President, Chief Executive Officer & Director, HAWAIIAN HOLDINGS INC
Hawaiian Airlines CEO Peter Ingram joins ‘Spotlight Hawaii’
Hawaiian Airlines CEO Peter Ingram joined the Honolulu Star-Advertiser's “Spotlight Hawaii” livestream show today and ...
About Peter Ingr
Peter Ingram, president and CEO of Hawaiian Airlines, has been discussing the airline's recovery from the COVID-19 pandemic and the impact of the 2023 Maui wildfires on tourism. In September 2023, Ingram stated that while demand from North America had fully recovered, the aftermath of the Maui wildfires had "crimp[ed] some of the visitation to the island of Maui" and that the airline was "not back to full strength" in that market. He noted that the airline's revised third-quarter revenue projections were "really driven by the unique situation in Maui," not a broader decline in demand. Ingram also discussed the airline's new cargo partnership with Amazon, describing it as "a really good opportunity for us going forward" that would provide "a new source of Revenue" and help diversify the business away from the passenger market's cyclical risks. Ingram has also addressed operational challenges and fleet modernization. In December 2023, he apologized for recent flight disruptions, attributing them to a "very challenging operation" where the airline "pushed a little bit too hard" to move guests, as well as a system failure from a third-party provider. He highlighted the upcoming introduction of Boeing 787-9 Dreamliners, with the first aircraft expected to enter passenger service in early 2024, and noted that the airline was "continuing to hire for anticipated growth" while partnering with Honolulu Community College to expand aviation mechanic training. Regarding the broader economic outlook, Ingram said in late 2023 that "the information we're looking at shows that demand is strong and remains strong," and he expressed confidence in the airline's trajectory.
Transcript (23 segments)
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Ryan Kalei Tsuji0:04
Come to talk and to take your questions live. From the nation's capital to Honolulu Hale, from the state legislature to the fifth floor, we bring the experts to you and ask them what you want to know. Spotlight Hawaii with Yunji Denise and Ryan Kalei Tsuji on the digital platforms of the Honolulu Star Advertiser.
Well, good morning and thanks for starting your week off with me. I'm Ryan Kalei Tsuji. Yunji Denise has the day off. This is Spotlight Hawaii on the digital platforms of the Honolulu Star Advertiser. This morning, we're catching up with a familiar guest. We've spoken to him a few times in the past. Always great to get an update of how things are looking in the landscape of tourism. Joining me this morning is Peter Ingram from Hawaiian Airlines. Good morning, Peter. Thanks so much for joining me.
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Peter Ingr0:58
Hey, Ryan. Good to be with you today. Just talk about some of the summer travel and what we're seeing here in our islands. What are you focusing on Hawaiian Airlines with overall bookings and how this summer season is shaping up?
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Ryan Kalei Tsuji1:09
Yeah, the summer's shaping up to be strong all around. We've seen continued really strong demand from the US mainland. That's been going on really since the Omicron surge over a year ago now. We've seen strong demand and strong load factors, and that's continuing into this summer. So steady as she goes there. Our international business is also recovered well with Australia, Korea, New Zealand performing well, and over the last six or eight weeks, we've really started to see Japan outbound demand picking up, which is very encouraging because obviously Japan is a huge part of the travel equation here in Hawaii, and it had been the part of our business that really hadn't shown signs of recovery. We're starting to see really good bookings for the summer. We expect load factors to be much closer to historical levels over the next couple of months, and it'll be great to have the Japan visitors back in numbers in Waikiki. That's going to be very important for a lot of businesses in our community that rely on those visitors.
Has it been surprising to you when talking about Japan and the numbers that it's maybe taken this long to see this uptick? Because there has been a lot of talk by tourism officials and people in the industry who have been watching the Japanese market that are saying it's coming slowly, and yet it really has not materialized. Are you surprised that it's taken this long for us to see some of these upticks happen?
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Peter Ingr3:03
Yeah, I've been a little bit surprised by it. When you think about how the rest of the world responded to pandemic restrictions loosening, whether it was the US mainland or Western Europe, it was almost like as soon as people were able to travel again and get back to those experiences that they love, they were shot out of a cannon and were really ready to go and start traveling the world. We originally thought we might see something similar in Japan as restrictions were loosened, but it didn't develop. It took a lot longer, and I think it's a reflection of the very conservative nature of the Japan population, and also a reflection of the fact that they took a very cautious approach during the pandemic, especially compared to the US mainland, but even compared to Hawaii where we were more cautious during the pandemic than the rest of our country. I think it's just taken a little bit more time for people to feel comfortable and get ready to travel again, but I'm encouraged with the signs we've seen over the last couple of months, and it looks like things may be shifting into a more positive phase in terms of visitors from Japan coming to Hawaii. That's great news for us and for a lot of others.
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Ryan Kalei Tsuji4:32
You know, over the last few months, Hawaiian experienced some technical issues with your website as well as just some other things that you had to navigate through and work through that caused some cancellations and delays. If you can really talk through maybe what happened, how the company has resolved some of these technical and operational issues.
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Peter Ingr4:50
Yeah, sure. I'm happy to talk about that. Certainly, I want to start just by saying to our guests who may have had their travel plans disrupted by these issues, we sincerely apologize. We know when people make a booking with Hawaiian Airlines, they expect us to deliver them on time, they expect to be delivered safely and with outstanding hospitality, and we weren't able to fully live up to those commitments on a couple of days recently, and that is something that we're committed to working to make better. There were really two separate issues that came up. One related to a very significant system transition that we were implementing in the middle of April. We had a lot of work over the last year and a half from teams throughout our company, not just in our IT department but throughout the business, getting ready for this transition. When we made the overnight transition, the systems all started up and things looked like they were going well, but shortly after completing the cutover, we had two technical issues that were pretty significant. One affected the availability to search for fares on our website, and it took us some time to resolve that. The other related to some of the transition passenger records not being able to be recognized by our kiosk, and that caused a lot of snarled activity in the airport as people had to see agents and there was a lot of manual work that needed to go around. We actually didn't cancel any flights because of that, but we ran a poor operation for a couple of days. Our on-time performance was nowhere near up to our standards, and it took us longer than we would have liked to resolve it. The second issue happened a couple of weeks later. The root cause of it was a failure by a third-party provider that runs a lot of the communications networking not just for us but for a lot of other local businesses to have their computer systems connected elsewhere in the world and throughout Hawaii. They had a power failure that knocked all the servers offline. The power failure was on one hand fairly quickly resolved, but with some systems it's very complicated, and when they're not shut down properly, it's hard to start them up again. You've got to run some sequences and some testing, and that caused us again to lose a couple of our major systems for several hours over the course of a Friday morning. We did have a number of flights that were disrupted by that, including some cancellations, and it was again an overall terrible experience for our guests and something that we've got to make sure that we've got better procedures in place should it ever happen again. I hope it never will happen again because something like this shouldn't happen at all, but I apologize again to guests who were disrupted by these things. You expect better of us, and we expect better of ourselves.
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Ryan Kalei Tsuji8:37
You know, one of the other things that is happening right now, of course, is the construction work and repairs being done to the reef runway. I'm wondering how that work has been going, if you can give us an update on that and how that may also be impacting your routes, if it is at all. What updates can you give us on the work being done there?
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Peter Ingr8:54
Yeah, for people who don't know, Runway 8L at Honolulu Airport is the main runway for arrivals into the airport, and it's really integral to the good functioning of our major hub. That runway was for the vast majority of seven months out of commission as it was widened and resurfaced. It was a construction project that was executed by the State Department of Transportation between the beginning of October and the end of May. The consequences of that and the consequences of how air traffic control was managing the traffic to take account for the runway being unavailable was that our on-time performance wasn't nearly where it historically has been, as we've historically been a national leader in terms of operating on time on a consistent basis. During the course of the construction, air traffic control limited the number of flights that were coming into Honolulu, and one of the things that resulted is that often our flights from the neighbor islands, from Maui and Lanai in particular, would get held on the ground waiting for air traffic control approval to take off. These holds could take 20 minutes, 30 minutes, sometimes upwards of an hour. That doesn't just delay one flight; it delays all the other flights that are going on with that aircraft the rest of the day. Of course, with our neighbor island operation, we're really conditioned around having a network where the aircraft are up and down all day long moving on these short flights within the islands. So our on-time performance was pretty bad. It was a difficult period, and it disrupted a number of other things like our baggage handling and making sure we have staff at the right places because we were running off schedule. The good news is the biggest part of that construction project is done. Runway 8L opened again a couple of weeks ago. Since then, it's not perfect and there's still some work going on on the runway, but it's open in a shortened state. We're able to use it again. Air traffic control has begun to adjust their procedures, and it's reflected in our on-time performance, which has gone up about 20 percentage points literally over the course of a couple of days with the runway being open. We've still got some work to do to get it back to the 90% range where we normally are, but we've been operating pretty consistently in the 80s and running a better operation. It really is helpful for us and for the whole aviation system in the state. So it's great to have that runway back up and running.
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Ryan Kalei Tsuji12:04
Yeah, good to hear about that. Some other good news that was also announced by Hawaiian Airlines was the new cabin designs for the 787. You guys previewed and reviewed those designs to the public. There was a lot of buzz and a lot of excitement around that. What can you tell us about some of the unique features of this aircraft that people might be looking forward to, and when do you expect to roll those out?
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Peter Ingr12:28
Yeah, the 787 is something we've been waiting for a long time. If you remember, we actually ordered our 787s back in 2018, right around the same time that I became CEO of Hawaiian, and we expected to have them in service long before now. But at the beginning of the pandemic, when there was so much uncertainty, we pushed our delivery plans back. Then when we were ready to get started and going again, Boeing was having some challenges that they had to work through with producing the aircraft, and they pushed the delivery schedule back. But early this year, we firmed up a schedule. We actually ordered two new aircraft, two additional aircraft, so we're going to have a total of twelve 787s coming in over the next several years. The first one is going to arrive to us before the end of this year, and it'll go into regular passenger service in the early part of 2024. By the end of 2024, we'll have four of these aircraft flying. As you mentioned, what we recently did was unveil the cabin inside those airplanes. It's something that we've had to keep a secret for a long time because these were decisions that were made a while ago. In fact, one of these aircraft has already been produced, so a number of our team members have been to the Boeing facilities and have been able to take a look at it. The most notable feature that I think people will understand is the expanded front cabin on this airplane. If you think about our A330 aircraft today, we've got 18 seats in the front cabin. The 787 is going to almost double that to 34, so it's going to go all the way back to the second door of the aircraft. We've got a brand new seat that is going to be incorporated in that airplane, obviously with a lie-flat product like we have on the A330, but a very comfortable seat. In fact, it's got a door that people can close for privacy if they want during the flight. Every seat will have direct access to the aisle if people need to get up to get their hand baggage or move around the cabin. I think people are absolutely going to love it. One of the things that is exciting about the 787 is it's a really incredible aircraft from the position of passenger comfort. Because it's made with carbon fiber instead of aluminum, you can pressurize the aircraft a little more, so people don't feel as tired at the end of a flight because it is pressurized to a different level of altitude than you can with an aluminum aircraft. There's a lot of things to really be excited about on this airplane: bigger windows, dimmable windows so you don't need a window shade. It's really cool, and we can't wait to get them. Our employees are excited, and I think our guests are absolutely going to love it when they get on the airplane.
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Ryan Kalei Tsuji15:57
Yeah, a lot of buzz about that after those images were released. Recently, there were some new routes that Hawaiian has also added to the Cook Islands and Fukuoka. What can you tell us about what you see with these routes and why Hawaiian decided to see these markets as an opportunity to grow?
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Peter Ingr16:15
Yeah, well, Fukuoka is one that we were flying, and as we're resuming our flying into Japan as it begins to open up, we started Fukuoka back up at the end of April. That restores all but one of our pre-pandemic Japan routes. So we've got Fukuoka, we've got Osaka up and running, we've got Haneda and Narita in Tokyo running. The one piece that is not back yet and will be coming back likely sometime next year is Sapporo. So it's great to be able to give people connections to some different parts of Japan. I know there's a lot of cultural ties here in Hawaii with the region of Japan in the south where Fukuoka is, and we're glad to have put that connection back on the map again. The Cook Islands is another exciting one. We're flying to the Cook Islands starting a couple of weeks ago, one round trip flight per week. This is a route that if you go into the wayback machine, Hawaiian flew many, many years ago with DC-9 aircraft. We haven't been flying to the Cook Islands for decades now, but over the last couple of years, the government of the Cook Islands reached out to us looking to create connections not just between the Cooks and Hawaii but also between the Cook Islands and the United States. Of course, our schedule with so many points on the US mainland that we connect to was a natural fit for them as they look for ways to have people from the US be able to access the Cook Islands. We've worked to partner with them on how that route can work, and we're excited to be back. Like everywhere else where we fly in the Pacific, there are always important cultural and historical ties between these islands and Hawaii, and we were really excited to be able to make that connection again.
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Ryan Kalei Tsuji18:36
You know, we've talked to many tourism officials here on this program, and one of the words or phrases that we're hearing a lot of these days is this idea of sustainable tourism or regenerative tourism that is being pushed by these officials as we talk about how to manage tourism in our islands post-COVID. Do you think this idea of sustainable tourism is something that is possible, and maybe what do you think Hawaiian Airlines' role might be in helping to achieve this idea of a regenerative tourism market?
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Peter Ingr19:06
Yeah, I think it's possible. It's not only possible, it really is essential. If you think about why people love traveling to Hawaii, an enormous part of that is the natural beauty of Hawaii and the culture. If we want to sustain that for the long term, we have to make sure we're executing our essential tourism industry in a way that preserves and enhances the environment and the sites that people like to come and visit. We've thought this was important for a long time. This isn't something that just came up with the pandemic over the last couple of years. For us, there are a number of things we can do. First of all, this is going to be an ongoing conversation, and as Hawaii's flagship airline, it's important for us and our employees to be a part of that conversation. We've got a role being the first point of contact with Hawaii to make sure we're getting information to our guests. You see that reflected in some of the communications we have before our trip, some of the videos that we have on our airplane where we're showing Hawaiian culture and Hawaiian sites, and we're sharing messages with people encouraging them to act sustainably throughout the course of their visit to Hawaii. I think that's something we've been committed to for a while. We're going to continue to be committed to it, and we want to partner with other groups in the community, with our governments, and with other elements of the travel industry to make sure that we're growing our business and sustaining it in a way that is going to be effective for the long term.
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Ryan Kalei Tsuji21:12
In the past, we've spoken to you about some of the other challenges that were presented. At one point, there was seemingly everyone in the state, there was some labor issues in terms of getting adequate workers, getting enough people to fill some of these vacant positions. Where are you folks at right now with your overall workforce, being such a critical player in Hawaii's economy and being an employer of Hawaii workers? Is there an area where you still need more support, and how's the workforce looking for Hawaiian Airlines at this point?
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Peter Ingr21:40
Yeah, right now, I would say particularly relative to the early part of last year, we're in really good shape, and we've made a tremendous amount of progress. Last year, we hired over 1,400 people into our business, so an enormous amount of hiring and training was going on throughout the organization. Every single labor group had hiring needs as we built back our business and built back the scale of it to where it was before the pandemic. In doing that, there were a lot of areas where labor was tight, and I would say the job market is still pretty tight, but we've been able to fill our roles and we've been able to get back up to pretty full staffing across the operation. We're currently fully staffed on our flight attendants and our pilots. We're fully staffed, although we're continuing to hire for growth that we anticipate later this year and into next year. But we're largely caught up in all our hiring and training in those areas. The areas where it's still a little bit tight is around our airport operations. While we're certainly in better shape than we were a year ago, there is a lot of turnover in some of those jobs, so we've got to continue to hire and train and recruit and bring people into the business, and that will be an ongoing thing. The other area that we've put some really important programs in place is around hiring for our technical operations, particularly our aircraft mechanics. I think we've talked before about some of the partnerships we have in place with people in the community on this. A very important one being with Honolulu Community College, where we've partnered with their aviation mechanic training program to provide some instructors so that they can expand the size of that program, and so they will have access to a larger pipeline of trained mechanics that we can bring into our operation in the years ahead. That's something that doesn't fill every job need in the very short time, but we think it's a smart thing to do to build the pipeline for the long term. Since we're talking about careers of people who can work 30, 40, 50 years as a mechanic, we've got to start building that pipeline and really explaining to people what the opportunities are, because there's a lot of fantastic careers you can have at an airline that people don't see quite as visibly as the pilot and the flight attendant. There's jobs in IT, there's jobs behind the scenes, and those mechanic jobs that are behind the scenes, but every bit is important to delivering the product that we do every day.
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Ryan Kalei Tsuji24:55
You know, I know that we had talked at the start of this broadcast about what it looks like for the summer, and you're optimistic about the numbers that you're seeing so far. But I'm wondering, as we begin wrapping up here, looking at the rest of this year, what are you looking forward to in terms of overall growth and some of the projects that I'm sure you guys are still working on? But overall, the numbers, how confident are you that we're going to continue to see a steady stream of people in the visitor industry coming to Hawaii, and your thoughts about as we look at the next few quarters into the end of the year?
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Peter Ingr25:24
I feel pretty good about the outlook right now. I think if you listen to the media, whether it's locally or nationally, there's been a lot of talk about are we on the cusp of a recession, and is the rise in interest rates and some of the inflationary pressure that's been going on in the economy going to push the economy into recession? I don't have a crystal ball that gives me the perfect answer to that, but what I can tell you is the information we're looking at shows that demand is strong and remains strong, and we haven't seen any sign of that weakening. So you've always got to be prepared for what's around the next corner, but based on what we're seeing right now, we expect to move from a period of strength to strength, and we think there's really good opportunity for the rest of the year and into next year as we start taking those 787s and looking at opportunities to expand our route network.
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Ryan Kalei Tsuji26:28
Alright, Peter Ingram, thanks so much for joining us here on this holiday. We appreciate you taking time to give us an update on all the things that are happening there at Hawaiian Airlines. Thanks so much.
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Peter Ingr26:40
Thanks, Ryan. Always great to connect with you.
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Ryan Kalei Tsuji26:46
A lot. Well, great to hear from him as we get an update from Hawaiian Airlines. For those of you who may have missed any portion of the broadcast, encourage you to go back. Again, this will always live on the platforms of Honolulu Star Advertiser. Also can consume it as a podcast or catch it on television on channel 50 for the rebroadcast later this evening. But you heard from the CEO of Hawaiian Airlines there saying that things looking pretty optimistic as we head into the summer months with a steady stream of visitors. He said it's coming in from the markets that Hawaiian Airlines services. He also noted that they are beginning to see in the last few weeks an uptick in the Japanese market. Of course, this is an area where tourism officials have at sometimes been scratching their head wondering when the Japanese would slowly begin returning to our islands, but you heard from Peter Ingram they're saying that they are seeing some growth in these areas and these markets. So only time will tell if we continue to see a large influx of the Japanese market, but again that has been an area of some concern for tourism officials, but it sounds like things are looking up there for the most part. He also addressed some of the technical issues that the company faced over the last two, and addressed both problems that happened somewhat back to back, but that the company was working to not only make sure that it does not happen again but also making sure that they reach out to these guests that were impacted by some of these technical issues, but seem to be in a much better position moving forward, which will include of course the work that has been done to the reef runway. You heard an update from him saying that things are moving much smoother now that that project has been completed by the state, which has improved their overall time and their on-time percentages seeing it grow, he says, over that time. We also heard from him about the new 787s. The aircraft that was released, or those images that were released about a month ago, a lot of excitement in town of people seeing what these new planes will look like. You heard from him saying they expect to get one later this year with the first one being in operation in early 2024, with four of them being next year, but overall twelve 787s being added to the Hawaiian Airlines fleet as they continue to grow. We talked about the Cook Islands as well as the resumption of Fukuoka and some of the other markets as well. So always great to hear from Peter Ingram and get an update on what's happening over there at Hawaiian Airlines and really helping to get a pulse of where things are at in tourism overall for our islands. On Wednesday, we're going to be switching gears focusing in on Red Hill and some of those who have been impacted by the water issues that are happening there. We'll get an update on where things stand. We'll be talking with two people who are working intimately to really help to keep tabs on what's happening and really making sure that what the military has agreed to and has committed to are eventually on time, and we look forward to that conversation. The governor will also be joining us here on Friday for that episode as well. So we thank you for tuning in here to Spotlight Hawaii. We'll see you right back here on Wednesday. Aloha.