with an uncomplicated fullservice leisure product.
While it’s happy days for travellers right now, Helloworld’s warning that this may not last carries weight. Any further reduction in capacity will mean more competition for seats and therefore higher prices.
And there’s speculation that the airlines could bury the hatchet and do a codeshare deal. Relations are cordial between Fanshawe St and Hawaiian’s management in this part of the world at a personal level, which always helps. They’re fierce competitors but respectful rivals.
A codeshare could involve a “mix of metal” (both airlines’ planes) or one airline doing all the flying with the other’s passengers on board. It may apply only to Auckland-Honolulu. There are cultural synergies between the two airlines, which are small by world standards, and their fleets are looking increasingly similar.
Hawaiian has more than 10 codeshare partners already and at a time when Air New Zealand and Qantas can do a “frenemies” deal on each others’ domestic networks, then teaming up with Hawaiian doesn’t look like so much of a stretch.
Airlines team up to help each other in tough times. This strengthens routes, which is good, and keeps airlines strong, which is also good for consumers in the long term. But when carriers cosy up, the days of $399 Hawaii fares may be limited.
The Aloha State has become a tougher sell recently for Air New Zealand.