Hawaiian Airlines CEO Mark Dunkerley said it is "illogical" for his company to spend $25 million a year on free food and drinks, but it is going to keep doing it anyway.
The state’s largest carrier said Monday it is ratcheting up its economy-class in-flight service to the mainland to include a new menu, a complimentary glass of wine and a free tropical cocktail before landing.
"In today’s competitive world you cannot justify providing complimentary meals on a traditional business model," Dunkerley said. "It simply does not pay for itself in terms of extra traffic and all of the other things, which explains why essentially everybody has taken all that free food off the airplane. They’re the ones that are being logical. We’re being illogical by actually investing heavily in this area. We’re doing it to create a sense of difference in association with the community that we call home and the responsibility of selling Hawaii. … It’s part of who we are, and it’s what makes us different from everybody else."
The enhanced in-flight service strengthens Hawaiian’s claim of being the only U.S. carrier serving Hawaii that offers complimentary meals in all cabins.
The upgraded food service, which began Wednesday, is available on all of Hawaiian’s flights between Hawaii and North America and showcases Hawaii products. The new economy-class breakfast menu includes Hawaiian sweetbread with cream cheese and guava jelly; Tanioka’s dried mango, papaya and pineapple slices; and a macadamia nut cookie. A new lunch menu has ginger chili or teriyaki chicken with steamed rice and vegetables and dessert of mango cake or Kona coffee cake. A glass of red or white wine will be served in the main cabin with lunch or dinner at no extra charge. A tropical cocktail featuring Koloa Rum from Kauai and an island-style snack, such as Maui Style Potato Chips, will be served two hours before landing.
Hawaiian Chief Commercial Officer Peter Ingram said food is one of the areas where the airline wants to stand out.
"We want to differentiate our product, but if we try to differentiate our product on every single aspect of it, our cost structure would be so high that we’d be out of business in a heartbeat," Ingram said. "So we’ve made a decision that food is one of those areas where we are prepared to invest beyond what other carriers are doing to make that a differentiating element. Southwest Airlines made a decision that carrying the first bag for free is something on which they’re going to differentiate their business. Food … is part of the Hawaii host culture. It does mean a little bit more in this community."
The announcement of the enhanced in-flight service coincided with Dunkerley telling a media luncheon at the Halekulani Hotel that the airline has filed a letter with the U.S. Department of Transportation requesting that it be awarded a second Haneda route. Hawaiian’s request was spurred by Delta Air Lines seeking permission to transfer its on-again, off-again coveted Haneda route from Detroit to Seattle.
Hawaiian, which added Japanese flights to Osaka, Fukuoka and Sapporo (starting Oct. 30) since inaugurating Haneda service in November 2010, initially sought two of four available Haneda routes, but received only one last year after the DOT decided to spread them out regionally and gave American Airlines a slot from John F. Kennedy International Airport in New York and Delta slots from Los Angeles and Detroit.
In its letter Monday to the DOT, Hawaiian said it finds Delta’s request to move its Haneda service from Detroit to Seattle "without merit and completely counter to the carefully crafted distribution of frequencies established by DOT" in its order.
"Hawaiian remains committed to increasing its frequencies to Haneda," it said in the letter. "Should a new selection proceeding be initiated, Hawaiian will actively participate to win that second frequency."
Hawaiian said Delta’s request to move its Detroit service should be denied, as should American’s request to allow it the freedom to serve Haneda from any gateway.
"DOT should initiate a proceeding to reallocate the frequency given Delta’s determination that its awarded operating rights are no longer viable," the letter said.
Dunkerley also reiterated Hawaiian’s desire to enter the Chinese market when the time is right.
He said the airline continues making strides toward someday beginning Chinese service. He said Hawaiian has sales teams in China, has partnered with China International Travel Service to bring groups of Chinese visitors to Hawaii and has increased frequency on its Seoul route to daily and changed the schedule so that the aircraft sits on the ground in South Korea for four hours to accommodate connections in both directions.
"Our strategy is to try to learn the things we don’t know about how to sell in China, how to be effective before we have to invest in putting a new flight in there," Dunkerley said. "We want to get there, but each new flight (that Hawaiian initiates) is $100 million in terms of costs every year. If you think that last year we made $45 million (in net income), you don’t have to be badly wrong to take yourself out of the black and into the red. We do have aspirations for China. We’ve very focused on it. We’re trying to work through how we’re going to get into that. Getting there will be an important part of our future. The when we’ll get in there is when we have a level of confidence that we can get in there successfully."
