The outlook for Hawaii air service in 2025 remains down, especially after adjustments from Southwest Airlines and following Alaska Airlines’ purchase of Hawaiian Airlines.
“The market is not what it was,” said Brad DiFiore, co-founder and managing director at Ailevon Pacific, an aviation strategy consultancy hired by the Hawai‘i Visitors and Convention Bureau, who presented airline service development insight to the Hawai‘i Tourism Authority Board last week for the first time since 2018.
“Overall, we’re looking at almost 6% down (in domestic service) by June,” DiFiore said, adding that by the summer of 2025, international seats are expected to be down another 4.1% from this year.
The decline holds appeal for some Hawaii residents who were concerned with overtourism before the COVID-19 pandemic and fear recovering visitor arrivals will strain the state’s carrying capacity. However, the air seat downturn is worrisome to those who seek to grow Hawaii’s tourism-dependent economy as the state’s distance from visitor source markets makes it primarily a fly-to destination.
The most recent visitor statistics from the state Department of Business, Economic Development and Tourism show that through October, more than 7.8 million visitors out of more than 8 milliion came by air, comprising more than 98% of Hawaii’s visitor arrivals during the first 10 months of the year.
“Right now, we are sort of in a period where there is a lower demand for air travel. We’ve seen airlines reduce capacity as a result — that’s led to fewer visitors, which means a higher (hotel) vacancy,” DiFiore said. “At some point you get to lower (hotel) room rates. At this point you may leave more budget for air travel, which increases air demand, which increases airline capacity in the market — increasing lodging demand, which leads to rising room rates and then less budget for air.”
He said Hawaii’s air service market has been destabilized for about the past five years due to myriad factors. He said first came a pandemic-related downturn in passenger demand.
“We’ve been in reduction mode since the pandemic. At some point that will, of course, change, but there are a lot of factors in the industry that are at play here,” DiFiore said.
He said another challenge for Hawaii air service is that Southwest’s 2019 entry into the market brought down fares but did not stimulate enough traffic to fill that extra capacity. DiFiore said that helped bring Hawaiian into the arms of Alaska Air Group as it struggled from the pandemic and increased competition.
He said the Aug. 8, 2023, Lahaina wildfire also upended Maui, the state’s second-biggest air market. DiFiore added that the strength of the dollar has hurt international demand for Hawaii.
Coming changes are likely to lead to more reductions.
DiFiore said Southwest is reducing Hawaii capacity by 18.8% by June, with air service at Kahului Airport and Ellison Onizuka Kona International Airport at Keahole affected the most.
“This is a lot. Southwest is going to be rationalizing its capacity to and within the islands, so across all markets we are seeing double-digit decreases except for in Hilo,” he said, adding that Southwest does not offer trans-Pacific service into or out of Hilo and its Hilo interisland service remains flat.
DiFiore said Alaska Airlines’ combination with Hawaiian Airlines has made it the fifth-largest U.S. carrier, with over 40% of the Hawaii-U.S. mainland seat share. He said the combined airline expects 1,500 additional daily round-trip seats in the Hawaii market in 2025, with daily seats between Hawaii and North America up 18% for Hawaiian and down 27% for Alaska.
“Eventually their goal is to have all flights (into, out of, and within the) Hawaiian islands operating under the Hawaiian brand,” he said, which was discussed recently during the Alaska Air Group 2024 investor day presentation.
DiFiore said significant changes to the Alaska-Hawaiian network are already occurring.
“SJC (San Jose) and LAX (Los Angeles ) have lost the most seats with PDX (Portland), SEA (Seattle) and SAN (San Diego) gaining seats,” he said, adding that the overall change in seats is expected to be down 6.6% by July 2025.
DiFiore said Alaska’s decision to relocate some long-haul Hawaiian aircraft to Seattle to provide service to Narita in Japan and Incheon in Korea also is part of the changing landscape of international air service for Hawaii.
He said Hawaii’s international seat capacity remains 29% down from pre-pandemic levels and international demand to Hawaii has dropped 34% from pre-pandemic levels, so international growth is unlikely to return in the near term.
Jeffrey Eslinger, senior director, Market Insights and Customer Relationship Management for the Hawaii Visitors and Convention Bureau, said, “International air capacity to Hawaii, especially from Japan, remains complex. While some routes show growth, overall projections indicate decreased capacity for summer 2025, highlighting continued challenges in key international markets like Japan.”
Given the projections for domestic and international seats, DiFiore recommended that Hawaii begin in the near-term opening up the lines of communication with network planning teams and attend major route development events. He said over the next two to three years, Hawaii should work to develop targeted incentive programs and begin hosting network planners, who represent markets that are air service targets for the state.
“Up until the pandemic, I would say that we had a lot of success. In general, the public didn’t feel that (aviation strategy) efforts were necessary to continue bringing airlines to Hawaii. Now, things have changed,” he said.
DiFiore identified international markets that could provide opportunities for Hawaii. He said Hawaii should maintain communication with carriers serving Japan-Hawaii in anticipation of future opportunities. DiFiore advocated for working to maintain combined capacity from Korean/Asiana and to grow Air Premia. He said reestablishing Taiwan service is viable, and would bring the benefit of connectivity to mainland China. DiFiore said efforts should be directed at rebuilding capacity in New Zealand and Australia. He said efforts in Southeast Asia and China are currently unwarranted.
But it’s not only Hawaii’s international airline seats and routes that interest locals. South Hilo Hawaii County Council member Jenn Kagiwada also wants to see some focus on restoring equitable air service to Hilo. Kagiwada recently issued a statement expressing disappointment that Alaska’s recent announcements did not include talk of adding later flights from Honolulu to Hilo, where the last flight currently leaves at 7:35 p.m., or adding a direct flight from Hilo to the West Coast.
Kagiwada said the direct United flight from Hilo to California ceased during the pandemic, and Alaska Airlines’ merger with Hawaiian provides an opportunity to reinstate an alternative for those on Hawaii island’s east side whose current options are driving to and from Kona and paying for parking or flying in and out of Honolulu — adding multiple hours and dollars onto travel plans.
“The East side of Hawaii island is significantly disenfranchised with the lack of travel options for residents to and from Honolulu in the evening,” she said in a statement. “The addition of a late-night route would allow residents to enjoy a day in the city for shopping or visiting family and friends and be able to return home to East Hawaii after dinner.”
Hawaiian Airlines spokesman Alex Da Silva said in an email, “We have been consistently increasing nonstop flights between the neighbor islands and the U.S. continent, and will continue to monitor demand for flights between the West Coast and Hilo.”
Da Silva said Hawaiian understands the importance of late-night flights and flexibility between Honolulu and neighbor islands.
“We regularly review our schedules to, from and within Hawaii based on demand and also feedback from our guests and through our Hawaii Community Advisory Board,” he said. “As Hawaiian and Alaska airlines grow together, we are committed to ensuring neighbor island travel remains accessible and convenient for our guests, and we are actively evaluating later flight departures for our neighbor island destinations.”
