Making It

Hawaii works hard for its money. We took a look at 12 different businesses—from Matson to L&L Drive-Inn to a downtown parking garage—to find out just what it takes to make a living in paradise.


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(page 3 of 4)

Hawaiian Airlines

How it works: Few industries are more competitive than the airline business. Its capital-intensive nature means price wars are almost inevitable. Once Hawaiian Airlines buys its aircraft, fuels them up and hires the pilots and flight attendants, the incremental cost of carrying one extra passenger is very small. “The temptation is to sell that last seat for whatever you can get for it,” says Peter Ingram, Hawaiian Airlines’ chief financial officer. “It’s essentially found money, in the short-term sense. The challenge is that if you get into the practice of selling that last seat very cheaply, people come to expect it, and the market drives down prices and squeezes profit margins.”



Sardines: In a time of $39, $19 and even $1 fares, the airline’s best chance of recouping costs is to pack each flight as full as possible. In the first half of 2007, Hawaiian’s planes were 87.3 percent full, on average—significantly higher than the industry-wide average of 78.8 percent.

People movers: In 2006, Hawaiian Airlines flew about 17,000 people each day.

 

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