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Peter Ingram, Hawaiian Airlines President & CEO joined Yahoo Finance Live to break down Hawaiian airlines' recent earnings report and what's next for the travel sector.
ADAM SHAPIRO: So as we check the share price right now for Hawaiian Holdings, that's Hawaiian Airlines, I want to let you know that a lot of the airlines are saying they do not see a decrease in leisure travel demand because of these spikes in COVID-19 cases attributable to the Delta variant. Let's talk about the earnings quarter they just had but also where they're headed with the CEO of Hawaiian Airlines. We invite into the stream Peter Ingram, the President, and CEO of Hawaiian Airlines. It's good to have you back here, Peter.
And just want to point out to everybody, that in the quarter your revenue totaled $410.8 million. It was down compared to the second quarter of 2019 on lower capacity but the trend is in the right direction. And in August, I mean, we're here now, just less than a week from now you're going to resume even more flights to places like the Tahiti. So when do you think we might get out of the net loss situation in the earnings reports?
PETER INGRAM: Thanks. Good to be with you today. I think for us, we've seen, as you mentioned, a very strong recovery in demand, particularly on our US mainland to Hawaii routes. Also on our routes within the state of Hawaii. The challenge for our network right now is on the international side, particularly flights to Japan, Korea, Australia, New Zealand where we're really still at a fairly minimal level of demand on those routes as those parts of the world are lagging where we are in the US in terms of vaccination rate. We're hoping for some improvement before the end of the year in that regard but we really don't expect it to take hold in the third quarter given where we are right now.
SEANA SMITH: Peter, I guess how are you-- with that in mind then, the lagging international recovery, international travel recovery, I guess how big of a threat is a Delta variant not only for international travelers but also for domestic travelers heading to Hawaii?
PETER INGRAM: Well, it's something we're definitely keeping an eye on and looking to see if we do see an impact on demand as we've had cases rise here in the US and elsewhere with the Delta variant. Our demand has continued to remain fairly strong, we took a lot of bookings in the first half of the year for the second half of the year. And we're in a good position right now in terms of the book load factor on our domestic flights but we're keeping an eye on it as everyone else is.
ADAM SHAPIRO: You know, when you talk about domestic I don't know if it could ever replace what you're losing right now from international but there's this TV show, White Lotus, in fact, there's a Hawaiian Airlines plane that makes a cameo in one of the episodes, I don't want to ruin it for people. But I think a lot of us who have never been to Hawaii want to go. Does the domestic picture for you pick up in the fall and in the winter for those of us who want to get out of the cold weather in New York? It's 68 degrees in New York City right now so it's kind of chilly today.
PETER INGRAM: Yeah, typically our peak season is in the summer actually when at least in normal times when people have more opportunity to take vacation. So June, July, the first part of August are typically our peak. But we do have another peak that comes around Thanksgiving and into the Christmas holiday period, the early part of January, as people are taking winter vacations and then again at spring break. But for our flights from the US mainland, we actually maintain a fairly steady schedule throughout the year, and typically the load factors remain very high when we're in normal times and the adjustment with lower demand period is more on the pricing side than it is on the traffic side.
SEANA SMITH: Peter, there's talk with restaurants, a number of industries here, looking into requiring customers to be vaccinated in order to enter wherever it is, whether it's a retailer, whether it's a restaurant that a customer is attending. What about airlines, is this something that you're potentially looking into that someone would need to be vaccinated in order to board your plane?
PETER INGRAM: We follow the rules in the jurisdictions we serve. Here in Hawaii to avoid quarantine you either need to have a COVID test within 72 hours of travel or the more recent update and what most people are taking advantage of is the ability to enter with proof of vaccination. And so that's a rule in Hawaii as it's in place today.
We have not as an airline imposed any restrictions beyond what the governmental authorities are recommending. And air travel remains a very safe environment overall, particularly, because of the circulation of the air on the airplanes, keeping fresh air entering the cabin all the time. Anything that does recirculate goes through high-efficiency particulate filters. And so we're very comfortable with the safety of our environment and we'll continue to work with governments in the jurisdictions we serve.
ADAM SHAPIRO: I'm glad you brought up the government issue, we pay so much attention to the Atlantic routes, is there the same kind of effort from the airlines to make the case for the US government to allow those visitors from Japan and from Asia to come back in? For instance, Hawaii requires you to show you've been vaccinated or negative, so why not open those routes? Is there a lobbying effort underway?
PETER INGRAM: Well, really the restrictions that are impeding demand in the Pacific routes are those on the other side of the flight, not so much US regulations. A traveler from Japan today, for example, would have to get a COVID-19 test before coming to Hawaii, they'd have to get another one before going back to Japan, another one, a third test shortly after arrival in Japan, and still have a quarantine. So really it's those Japanese restrictions that are adding cost and inconvenience and suppressing demand.
And there's a similar situation in some of the other international places we serve. We expect that to change as vaccination rates pick up and catch up to where we are in the United States. And hopefully, our vaccination rate continues to rise here in the US, as well, and help us get the Delta variant you mentioned earlier, under greater control than it is right now.
ADAM SHAPIRO: Peter Ingram is the President and CEO of Hawaiian Airlines. It's always good to have you drop in with us.