It’s been just more than 10 years to the month that Alaska Airlines first touched down in Hawaii.
Alaska Chairman and CEO Brad Tilden, who is in town this week to celebrate that milestone, said Monday it’s been amazing how far the company has come in making major inroads in the Hawaii market and transforming itself into the nation’s fifth-largest carrier.
“In my time with Alaska, we’ve never had a region or part of our network grow the way Hawaii has grown,” Tilden said during an interview Monday before his keynote talk at a business luncheon at the Waikiki Beach Marriott Resort. “It’s been absolutely stunning. We came into the market in the fall of 2007, and in March of 2008 both Aloha and ATA (airlines) filed for bankruptcy. That created a big void in the marketplace, and we aggressively grew into that void.”
The Seattle-based carrier, which now flies 13 percent of its overall network to Hawaii, has grown to 179 weekly flights today from 21 weekly flights a decade ago when it initiated service from Seattle to Honolulu on Oct. 12, 2007. Alaska now serves four islands from
10 destinations on the West Coast and Alaska. Next month it will start daily San Francisco-Kona service that will increase the airline’s number of Hawaii routes to 31, the most West Coast-Hawaii routes of any carrier.
Alaska, which has been growing organically about 7 to 8 percent a year for the last two decades, decided to fast-track its growth by outbidding JetBlue Airways to purchase Virgin America for $2.6 billion in 2016.
“The industry has changed a lot,” Tilden said. “If you look back to our industry 10 or 15 years ago, it was more fragmented. The industry has consolidated a lot … and we felt that with the industry becoming more concentrated that we needed to be bigger. … We thought it was going to be a good time in the industry for us to scale up a bit.”
Tilden said the Virgin name will disappear over the next couple of years.
“It’s a hard decision because Virgin does have a loyal following,” Tilden said. “They have a fantastic brand, but Alaska also has got a great brand and a really loyal following. In the airline business there’s a lot of friction to running two brands, and there’s a lot of confusion for customers. So one brand is better than two in our industry … and we just decided it was better to go with the Alaska brand.”
While the last Virgin aircraft won’t be repainted with Alaska’s name until the first quarter of 2020, the Federal Aviation Administration will consider Alaska as a single airline beginning in January.
“Our reservation system will give you one shopping experience, one airport experience and one gate experience,” Tilden said. “That system will cut over in early spring, so a lot of the most importation integration activities are going to happen in the next four to five months.”
Tilden said the company’s service and low fares have been a big part of Alaska’s success here.
Alaska’s average airfare to Hawaii was $264 one way, without taxes, for the 12-month period that ended June 30, according to U.S. Department of Transportation data compiled by Alaska Chief Commercial Officer Andrew Harrison. He said that was $30 to $40 less than American Airlines, Delta Airlines, United Airlines and Hawaiian Airlines over that same period.
Tilden said Alaska has found success by flying from secondary markets along the West Coast to the neighbor islands, with 75 percent of its mainland flights going directly to Maui, Kauai and Hawaii island.
He also said Alaska has competed against Southwest Airlines for 25 years, so it won’t be any different when the Dallas-based carrier enters the Hawaii market as early as next year.
“You have to look at competition with the idea that competition makes you better,” Tilden said. “We’re very proud of what Alaska does, and we’re confident in our operation. You can’t do anything about competition, but you get in the industry to go out and compete, and that’s what we’re going to be doing. It’s part of the business.”
