Hello All, Three months ago we discussed whether Hawaiian was more likely to order A220s, E-Jets, or A319ceos to replace its aging 717 inter-island fleet. This blog saw an order for second-hand A319ceos as the most likely scenario. After...
Hello All,
Three months ago we discussed whether Hawaiian was more likely to order A220s, E-Jets, or A319ceos to replace its aging 717 inter-island fleet. This blog saw an order for second-hand A319ceos as the most likely scenario.
After the announcement of the merger with Alaska Airlines, those fleet plans will be put on hold until the airlines know whether the merger can proceed. In this blog post, we will assume the merger can proceed.
Nearer-term impact
This blog does not expect the merger to impact the A330-200 replacement plans with the 787-9. The carrier is not going to ditch twin-aisle operations because they are better suited for some markets (HNL-HND/NRT/LAX) and single-aisle lack range to fly to some destinations in Asia (ICN) or the US East Coast (BOS, JFK).
Once the merger can proceed, the focus will be the aging intra-island 717 fleet replacement. This is where the impact will likely be the highest.
Alaska Airlines is known to be a pro-Boeing customer. It made the unusual decision to retire its A321neo fleet in favor of 737-10s and 737-8s. Instead of ordering the A319ceo, expect Hawaiian Airlines to go another route.
This blog expects Alaska Airlines to use a combination of its older 737-700s and 737-800s to replace the 717s for the inter-island network. The CFM56 engines are reliable enough to withstand the tough operating environment. The merged carrier could also use Horizon Air E175s to serve the thinner routes (for example Hilo-Kaluhui).
Once the 737 NGs become too old and the Leap 1A reliability improves enough, the carrier would replace the 737-700s/737-800s with 737-7s or 737-8s.
Uncertain impact on A321neo fleet
Hawaiian Airlines operates 18 A321neos. As we saw in last week’s article, the 737-10 will have a range comparable with the A321neo that has 1 auxiliary fuel tank. It is enough for operations from Hawaii to the US West Coast + Las Vegas/Phoenix.
The only potential problem is operations from Kahului’s (OGG) short runway to Portland and Las Vegas. While the A321neo has adequate field performance for operations from OGG to the US West Coast, the 737-10 is probably too tight. The 737-10 would also struggle at the hot airports of Las Vegas and Phoenix.
The merged Alaska Airlines and Hawaiian will have to weigh whether it is more profitable to operate 737s across the whole group and forego A321neo operations from Kahului (with 737-8s instead), or keep A321neos. It also depends on whether the group thinks there are enough longer routes that could justify A321XLR operations. It is not guaranteed the A321XLR makes the most sense because it could be more profitable to operate twin-aisle aircraft at lower frequencies.
Expect Alaska Airlines to at least wait until the 737-10 enter into passenger service and assess the actual aircraft performance to make a final decision on the fate of Hawaiian’s A321neo fleet.
Conclusion
Should the merger between Alaska Airlines and Hawaiian Airlines proceed, expect the latter’s inter-island 717 fleet to be replaced with older Alaska Airlines 737 NGs. The longer-term impact on the A321neo fleet is harder to predict and will be an exercise in weighing the pros and cons.