Hawaiian Airlines shunts Melbourne route in wake of slowing demand

Hawaiian Airlines has decided not to pursue direct flights between Melbourne and Honolulu.

Mark Dunkerley, chief exective of Hawaiian Airlines.

A softening Australian economy, the continued climb of the US dollar and slowing demand for international travel has shunted Melbourne down the pecking order of Hawaiian Airlines’ new routes wish list.

The Pacific carrier had been considering adding a direct Melbourne to Honolulu flight as early as next year but is holding back on any commitments as demand from Australians travelling to Hawaii slows.

“The Australian market is probably the one market in our entire network where we have seen some slowdown in demand,” Hawaiian chief executive Mark Dunkerley told The Australian.

“Certainly it’s not as strong as it was a couple of years ago and travel trade is seeing that in terms of outbound demand.”

The slowdown in Australian demand for Hawaiian holidays forced Jetstar to abandon its three-services-a-week Brisbane-Honolulu route from November, deciding instead to pursue more profitable flights to Bali and Phuket.

While Hawaiian remains the only carrier to fly direct to Honolulu from the Queensland capital, the airline has plans to reduce the frequency of its flights from four a week to three a week.

However, Mr Dunkerley said there were no plans to reduce further capacity in the Australian market.

“(Latent demand) will slightly delay as to when we increase capacity to Australia, though. Australia has been an important part of our network and it’s done very well for us,” he said.

“I think that people who have travelled on us have seen the value because we have a lot of repeat customers. So it’s been a terrific experience for us in Australia.”

In March, Hawaiian said it was looking to capture more of the market flying to its namesake and had placed Melbourne on a shortlist with five other destinations that it wanted to fly to in the near future.

But Mr Dunkerley said there were no solid plans for when the Melbourne route would become a reality for Hawaiian and that it was now on a list with a dozen other possible locations.

“Melbourne is clearly one of our potential new routes. We have a dozen of them around the Pacific Rim and we tend to hold our fire until we get close to the day that we have the aircraft to deploy, which in our case probably won’t be for the best part of another year,” he said.

“As soon as outbound demand will support a traditional service we will be there. It’s a long-term game for us. We intend to grow in Australia and the question will be when is it propitious to do so.”

Hawaiian is likely to increase capacity across the Asia-Pacific region next year when it will receive the first of 16 Airbus A321neo aircraft. Those planes will be used mostly to service the US west coast but that will free up some of the airline’s A330s to be redeployed to Asian destinations.

“It’s a hiatus for about 12 months during which time we will be fleet constrained. That necessarily delays some of our network development until the new fleet arrives,” Mr Dunkerley said.

Hawaiian has been leading a regulatory push for a better-balanced playing field for smaller airlines by objecting to a tie-up between Qantas and American Airlines that would see the two carriers share revenue on flights across the Pacific.

The alliance is yet to receive approvals from the US Department of Transportation following opposition from Hawaiian and JetBlue, which argue that smaller carriers and the routes they service shouldn’t be sidelined by larger carriers.

“There is a broader issue and that is: do policymakers value the competitive spur that independent carriers can provide?” Mr Dunkerley said.

“If the answer to that is yes, if it is the policy of policymakers to encourage competition and if they believe that consumers need choice then it must be the case that the regulators provide a balanced playing field where all of the players get a reasonable chance of competing.”

Mr Dunkerley said an alliance between Qantas and American would limit Hawaiian’s growth and could increase prices for consumers, as had been demonstrated with similar tie-ups between US and European carriers on trans-Atlantic routes.

“It will limit our ability to grow in Australia. It establishes that the markets we can vie for are the large origin and destination markets and not the markets that require connections in order to succeed,” he said.

“I don’t think it will undermine what we do today but it will be an opportunity forgone.”