Hawaiian Airlines CEO & President Peter Ingram joins Yahoo Finance to discuss the international and domestic travel recovery.
- A pick up in leisure travel helped Hawaiian Airlines post better-than-expected fourth quarter results as revenue came in at more than $494 million and losses came in narrower than expected. Hawaiian Airlines CEO and President Peter Ingram joins us now for more. Peter, thank you so much for joining us. Where does Hawaiian Airlines stand now in terms of the travel demand that you're seeing relative to your expectations several months ago and where you think the business was going to be or thought the business was going to be at the start of this year?
PETER INGRAM: So from-- from the beginning of 2021, we've really seen a very strong recovery. And we're very pleased with the progress we've made coming up off the depths of demand throughout 2020. Domestically, you know, by about the middle of the year we had-- had grown back to demand levels that resembled prepandemic.
We did have some ups and downs in the back part of the year with the Delta variant and then towards the end of the year the Omicron variant that affected demand a little bit. But really, we're pleased with that-- that part of the recovery and-- and have seen, you know, even recovery in recent weeks as we're seem to be getting to the back side of the Omicron curve.
Where we're still waiting for recovery to manifest itself is on the international side of our business. And I think there, we're still not entirely in the starting blocks, but we're not far out of them. And what we really need is for the policy environment around cross-border travel to liberalize a little bit in the Asia-Pacific region, particularly Japan. We've seen some of it in Australia now.
But the conditions are-- are falling into place. Vaccination rates are high. And we're hopeful that by the middle of the summer of 2022, we're going to be flying something that resembles our prepandemic schedule in the Asia-Pacific region as well.
- That's encouraging to hear. Can you shed any light for us on how, for instance, airlines for America or anybody, whether you're having direct conversations with the government agencies in places like Japan, about let's open things up? For instance, some of the other carriers, when Europe was closed down, were lobbying the US government aggressively to open up destinations like London? Is that playing out behind the scenes? Are you getting any help from our government on that?
PETER INGRAM: Well, it's a little bit of a different situation from where we were in the middle of 2021 with-- with the restrictions on travel between Europe and the US. Because in that case, it was really restrictions on the US side that were holding demand back. And you know, I think here domestically, we have-- there's a lot more latitude for us to-- to talk to our government leaders and-- and the people at the Department of Transportation and so forth.
Internationally, it's-- it's a little bit different. You know, Japan's very important to our network. But in the grand scheme of international travel to Japan, we're a relatively small carrier and in the overall picture. But I do know-- you know, I'm sure those conversations are going on domestically in Japan particularly as it pertains to the home country carriers are probably engaging in discussions regularly with-- with their legislators and government officials.
- I believe it was about a quarter of Hawaiian Airlines business that took place outside of the US prepandemic. I'm wondering, when do you expect that mix to get back to prepandemic levels for your airline?
PETER INGRAM: Well, again, it's going to be subject to the policy environment allowing us to realize that demand. What we're planning for is to be ready to restore our international services in full by summer of this year. And so we would plan for the back half of this year to have something like that historical mix of revenue. But those plans are contingent on the policy environment continuing to evolve.
- One last thing too. It's not official, but there are reports that the governor in Hawaii may actually ramp up the requirements for those of us domestically who want to leave the mainland United States to come visit regarding vaccination. And now you have to show that you've got the booster shot. Would that impede your recovery at Hawaiian if the governor there were to require that?
PETER INGRAM: Well, I think it's been very helpful to us to have some stability in the Safe Travels program and what the requirements are. And one of the things we faced early in 2021 was that there was a-- a patchwork of different restrictions for different counties. The rules were changing. And that's very hard for people who are traveling once or twice a year to understand and keep track of.
So we'd really hope that the-- the government will look at maintaining stability in that program. We think-- think Safe Travels has-- has worked as it's intended and given us time to get a high vaccination rate and given us time to make sure we had the resources to deal with the pandemic. But you know, over time we would hope that that, you know, the restrictions remain stable and-- and ultimately get removed, and we go back to being able to travel without some of the restrictions that have been in place for the past couple of years.
- Peter, I'm also wondering, how are you thinking about the return of business travel and that slower return that we're seeing for business travel versus leisure travel? Is that something that is negatively impacting Hawaiian Airlines? Or is it something that provides a competitive advantage for you guys since, of course, you do benefit heavily from this pickup we've been seeing in leisure travel?
PETER INGRAM: Yeah, obviously, our focus is on the leisure side of the business. We do, on our routes within the islands of the state of Hawaii, carry a little bit of business traffic. And I think we did see that come back a little slower over the course of last year, although it does seem that some of those short trips are picking up as we get to the end of '21 and into '22.
I think the other way it affects us is that over the course of last year, a lot of capacity from carriers that would normally focus on the business market has found its way into leisure markets, whether it be Hawaii or other leisure markets. And you know, we'll probably have a more stable supply-demand environment once we see demand come back more fully internationally and once we see business travel come-- come back, which both of which have lagged. And-- and there won't be quite as many airplanes chasing the limited pools of demand that are performing really well.