2011 investor day - planning and revenue management

Andrew WattersonVice-President – Planning and Revenue Management

1

Network And Pricing

Investor DayNovember 17, 2011

2

Agenda

• Network and Pricing Overview

• Geographies

– North America

– Neighbor Island

– International

3

Network Planning And Pricing Reflect Three Main Elements Of Hawaiian Airlines’ Strategy

• Our role as a destination carrier

• Diversification of origin markets

• Modest volume / price premium for superior product and service

4

Sydney

HNL

San Francisco

Los AngelesLas Vegas

HNL

Kaua‘i

Maui

Neighbor Island Routes

Pago PagoPapeete

Portland

PhoenixSan Diego

SacramentoOakland

San Jose

Maui

2008 Route Network Seattle

Manila

Kona Hilo

In Recent Years, We Have Expanded Our Network Significantly, Especially In International Markets

5


6

Sydney

HNL

San Francisco


Pago PagoPapeete

Portland

PhoenixSan Diego

SacramentoOakland

San Jose

Maui

2010 Route NetworkTokyo (Haneda)

Seattle

Manila

Route Development2010 Tokyo (Haneda)2010 Oakland - Maui2010 Las Vegas - Maui

HNL

Kaua‘i

Maui


Kona Hilo

2011 Route Network

Sydney

HNL

San Francisco


Pago PagoPapeete

Portland

PhoenixSan Diego

SacramentoOakland

San Jose

Maui

Tokyo (Haneda)

Seattle

Seoul

Osaka (Kansai)

Manila

Route Development2010 Tokyo (Haneda)2010 Oakland - Maui2010 Las Vegas - Maui2011 Osaka (Kansai)2011 Seoul (Incheon)

HNL

Kaua‘i

Maui


Kona Hilo


7


8

Manila

Seoul

Tokyo (Haneda)

Sydney

Osaka (Kansai)

Fukuoka

HNL

San Francisco


Pago PagoPapeete

Seattle

Portland

PhoenixSan Diego

SacramentoOakland

San Jose

Maui

2012 Route Network

Route Development2010 Tokyo (Haneda)2010 Oakland - Maui2010 Las Vegas - Maui2011 Osaka (Kansai)2011 Seoul (Incheon)2012 Sydney (daily)2012 Fukuoka2012 San Jose - Maui2012 New York

New York

HNL

Kaua‘i

Maui


Kona Hilo

8%27%

92%73%

0%

25%

50%

75%

100%

3Q08 3Q11

International Domestic

Hawaiian Now Derives A Substantial Portion Of Its Business From International Service

Hawaiian Airlines Passenger Revenue: Domestic vs. International

Source: HA data

9

0

1000

2000

3000

4000

5000

6000

7000

2006 2007 2008 2009 2010 2011

UA/COHADL/NWAAASUS/HPTZAQOther

Change In Avg. Seats / Day Over 5 Years, 2006-2011

Carrier%

changeAbs.

change

HA 21% 722

Other Airlines -19% -3,276

Domestic Capacity To Hawai‘i (Excluding Neighbor Island)Average Daily Seats

Aside From Hawaiian, Only Alaska Airlines And US Airways Have Increased Mainland-Hawai‘i Capacity

Source: Official Airline Guide (Data pulled from source on October 10, 2011)

10

International Capacity To Hawai‘iAverage Daily Seats

0

200

400

600

800

1000

1200

2006 2007 2008 2009 2010 2011

JO/JLDL/NWHAKEWSOtherNHACQF/JQUA/CO

1500

2500

International: Hawaiian Has Been The Leader In Service And Capacity Growth

Source: Official Airline Guide (Data pulled from source on October 10, 2011)

JO/JL not on same scale

Change In Avg. Seats/ Day Over 5 Years, 2006-2011

Carrier%

changeAbs.

change

HA 464% 746

Other Airlines -8% -515

11

1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011

Hawaiian Airlines ASM & PRASM(Year-Over-Year Change)

1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011

Hawaiian Has Maintained PRASM Growth Despite Capacity Growth

ASM

PRASM

Source: HA data

12

Agenda


• Geographies

– North America

– Neighbor Island

– International

13

North America Network And Pricing

• Widebody product advantage

• Schedule timed for local passengers

• Share and fare premium over competitors

• Connections to Neighbor Islands

• Connect largest, multi-frequency markets to International markets

14

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

In Most Mainland-Hawai‘i Markets Where We Compete, We Get Share And Price Premiums

Market Market O&DHA O&D

shareHA Fare

Premium1

HNL-LAX 934,810 31% $5 HNL-SFO 464,035 22% $17 HNL-LAS 374,502 81% $15 HNL-SEA 371,770 40% $13 OGG-SEA 262,273 51% $36 HNL-PDX 191,093 57% $22 OGG-PDX 187,377 63% $25 HNL-SAN 168,966 64% $24 HNL-PHX 145,646 63% ($42)OAK-OGG 117,102 50% $29 OGG-SAN 115,662 25% $44 HNL-SMF 104,438 82% $31 HNL-SJC 98,161 90% ($40)HNL-OAK 96,181 96% ($23)LAS-OGG 58,419 64% $22

Total 3,690,435 49% $14

Traffic, Seats & Fares At Hawaiian’s Mainland Gateways, YE2Q2011

O&

D S

hare

Nonstop Seat Share

HNL-SFO

LAX-HNL

OGG-SAN

HNL-SEA

HNL-PHX

OGG-SEAOAK-OGG

HNL-PDX

OGG-PDXHNL-SAN

LAS-OGG

HNL-SMF

HNL-LAS

HNL-SJC

HNL-OAKGreater passengershare than seat share

Less passengershare than seat share

1 Over other airline average fare

Source: USDOT O&D survey, OAG schedules15

12.7 12.712.1 11.9

12.5

10.8 10.6 10.910.4

13.5 13.1 12.711.7 11.4

10.6 10.3 109.2

United Airlines Delta Air Lines AmericanAirlines

US Airways Alaska Airlines JetBlueAirways

HawaiianAirlines

SouthwestAirlines

Allegiant Air *

RASM CASM

Domestic RASM & CASM (Excluding Transport-Related), YE1Q2011Stage Length-Adjusted To 1,000 Miles, Ranked By CASM

(No Hawai‘i Service)

Our Costs Are Competitive With All Other Carriers Serving Hawai‘i, And With LCC’s That Could Enter The Market



* No “Transport-Related” exclusion for Allegiant

Source: USDOT Form 4116

New York City

• Largest U.S. metro area

• 7th largest Mainland-Hawai‘i market

• Current service limited to just one daily EWR nonstop

• Excellent connections to the rest of the eastern U.S.

East Coast

• 2nd largest origin region

• Over 1,900 Hawai‘i PDEW (including NYC)

• Current service limited to just two daily nonstops (EWR and ATL)

We Recently Announced New Daily Nonstop Service Between

Honolulu And New York JFK

17

Agenda


• Geographies

– North America

– Neighbor Island

– International

18

Hawaiian Airlines’ Neighbor Island Markets Are Among The Busiest In The U.S.

Rank Market O&D PDEW* Rank Route Daily Departures1 JFK-LAX 3,265 1 LAX-SFO 472 LGA-ORD 2,589 2 LGA-ORD 423 LAX-SFO 2,491 3 LAS-LAX 374 JFK-SFO 2,315 4 JFK-LAX 335 ATL-LGA 2,044 5 BOS-LGA 326 FLL-LGA 1,910 6 ATL-LGA 307 HNL-OGG 1,816 7 ACK-HYA 298 LAS-SFO 1,608 8 LAX-PHX 299 MCO-PHL 1,593 9 HNL-OGG 29

10 EWR-MCO 1,517 10 PDX-SEA 2811 SAN-SFO 1,435 11 MSP-ORD 2712 HNL-LAX 1,430 12 DCA-LGA 2713 JFK-MCO 1,428 13 ATL-DFW 2714 DEN-PHX 1,395 14 LAX-SAN 2615 LAX-ORD 1,392 15 LAX-ORD 2616 LAX-SEA 1,388 16 BOS-DCA 2617 HNL-ITO 1,348 17 DFW-ORD 2518 DEN-LAX 1,345 18 ANC-ENA 2519 BOS-SFO 1,320 19 ATL-ORD 2420 LAS-LAX 1,312 20 ATL-MCO 2421 DEN-LAS 1,254 21 LAS-SFO 2422 SEA-SFO 1,235 …23 HNL-LIH 1,233 25 HNL-LIH 24… 30 HNL-KOA 2330 HNL-KOA 1,197 69 HNL-ITO 16

* PDEW = Passengers Per Day Each Way

Source: USDOT O&D survey and T100, OAG schedules19

0%

20%

40%

60%

80%

100%

HNL-OGG HNL-LIH HNL-KOA HNL-ITO KOA-OGG* LIH-OGG ITO-OGG HNL-MKK HNL-LNY

Hawaiian

Other

Island Air

Go! Mokulele

Hawaiian Airlines Has Established A Solid Presence In Its Neighbor Island Routes

0%20%40%60%80%

100%

HNL-OGG HNL-LIH HNL-KOA HNL-ITO KOA-OGG LIH-OGG ITO-OGG HNL-MKK HNL-LNY

Hawaiian

Other

Island Air

Go! Mokulele

OnboardPAX Share

(YE1Q2010)

Average Daily Freq. Share (Oct. 2011)

1,952k 1,450k 1,322k 1,138k 219k

29 24 23 16 18

* For KOA-OGG route, ‘Other’ refers to Pacific Wings

Source: USDOT T100, OAG schedules20

Our Neighbor Island Network Is A Source Of UtilityFor The Entire Industry

Virtually every airline serving Hawai‘i has significant interline traffic with us

Seven codeshare partnerships include several of our long haul competitors

21

VFR / In-StateLeisure

Origin Dest. Flight # Depart Arrive

Business Travelers

HNL OGG 206 5:05 5:41HNL OGG 106 5:17 5:53HNL OGG 114 6:34 7:10HNL OGG 156 7:33 8:10HNL OGG 116 7:59 8:36HNL OGG 146 8:32 9:09

OA Asia / Pacific Connections

HNL OGG 520 9:35 10:12HNL OGG 256 10:41 11:18HNL OGG 126 11:06 11:43HNL OGG 328 11:30 12:07

HA Connections

HNL OGG 166 12:40 13:18HNL OGG 336 13:23 14:02HNL OGG 136 14:07 14:46HNL OGG 226 14:45 15:24

OA (AA/UA/CO/DL) Domestic Long-haul

HNL OGG 334 15:24 16:01HNL OGG 544 16:23 17:00

Business Travelers

HNL OGG 236 17:14 17:51HNL OGG 266 17:38 18:15HNL OGG 194 18:15 18:52HNL OGG 556 19:37 20:14HNL OGG 596 20:16 20:53HNL OGG 516 21:55 22:32

Example: HA Honolulu-Maui Schedule – October 11, 2011

Each Neighbor Island Route Serves Multiple Customer Segments

22

• For most cities beyond narrowbody range, nonstop Neighbor Islands flights are difficult to support economically (for us and competitors)

• Our network provides an attractive connection option for these itineraries

OGG LIH KOA ITO

YVR YVR YVR

DFWORDLAX LAX LAX LAXSFO SFO SFO SFODEN DEN DENOAK OAK OAKPHX PHX PHXSEA SEA SEASJC SJC SJCPDXSANSMFSNA

-- -- -- --

-- -- JAL tried, cancelled --

Hawai‘i Visitors1 Non-Stop Service2

YYC

Our Neighbor Island Network Is An Anchor For Longer-haul Routes - Our Own And Other Carriers’

1 YEAug2011 2 All carriers

Source: Hawai‘i DEBDT, OAG schedules (Oct. 2011)

US West

US East

Japan

Canada

Other

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

in T

hous

ands

23

Agenda


• Geographies

– North America

– Neighbor Island

– International

24

While Some International Markets Have Matured, Other New And Existing International Markets Provide Attractive Growth Opportunities

• Widebody service

• Rising affluence will drive new sources of visitors

• Gradual loosening of visa requirements facilitates visits

• Weaker US Dollar makes Hawai‘i more affordable

• Our efficient twin-engine aircraft are well suited for these markets

25

* CAGR = Compound Annual Growth Rate

Source: Hawai‘i Tourism Authority

-3% 12% -1% 11% 2% 22% 8%CAGR*

‘06-’11(p)

1,174

466

374

178116 95 74

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

Japan Canada Other Australia Europe Korea China

in T

hous

ands

International Visitors To Hawai‘i, YE3Q2011

Hawai‘i Is An Established Destination For International Visitors, But Many Source Markets Are Far From Mature

1,174

26

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0

500

1,000

1,500

2,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(p)

Visitors Seats

Japan-Hawai‘i Visitors And Scheduled Seats

Annual Visitors(in Thousands)

Average Daily Seats

The Long-term Decline In Japan-Hawai‘i Demand Has Stabilized And Airline Capacity Is Tighter

Source: Hawai‘i DEDBT, OAG Schedules (Oct. 2011)

27

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

OtherNagoyaOsakaTokyo

Japan-Hawai‘i Average Daily Seats

Carriers Have Consolidated Hawai‘i Capacity At Tokyo, Leaving Regional Japan Cities Underserved

Note: Chart does not reflect launch of new HNL-FUK services (DL beginning Dec 28, 2011, HA in Apr. 2012)

Source: OAG schedules (data pulled October 2011)28

0.90

0.95

1.00

1.05

1.10

1.15

1.20

JPY CNY AUD CAD KRW

1.00

Currency Appreciation In Visitor Source Markets Provides Additional Support For Market Entry

Dollars Per Foreign Currency UnitsIndexed To 10/25/09 = 1.00

A weaker dollar boosts the value of foreign point-of-sale revenue and makes Hawai‘i a more attractive foreign tourist destination

29

Manila

Sydney

Hnl

San Francisco


Pago PagoPapeete

Portland

PhoenixSan Diego

SacramentoOakland

San Jose

Maui

Seoul (Incheon)

Tokyo (Haneda)

Osaka (Kansai)

Fukuoka

Pago PagoPapeete

Seattle

Oakland

San Jose

Taipei

Hong Kong

Singapore

Melbourne

Brisbane

Shanghai

Sapporo

Beijing

2010 Metro Population

1m 3m 5m 7m 20m

Major Markets With Limited Or No Nonstop Hawai‘i ServiceToronto

Montreal

Washington, DC

Boston

MinneapolisDetroit

Philadelphia

St Louis

Top US Markets With NoNon-stop Service

Auckland

New York

HNL

Large Markets With Limited Or No Nonstop Hawai‘i Service Provide Ample Growth Opportunities

Source: The Economist, US BEA, Board Of Trade Metropolitan Montreal, Govt Of Japan, Govt Of Australia, Calgary Economic Development

* Destinations Are Within Operating Range Of Existing HA Aircraft

30

Visa Restrictions Play An Important Role In Several High-Potential Hawai‘i International Markets

• Australia, Japan, Korea, New Zealand and Singapore are Hawai‘i’s only Asia Pacific source markets in the U.S. Visa Waiver Program (VWP)

• Korean visitors to Hawai‘i increased 60% after Korea’s VWP entry, and are projected to grow by more than 26% in 2011

• With low visa refusal rates, Hong Kong and Taiwan are on the State Department’s VWP “roadmap”

• China is unlikely gain VWP status in the near term, but declining visa rejection rates point to its eventual inclusion

– In the meantime, the U.S. is expanding visa processing capacity at its China consulates

U.S. VISA REFUSAL RATE

Country 2006 2010

China 24.5% 13.3%

Hong Kong 4.2% 5.4%

Taiwan 3.1% 2.2%

Indonesia 35.1% 16.4%

Malaysia 11.4% 5.9%

Philippines 37.7% 37.9%

Thailand 12.9% 13.5%

31

In International Markets, We Are Selective In Our Partnerships

• Mutual codeshare on both carriers’ HNL-ICN flights• Codeshare on HA neighbor island flights• Codeshare on KE ICN-Asia flights

• NH code on HA neighbor island flights• HA code on NH HNL-Japan and intra-Japan flights

• DJ code on HA HNL-SYD and neighbor island flights• Interline on DJ’s Australia/NZ flights beyond SYD

• Recently signed SPA* provides HA entry into several China markets from other Asia points

* SPA = Special Prorate Agreement

32

MahaloQuestions?

33

2011 investor day - planning and revenue management

Investor Relations