Hawaii Job Question!!

[Grassyknoll]

Originally Posted by whtviper1

This is complicated. Short answer: airfare is based on what passengers are willing to pay, regardless of oil prices. Hawaii is even more complicated - record tourism for 4 straight years puts pressure on airlines to not lower prices despite falling oil - simply because the planes are full.

Another point - airlines lost $50 billion plus 2000-2010 - and in that timeframe Aloha went out of business and Hawaiian went bankrupt as little as a bit more than 10 years ago / so there is some catch up happening.

Ultimately if demand slackens airfare will go down.

Really want to see lower airfare? Hope for another airline to flood capacity with a fare war like Go! did, although that didn't turn out well.

And some airlines forward-buy their fuel and are locked in on pricing regardless of market price.

[whtviper1]

Originally Posted by Grassyknoll

And some airlines forward-buy their fuel and are locked in on pricing regardless of market price.

Hence why the Hawaiian CFO was fired last year - approving/betting wrong on fuel hedges.

By now, just about every airline is not locked in to expensive hedges - and now the challenge is to grab/when to grab/lock in cheap fuel. But if you lock in to early then you bet wrong if fuel/oil continues to drop or become a genius if fuel goes back up.

[pj737]

Originally Posted by whtviper1

This is complicated. Short answer: airfare is based on what passengers are willing to pay, regardless of oil prices. Hawaii is even more complicated - record tourism for 4 straight years puts pressure on airlines to not lower prices despite falling oil - simply because the planes are full.

Another point - airlines lost $50 billion plus 2000-2010 - and in that timeframe Aloha went out of business and Hawaiian went bankrupt as little as a bit more than 10 years ago / so there is some catch up happening.

Ultimately if demand slackens airfare will go down.

Really want to see lower airfare? Hope for another airline to flood capacity with a fare war like Go! did, although that didn't turn out well.

Understood that market ultimately dictates price. But my understanding is that fuel costs are disproportionately higher (as a percentage of ticket cost) for long distance flights (i.e. any flight out of Hawaii). So assuming the savings is substantial, I'm hoping there will be a combination of increased margin for the carrier + lower fares to the consumer, perhaps splitting the difference so to speak.

According to news items I've been reading online, fares are indeed down substantially from last year. This story suggests a 14.2% YOY drop - Airfares lower now than they've been in a while - Chicago Tribune

Let's hope this continues.

[pj737]

Originally Posted by Grassyknoll

And some airlines forward-buy their fuel and are locked in on pricing regardless of market price.

And hopefully the smart airlines are stocking up big time on fuel now. Not much downside risk on fuel pricing at this point... but plenty on the upside.

[lost_traveler1]

Originally Posted by bnbzub

Hello I work for SOUTHWEST Airlines and the rumor is we are going to start flying to Hawaii soon>
Anyway, I have heard people say that when a company has job openings in Hawaii, they have to hire locals, or a certain percentage of locals.
Thanks for any info.

This is true only for government contracts. If the government pays a company for services the company has to employ a high percentage of Hawaii residents.

[pj737]

From Star Advertiser today -

Hawaiian Airlines’ earnings more than tripled during the fourth quarter despite lower revenue as fuel prices plunged.

The parent of the state’s largest carrier, Hawaiian Holdings Inc., said today it earned $37.9 million, or 66 cents a share, compared with $11.1 million, or 17 cents a share, in the year-earlier period. Revenue dipped 0.1 percent to $574.2 million from $574.8 million.

Hawaiian, like other airlines that have reported so far this quarter, reported dramatic savings in fuel costs. The company said fuel costs — with hedging expenses factored in — were $60.2 million lower than the year-earlier period.

Fuel hedging, which is similar to buying insurance, reduces volatility by locking in a price to gain protection against future fuel-price spikes. Hawaiian’s fuel cost per gallon decreased 36.6 percent in the quarter to $1.80 from $2.84.