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Q: What’s your outlook on federal aid, both what’s coming now and any future assists?
A: As an essential business, we are grateful for federal loans and payroll support made available to airlines, which have been profoundly affected by the pandemic. This assistance has helped our employees stay on the job providing vital transportation links for both essential travel and cargo, and kept us in a position to recover our full schedule when demand returns to support the economic recovery in Hawaii and elsewhere.
While this aid is welcome and critically needed, it is temporary and only partially offsets the extraordinary financial impact the pandemic and travel restrictions continue to have on our business.
How has the airline adapted to COVID safety protocols?
The health and safety of our guests and our team have been our No. 1 priority, and we’ve adapted as science’s understanding of COVID-19 has evolved. We’ve taken a number of measures to lower risk to our guests, including frequent cleaning of our airport spaces and electrostatic disinfection of hard-to-reach surfaces in our aircraft cabins, which are either equipped with hospital-grade air filtration or continuously bring in fresh air.
We require our guests to complete a health acknowledgement form during check-in. We have modified boarding and deplaning procedures to increase physical distance, and also mandate face masks or coverings for our employees and guests.
The end result is that — as researchers from the Harvard School of Public Health have confirmed — a U.S. commercial airplane is among the safest indoor spaces you can be in these days.
Can you summarize the losses and changes in the workforce?
We were fortunate to enter the crisis on strong financial footing. But as travel ground to a halt after the state’s quarantine was imposed, we were burning through as much as $3.5 million in cash every day. After reviewing all of our costs, renegotiating contracts, reducing executive compensation and deferring nonessential expenses, we have been able to reduce that rate to around $2 million per day, which is still a lot.
To get us through this period, we have taken on significant amounts of debt — both government loans and private market financing. Even with that, we knew that we were going to need to be a smaller airline for the immediate future. That led us to by far the most difficult decision we’ve made during this period — to reduce our staffing by about a third. Many of our employees elected to accept voluntary leaves or early retirement, which reduced our need for involuntary furloughs and layoffs, and is a testament to their spirit of ohana and sacrifice.
Throughout this challenging time, our team has amazed me with their incredible work under difficult circumstances, and they inspire me every day. I’m personally committed to getting Hawaiian growing again so that we can bring my furloughed teammates back to the careers they love.
How is Hawaiian’s pre-travel testing program going?
The state’s pre-travel testing program, in its original form, allowed for some degree of economic recovery while keeping Hawaii’s infection rate within the capacity of our health care system. We embraced this approach and have invested substantially in setting up our own network of testing labs on the U.S. mainland, exclusively for the use of our guests.
This is a major point of difference between us and other airlines serving Hawaii — we can make it seamless and affordable to get tested.
Ultimately, if we as a community want travelers to do the right thing and get tested, we have to find more ways to make it easy and affordable for them to do so.
Some of the more recent policy changes have created uncertainty for travelers. We’re hopeful that there’s opportunity to revisit these policies in the new year and come up with rules that are simpler, more consistent across the state and harmonized with new international standards that are emerging. That is the key to both rekindling our state’s economy and keeping our communities safe.
When do you see the industry revenues recovering?
The vaccination effort that is starting now gives us hope. But we know the recovery will be gradual and extend beyond 2021. The pace of demand recovery will be correlated with the success of vaccinating people here, on the U.S. mainland and in the international markets we serve.
As infection rates decline, we expect pent-up demand to be realized more fully. In the meantime, we need to collaborate across our community to find sensible solutions to balance public health with the need to drive our economic recovery forward.
We believe that both Hawaii and Hawaiian Airlines are well-positioned to thrive in the recovery if we can find that balance.
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The bio file
>> Title: President and CEO, Hawaiian Airlines
>> Professional experience: Joined Hawaiian Air in 2005 as chief financial officer, served as executive vice president and chief commercial officer from November 2011 through February 2018. Previously worked at AMR Corporation, parent company of American Airlines and American Eagle Airlines.
>> Education: M.B.A from Duke University’s Fuqua School of Business and graduate of the University of Western Ontario (Canada).
>> Community: Member of the House Select Committee on COVID-19 and Hawaii Business Roundtable; board of trustees, Mid-Pacific Institute.
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