New air service to Hawaii in 2017 is expected to bolster Hawaii’s economy by millions of dollars and help the state reach a sixth straight year of record-setting tourism performance.
The added flights could bring an extra 102,000 visitors to Hawaii this year, generating 2,191 more jobs and adding another
$180 million in direct visitor spending and $21 million in state tax revenue collections, according to Ailevon Pacific Aviation Consulting, which has managed the Hawaii Tourism Authority’s air service consulting for a decade.
“It’s a conservative estimate,” Brad DiFiore, Ailevon Pacific’s managing director, told the HTA board Thursday. “Strength is shown in all major markets. We anticipate slow but steady growth across most major market sectors over the next 12 months.”
Daniel Nahoopii, HTA director of tourism research, said the results are based on an additional 145,000 air seats coming into Hawaii’s market through new service. Before airlines added additional seats, an earlier estimate predicted Hawaii’s total seat count for 2017 would reach 11.96 million, a 0.5 percent decline over 2016. New service could help HTA realize its goal this year to bring in 9.1 million visitors, who will spend $16.1 billion. Last year, the fifth consecutive year of tourism gains, arrivals rose 3 percent to 8.94 million, while spending increased 4.2 percent to $15.61 billion.
Air Asia, which is scheduled to begin four-times-a-week service on June 28 between Honolulu and Osaka, Japan, with continuing service to Kuala Lumpur, Malaysia, will open Southeast Asia to direct, low-fare service, DiFiore said.
Hawaiian Airlines expanded its Tokyo service in late December with thrice-weekly flights between Kailua-Kona and Haneda International Airport and four-times-a-week service between Honolulu and Haneda. Those flights complemented the daily service that Hawaiian had offered between Honolulu and Haneda, as well as between Honolulu and Narita International Airport.
It will be an especially good year for neighbor island air-seat capacity, said DiFiore, noting the new
Kona-Haneda service.
“January was the first full month we saw the positive impact of Hawaiian Airlines’ new nonstop service between Haneda and Kona,” HTA President and CEO George Szigeti said in a statement. “As we had hoped, this new route provided a tremendous boost to the island of Hawaii in January, with visitor arrivals from Japan increasing by 30.6 percent. Kauai also realized a 26.6 percent growth in visitor arrivals from Japan due to increased air service to Honolulu.”
DiFiore said the second half of 2017 looks even more promising for air serv-ice. In July, United Airlines is scheduled to add a daily seasonal flight between Kailua-Kona and Denver. In December, Delta Air Lines is expected to add daily service between Maui and Salt Lake City and Lihue and Seattle, and Virgin America is expected to start daily serv-ice between Kailua-Kona and San Francisco.
DiFiore expects positive domestic growth based on the strength of the market. The merger of Alaska and Virgin America, along with strategic moves at the Los Angeles and Seattle airports, will drive U.S. West growth, he said. The introduction of the A321neo aircraft by Hawaiian Airlines will increase service across the U.S. West and the U.S. East, which also will be served by a surplus of wide-body equipment, DiFiore said.
Oceania and South America have shown strong growth, and there are growth opportunities in Japan, Hong Kong, Southeast Asia and Europe, he said. However, increased capacity from China will be limited by the expiration of a Chinese-U.S. bilateral air services agreement, DiFiore added.
Continuing to attract a strong pipeline requires strong relationships and competitive incentives, he said.
“We rely too often on the appeal of the Hawaii brand alone,” he said. “Airport incentives alone can amount to millions. Hawaii offers none. The burden falls completely on HTA, which cannot provide truly competitive packages.”
Incentives from other U.S. airports typically include fee waivers for landing, parking and facility use, terminal rent waivers, direct marketing funding and minimum revenue guarantees, he said. Foreign airports are even more aggressive, DiFiore said.