United Airlines said Wednesday its plan to add flights to Hawaii will result in more than 400,000 additional seats coming to the islands next year.
The extra seats could boost state tourism by about 5 percent in 2018. Hawaii visitor arrivals reached 8.9 million in 2016 to hit a fifth straight record and local economists are forecasting that number to exceed
9 million this year.
Added competition also could lead to lower prices on flights to the mainland.
United announced Tuesday that it would increase frequency on 11 Hawaii routes from four mainland cities beginning Dec. 20.
The added United service sent Hawaiian Airlines’ stock nose-diving more than
10 percent on Wednesday.
“We expect overall Hawaii seats (on United flights) to increase 18 percent from current levels,” United spokesman Jonathan Guerin said Wednesday in an email detailing the impact of the increase.
“Our state is fortunate there is such strong travel demand for Hawaii and that United Airlines recognizes the value in expanding its service to the neighbor islands,” George Szigeti, president and CEO of the Hawaii Tourism Authority, said in a statement. “This increase in flights will also strengthen support for job opportunities statewide and give Hawaii residents more choices when traveling to the mainland.”
United said it will boost its service to the neighbor islands from Chicago, Denver, Los Angeles and San Francisco, but make no changes in its daily Honolulu service from those cities. The neighbor island service will include daily flights from Denver to Kailua-Kona, Kauai and Maui; from Chicago’s O’Hare International Airport to Maui; from Los Angeles to Hilo, Kailua-Kona, Kauai and Maui; and from San Francisco to Kailua-Kona, Kauai and Maui.
On Wednesday, Hawaiian Holdings Inc.’s stock fell $5.75, or 10.5 percent, to $48.90 to bring its two-day loss to 13.6 percent. Nearly
4 million shares exchanged hands on Wednesday, which was more than five times the one-year average daily volume.
United’s stock ticked up
8 cents to $77.56.
St. Louis-based Stifel Nicolaus &Co. analyst Joseph DeNardi downgraded his recommendation on Hawaiian to “sell” from “hold” and lowered his target for the stock price to $40 from $60.
“Hawaiian has benefited over the past several quarters from strong operational performance but also a very benign competitive capacity environment with low or no industry supply growth into Hawaii,” DeNardi wrote. “That appears to be changing.”
Hawaiian Airlines’ Chief Commercial Officer Peter Ingram said the local carrier can compete with any airline.
“We have a lot of confidence in our superior product and service,” Ingram said in a statement. “This is already reflected in our
revenue outperformance in recent periods relative to our competition generally and United in particular.”
Hawaiian is also facing more competition on international routes.
Malaysia-based AirAsia X will fly four times a week beginning June 28 between Kuala Lumpur and Honolulu with a stop in Osaka, Japan. Singapore-based Scoot is awaiting approval from U.S. authorities to fly from Singapore to Honolulu — with a stop in Osaka — by the end of this year. United also plans to launch daily nonstop service between Narita International Airport and Kailua-Kona on
Sept. 15.
Hawaiian currently offers daily flights between Osaka and Honolulu and flies three times a week between Haneda International Airport in Tokyo and Kailua-Kona.
