Air China Giving Up on Hawaii Flights Amid Tepid Demand
Air China will axe the only remaining nonstop flight between Beijing and Hawaii in several weeks, joining competitor Hawaiian Airlines in exiting the market.
The Star Alliance carrier will end flights between Beijing Capital (PEK) and Honolulu (HNL) on Aug. 27, citing “network layout, capacity arrangement and other reasons,” according to the airline's website. Currently, Air China flies the route thrice-weekly with Airbus A330 aircraft.
The news come amidst the backdrop of rising Sino-American tensions amid an intensifying trade dispute between the world's two largest economies.
On Monday, China let its currency slide against the US dollar, with the US responding by labelling it a “currency manipulator.”
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However, Air China’s decision to end flights to Hawaii does not appear to be directly connected. Since the airline launched Beijing-Honolulu flights in January 2014, load factors have averaged just 64.5%, US Department of Transportation data via Diio by Cirium shows. While load factors, or the percentage of seats filled in a given market, do not determine profitability, they can indicate an underperforming route if they are consistently low.
Hawaiian, which flew the Honolulu-Beijing route from April 2014 through Oct. 2018, saw average load factors of just 54.5%, the data shows.
For years leading up to Hawaiian's Beijing launch, executives at the Honolulu-based carrier had touted China as its next big growth market. But, when the carrier ended the service last year, Hawaiian's leadership said the market did not mature at "the speed we anticipated."
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Air China, as part of the network review it cites, may want to reallocate the limited number of frequencies it holds for US flights from Beijing to a more in-demand market. Honolulu had the lowest load factors among the seven destinations it served nonstop from the Chinese capital last year, the Diio data shows.
The airlines’s flights to Houston Bush Intercontinental (IAH), Los Angeles (LAX), New York JFK and San Francisco (SFO) from Beijing all had average load factors above 80% in 2018, according to the data. Even Washington Dulles (IAD), Air China's worst-performing US route after Honolulu, averaged a load factor 10 percentage points higher than the Hawaii service.
China Eastern Airlines will become the only airline flying between China and Hawaii by the end of the month. It offers six-weekly flights between Shanghai Pudong (PVG) and Honolulu with an A330-300.
“China will eventually be the dominant source of visitors to Hawaii,” former Hawaiian chief executive Mark Dunkerley told FlightGlobal in 2016. “Whether it will be in five or 50 years, I don’t know."