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Hawaiian Airlines CEO: ‘We’re gearing up in anticipation of the Japanese market’

Hawaiian Airlines CEO and President Peter Ingram joins Yahoo Finance Live to discuss the company's push into the Japanese market, the latest on COVID restrictions, and the impact of oil prices.

Video Transcript

- Well, as oil and gas prices pull back but remain high at over $100 a barrel, so do jet fuel prices. They have hit a 14-year high. Well, for what that means for the state of air travel, Dave Briggs and I are joined by Peter Ingram, Hawaiian Airlines CEO and President. Thank you for joining us, Peter.

Now, amid these sky high prices, we've seen other companies, like Alaska Airlines and Allegiant, cutting second quarter schedules and routes to lower capacity given the cost of jet fuel. How are you managing this in terms of the costs and how potentially it ends up perhaps getting passed on to consumers?

PETER INGRAM: Well, we haven't made any adjustments to our schedules at this point, based on the jet fuel changes we've seen over the last couple of weeks. Most of what we're focusing on right now from a federal perspective is the recovery of demand in our international markets as policy changes.

And we're gearing up, actually, in anticipation of the Japanese market, which is the most important international market for Hawaii opening up over the next couple of months. We're really monitoring that situation very closely. And that's going to dictate a big part of how our schedules look for the summer.

DAVE BRIGGS: Aside from schedules, she mentioned 14-year high for the price of jet fuel. When do you expect that to be reflected in increased ticket prices?

PETER INGRAM: Well, it is-- you know, prices are changing every day in the marketplace. And typically it's driven by the supply and demand of air seats that dictates what pricing is applicable at any moment in time and in the market. That's going to be a dynamic situation over the next couple of months. And it'll be-- of course, we don't know right now how high these prices are going to be for jet fuel and how long they're going to be up there. So it's a very dynamic situation, obviously, with what's going on in Ukraine.

- So then how would you characterize the current state of travel? Obviously we're seeing that COVID is still with us. Inflation is at a 40-year high. So people perhaps won't have as much free cash to spend. But you seem optimistic, given that you've launched your statewide hiring campaign. What are you keeping an eye on?

PETER INGRAM: Well, we've seen a great recovery in terms of demand for domestic leisure travel and demand domestically for travel into Hawaii. We had had a recovery throughout 2021. It was upset a little bit in the back part of the year with the Delta surge and then the Omicron surge at the end of the year. But as we've entered 2022, and we've come down from that peak in Omicron cases, demand is very strong and shaping up to be a good summer domestically.

I think there's the same potential for that on the international side, as policy changes are put in place in places like Australia, which we've already seen, and then Japan and Korea, which are starting to relax some of their restrictions for transborder travel. And that positions us pretty well. As cases have been down, people really do want to travel. They want to get out and go, particularly for leisure. And we're well-positioned to take advantage of that when the conditions are right.

DAVE BRIGGS: One thing that remains the same is the mask guideline on airplanes now extended to April 18. How long do you expect that to be in place? When will we be living in a world where people can fly without a mask? And how much do you hear from your pilots union and the flight attendants union on that?

PETER INGRAM: It's up in the air right now what the federal government does with that requirement. They waited until very close to the March 18 date, which was the previous expiration, before extending it for one month. And they've signaled that they're going to take a look at the conditions that would be required for removing that as we approach the new deadline, which is April 18.

I think as we've seen mask requirements be eliminated throughout the country, and in Hawaii here, we were actually the 50th of 50 states to announce an adjustment to the requirement for masks in indoor settings, so people really have evolved policies around the country on this.

And with airplanes in particular having such great circulation, I feel like we're coming to a point where that can be lifted. But of course, it's up to the Federal Aviation Administration or the Department of Transportation. And they'll do that in consultation with the CDC.

- And we certainly are still seeing an interest in people flying. There is a recent study by Deloitte shows that 67% are likely to travel for business in the next three months. 19%, though, said technology has replaced the business travel that they might do. But you have 53% of people surveyed saying that they do plan to spend on leisure travel in the next four weeks. How do you adapt your business in terms of business and leisure travel, as well as this sort of hybrid model that we're seeing, depending on if you work from home or extend your business stay in to leisure?

PETER INGRAM: With our focus on serving the needs of people traveling to, from, and within the islands of Hawaii, leisure is really the core of our business. And that was true before the pandemic. It will be true when the pandemic is in the rearview mirror. So we're well-positioned for that. And the technology changes have been really significant over the last couple of years.

But you cannot Zoom a Hawaii vacation. You've got to come here and be in the environment and on the beaches to take advantage of it. And so we think that the long term trend towards leisure travel is going to continue, and demand for that remains very, very high. You're making us all very jealous over here with you there in Hawaii. Thank you so much, Peter Ingram there, Hawaiian Airlines CEO and President. Thank you for your time.