The Unique Hawaiian Interisland Market

Summary

Podcast Summary: The Air Show – The Unique Hawaiian Interisland Market (June 26, 2026)
Host: Brett Snyder – Cranky Flier LLC
Guest: Jon Ostrower – The Air Current

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Episode Overview

This episode centers on the distinctive Hawaiian interisland air travel market—its aviation history, the economic and cultural forces shaping it, and its uncertain future in the wake of the Alaska-Hawaiian merger. Brett Snyder and Jon Ostrower explore how geography, local culture, and fleet choices have combined to create an environment unlike any other for airlines, culminating in the current dilemma of replacing the aging 717 fleet.

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Key Discussion Points & Insights

1. Why Hawaii’s Interisland Market is Unique

• Geography Dictates Necessity: With no road or car connection between islands, air travel is not just an option, but essential infrastructure.
  • “There are still no cars driving between islands.” (A, 02:26)
• Public Transit Analogy: The market behaves more like a public bus service than typical air markets.
  • “It seems like we have a relatively inelastic market that seems to behave more like a public bus than anything else.” (A, 08:34)

2. A Brief History of Hawaii’s Airlines

• Origins: Interisland Airways (1929) later became Hawaiian Airlines, with Aloha Airlines (formerly Trans Pacific) joining in 1949, forming a duopoly lasting over 50 years.
• Competition Comes and Goes: Smaller players (Mid Pacific Air, Mahalo, Discovery, Island Air) periodically entered the market but failed to gain long-term traction.
• Exceptionally High Frequencies: By the mid-80s, some routes had dozens of daily flights—echoing an urban transit system out of necessity, not luxury.

3. Evolution of Demand and Market Shifts

• From Monopoly to Duopoly to Volatility: Market experienced overcapacity, then rationalization.
• Tourism’s Changing Impact: Segmented between inbound tourists and local essential travel. The flow of tourists, particularly from Japan, has shifted drastically alongside currency and economic pressures.
• Consumer Behaviors Change: The opening of Costco/Target (1993+) and online retail lessened reliance on Honolulu for shopping and services. (09:53)
  • “Shopping in Honolulu became less of a lifeline. We didn’t even talk about Amazon Prime... it really began to impact the market.” (B, 09:53)

4. The You-Go Era and the Effects of Outside Entrants

• Mesa’s ‘go!’ Debacle:
  • Mesa Air Group, after gaining internal data on local airlines during bankruptcy proceedings, abandoned acquisition plans and instead launched “go!” (lowercase g, exclamation point).
  • Drove fares so low it hastened Aloha’s demise (Avg. fare: $56 → $35) and was widely resented among locals.
  • “Mesa ended up gaining access to the internal financials for the airline... In the end, it decided not to buy anyone. But it took what it learned and then started its own airline called go.” (B, 12:58)
• Rise, Fall, and Local Sentiment:
  • Locals fly their own, outsiders rarely last.
  • Strong local identity remains foundational.

5. Recent Entrants & Market Dynamics

• Southwest Flies Interisland (2019-present):
  • Initially, low fares led to financial strain reminiscent of go!, but Southwest, being diversified, could absorb the impact.
  • Southwest failed to achieve frequencies necessary to serve as a true local substitute (peaked at 11 dailies, then reduced to 8).
  • Fares: $71 (2018) → $47 (2019) after Southwest entry. (B, 18:42)
• Alaska’s Acquisition of Hawaiian:
  • Alaska’s public messaging emphasizes respect for local culture and maintenance of the Hawaiian brand.
  • Still, both main interisland operators are now “outsiders.”

6. Fleet Dilemma – The 717’s Unique Role

Why the 717?

• Optimized for Short, High-Cycle Ops:
  • Rear engines, lighter airframe, built for up to 1,800nm but excels at short stage lengths (37–45 min).
  • Robust, “tank-like” design; legacy of DC-9 lineage.
  • “These airplanes...are perfect for the inner island market. They have 128 seats in a pretty dense configuration, built like tanks, have engines that are well suited to high cycles and quick turns.” (B, 22:14)
• Aging Out: No longer in production, maintenance and parts support will become a major issue.

The 737-800 Plan

• Alaska to Dedicate Mainline Jets:
  • Shane Tackett (Alaska’s new president) told Jon Ostrower that the 737-800 will be a dedicated interisland fleet, uniquely repainted in Hawaiian livery, and operated almost exclusively in short-haul, high-cycle inner island flying.
  • “Alaska really sees these as a dedicated fleet. You know, Shane used the word ‘dedicated’ here for Inter island operations.” (A, 26:30)
• Operational & Technical Questions:
  • 737-800 weighs ~20,000 lbs more than a 717, is designed for long-haul, not repetitive short hops.
  • Concerns around maintenance—corrosion, cycle fatigue, engine wear—are significant despite robust CFM56-7 engines.
  • Southwest’s unique rotation of 737s (between short-haul and long-haul) manages cycle buildup; Alaska/Hawaiian may not do the same, opting to run the jets exclusively short-haul.
  • “The 737800 can do short haul high cycle for sure, but it’s not really been designed that way for the last two generations... The 717 is about 20,000 pounds lighter.” (A, 27:37)

Replacement Alternatives?

• No Perfect Modern Solution:
  • Embraer E195-E2 and Airbus A220-100 offer right size but carry next-gen geared turbofan engines unsuited (from a durability perspective) to high-cycle, short-haul ops.
  • “If you’ve got an exquisite next generation engine that burns 20% less fuel, you want to save those cycles for much longer stages. These are not inter island engines.” (A, 34:21)

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Notable Quotes & Memorable Moments

• On Inelastic Demand:
  “It seems like we have a relatively inelastic market that seems to behave more like a public bus than anything else.” (A, 08:34)
• Mesa ‘Go!’ Story:
  “Mesa ended up gaining access to the internal financials... In the end, it decided not to buy anyone. But it took what it learned and then started its own airline called go. And by the way, that’s GO in the most obnoxious way possible with a lowercase g and an exclamation point.” (B, 12:58)
• On Local Identity in Airlines:
  “The people of Hawaii are fiercely independent in many, many ways... They love their local companies and... when outsiders come in, it generally isn’t taken well.” (B, 14:14)
• On Future Fleet:
  “Alaska really sees these as a dedicated fleet... They’re probably going to beat the heck out of these airplanes on exclusive Inter island flying... It’s probably the most cost effective plan.” (A, 26:30)
• On Lack of Aircraft Innovation for Short-Haul Ops:
  “This is a very unique market in so many ways and it’s so unique that nobody cares to make the right airplane to serve it anymore.” (B, 34:30)
• On Engine Suitability:
  “There are new 120 seat airplanes... Both have PW1000G series engines... but those have been very fragile as we’ve well documented... That fundamentally takes an engine off the wing far sooner than expected.” (A, 32:22)

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Timestamps for Important Segments

• [01:54] Origins & Historical Context
• [05:37] 1980s Route Frequencies – Peak Interisland Flying
• [09:53] Changing Local Needs: Retail Arrives on Neighbor Islands
• [12:34] Mesa Air / ‘go!’ Enters—with Disruptive Impact
• [15:40] Island Air’s Decline and Hawaiian’s Monopoly
• [17:30] Southwest’s Interisland Entry and Fare War
• [22:38] 717 Fleet and Replacement Dilemma
• [26:30] Alaska’s Dedicated 737-800 Plan for Interisland Service
• [32:22] Why Modern Jets/Engines Aren’t the Solution
• [34:30] Big Picture Summary: Market’s Unique Needs and Uncertain Future

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Conclusion: The Future of Hawaiian Interisland Flying

Hawaii’s interisland air travel market is shaped by compulsory air service, fierce local identity, and the quirks of aircraft economics. As Brett and Jon emphasize, there is no ideal aircraft for this purpose anymore—big jets are overbuilt for the task, regional jets don’t have robust enough engines, and the niche is too small for bespoke designs. The pending transition from the beloved (but aging) 717 to heavier 737-800s will define the next chapter, whether or not it’s the best fit for locals.

“There’s not a great answer to what the next phase of inner island flying looks like... someone’s got to design an airplane that can fly short ranges. Again. In an engine, really.”
(A/B, 35:27–35:34)

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For aviation enthusiasts or analysts, this episode is a must-listen for understanding the technical, cultural, and strategic complexity of one of the world’s most distinctive air travel markets.

Transcript

[A]

I'm John Ostrower, editor in chief of the Air Current.

[B]

And I'm Brad Snyder, author of Cranky Flyer. You're listening to the Air show, the podcast where we talk about what happens in the business of the sky. Brian is out today. So John, let's talk about paradise.

[A]

Okay. Isn't that like a TV show or something?

[B]

Yeah, it's pretty good. I don't know. I'm not into it the way I was in the first season, but I am not getting into digressions this week. We have a lot to talk about and what I mean is Hawaii.

[A]

Okay, let's do it. Let's go. What do you want to talk about?

[B]

Well, you mentioned it here on the last episode of the Air show and you wrote it up in more detail on the Air current that Alaska's newly crowned president Shane Tackett said the Boeing 737800 is the likely replacement for the 717 on Inner Island Flying.

[A]

Yes, I did. And that actually came out of a wide ranging conversation I had with him at the IATA AGM in Rio. At first glance I thought it might be hard to fill an entire episode based on Inner Island Ops. But the more I thought about it it I realized how hard it's going to be to keep this episode to just 30 minutes. This is a market and an airplane, specifically the 717 that we are both equally fascinated by for lots of different reasons. Like these are short and incredibly scenic flights in a beautiful part of the world that have historically been flown by everything from small Cessnas all the way to wide bodies. It is a cool market.

[B]

Yeah, but even if it wasn't, I think you'd be surprised how easily I can fill half an hour. But anyway, yes, your story sent me down a rabbit hole and I've already written a couple of posts on Cranky Flyer this week talking about different aspects of the market. And then I started digging further and further into the market in general, going back in time. Point is today let's talk about why that market is so unique and what that means for Hawaiians. Fleet Choice I love when we have

[A]

a wind up like this. Bring on the history lesson.

[B]

The year was 1929, less than a month after the stock market crash. To kick off the Great Depression, Little Inner Island Airways sent a Sikorsky S38 from Honolulu to Hilo with stops along the way. This was the first Inner island flight and it was revolutionary because there were no cars driving between islands and boat travel was slow and challenging with high seas and storms being A somewhat regular occurrence that the airplane changed everything.

[A]

Well, number one, a hundred years later, there are still no cars driving between islands.

[B]

This is true. This is true.

[A]

Yeah, yeah, that's a, that's an infrastructure project waiting to happen. But in all seriousness, this is definitely why inner island travel is so different from anywhere else. Like there are parts of the world where geography just will not let you do things. And an airplane is essential. Cars and buses are not an option here. Aviation is essential infrastructure for Hawaii. But can we fast forward a little bit maybe?

[B]

Yeah. Okay. All right. So in 1930. Just. Just kidding. Just kidding. So Inter Island Airways became Hawaiian Airlines. And up through World War II, this is the only way to fly between the islands. Then in 1949, competitor Trans Pacific Airlines took to the skies as well. From then and for more than 50 years, Hawaiian and Aloha, which, that's what Trans Pacific became in 1958, lived in a duopoly market to serve as the state's lifeline connecting all the islands.

[A]

But like there were other competitors, right?

[B]

Yeah, there were, but they were generally small and they never had staying power, no matter what. I remember flying a Japanese built NAMC YS11 in the 1980s on mid Pacific Air. So that's a moment in time that

[A]

is, by the way, that on your like if fluid bingo card. That is an excellent, excellent one.

[B]

Yeah, that's not. That is a tough one to. To get. But Mid Pacific Air didn't last. It was just a few years. And there have been others. Mahalo, I think Discovery, maybe. I don't remember all of them, but the reality is that from about 1970 through the end of the century, Aloha flew 737s, Hawaiian flew DC9s, connected all the big islands to each other and, and they provide each other with generally respectful and stable competition in the market.

[A]

Yeah, absolute mainstays on those routes. These are excellent aircraft for those short hop, high cycle operations. I would just say the older versions of the 737 and the DC9 are excellent for this.

[B]

This was sort of this status quo continuing this duopoly, but the markets themselves actually shifted a fair bit during this time. And from now and through the end of the episode, I'm just going to use the busiest inner island market to make my points and that is Honolulu Kahului on Maui. So this isn't just the biggest Inter island market, but it's one of the biggest globally. If you look at 2000 OND data for the full year in Cerium, Honolulu to Kahului was the largest market in the US local market with more than 3200 people flying each way every day. Number two is Vegas to LA at over 2600. So it wasn't even close.

[A]

That's amazing.

[B]

So what I did, I went in to use the app from our newest sponsor, skygo, which has OAG schedules going back to 1980. In 1980, Hawaiian had a little over 20 daily departures on the DC9. Aloha had a little over 16 on the 737, 200. There were a couple other little stragglers with Cessnas doing a couple of flights, but not much.

[A]

That seems like a lot of flights though. That's a heavy rotation.

[B]

You might think so, but then I looked at 1985. Oh my. So Hawaiian and Aloha were up to about 39 and 36 flights daily, respectively. On top of that, this is when Mid Pacific was in the market had more than 40 daily on the smaller airplanes. And there were still a handful of little guys for some reason that thought it was a good idea to fly it.

[A]

But yeah, that's extraordinary. That's an unbelievable number of flights.

[B]

It is. But the market couldn't sustain that. That was just competitive pressure, right? Like, yes, you need to fly frequently. There are no cars. You have to operate at multiple flights per hour. It's almost like a city transit style system. But this was way too much capacity. This was nuts. So, you know, eventually it thinned out again when Mid Pacific Air went away. But there were still a lot of flights in this market.

[A]

But like, this wasn't just about the local market. Right? Like there were like football teams and needed to get to other islands to play a game where people had to fly to the big city and Honolulu for shopping and doctor's appointments. But there's a significant amount of tourism. So this is really just also about funneling people through Honolulu to the other islands.

[B]

Well, it was both, yes. But that is a huge part of the market because back then, almost all the flights to the islands from the mainland went to Honolulu. United did fly daily to Kona from both San Francisco and la, but nobody else flew to the mainland from there. Same with United Sub daily La Lihue flight. Kahului had more. There were several airlines that were flying in there, but that was nothing compared to the number of people who visited and used Honolulu as their gateway to get to the neighbor islands, as they call them. So also, I think that vacation structure was a little different. I think island hopping was more common back then. You know, inner island flights would Serve that market for the tourists who were visiting multiple islands.

[A]

I wonder to. To what extent the inbound tourism fuels the inter island. Like the Japan franchise has really fallen off given exchange rates and.

[B]

And all that.

[A]

But, you know, it's. It's really kind of curious how. How much those are. Are directly connected from a capacity perspective.

[B]

Yeah. And I'm internationally. Everything still goes through Honolulu. There is one other airport with a customs facility that's Kona and briefly that had a flight to Tokyo. I don't think anyone's operating it anymore. But yeah, when you talk about the international inbound, then it still is all funneling through Honolulu. And inner island is still a very important piece of the pie. Yeah, but, but, yeah, but it has shifted and it continues to shift. And demand has shifted, as you talked about in Japan, where, you know, there's been a lot of headwinds in the inbound market from there. So while the market looks somewhat stable on the surface, it's not actually. It's like the duck furiously paddling below the surface, I think.

[A]

Yeah. And it seems like we have a relatively inelastic market that seems to behave more like a public bus than anything else.

[B]

I think that's right. That's sort of that bread and butter of that market. And you had to have that. But these structural changes that occurred, they still had a real impact on this. You know, in 1990, Delta and American were each flying Honolulu to Kahului twice a day. United it once a day. This was to carry their own passengers. So they had shifted away.

[A]

That was the wide body.

[B]

That was the wide body stuff. Yeah, absolutely. And then, you know, once we got to the 90s, that's when the 757 sort of exploded into the market, Created all those neighbor islands direct to mainland opportunities.

[A]

But what about the locals? I. I feel like this is really kind of connected to how commerce happens in the state.

[B]

Yeah, sure. Because, you know, you talked about a football team going to Honolulu or from Honolulu to another place. That still happens. Of course, that's different. But people used to go to Honolulu for shopping, for doctor appointments, for all these things. That was just like taking a bus. You had to go over there to do the things you need to do because the neighbor islands just didn't have the infrastructure. But that started to change. 93, the first Costco opened on the big island.

[A]

I mean, you gotta fly for your samples, man.

[B]

That's right.

[A]

Yeah.

[B]

You know, Target is now on all the big islands. Shopping in Honolulu became less of a lifeline. Let we didn't even talk about Amazon Prime. So, you know, all these things. When they started in the 90s, it really began to impact the market, you know, so that market has dropped significantly. Last year it was the ninth largest in the US with a little over 2100 daily each way. So significantly lower. And capacity has dropped. But frequency is still so important for the local market. Then airlines couldn't really cut and then up gauge as you might have thought they would otherwise do.

[A]

I. I would actually love to read a thousand words on the effect of Costco, Target and Amazon on the US Air travel. I mean, Alaska milk runs were a lot of, like, people going down to the lower 48 for Costco and bringing and bringing back pallets of stuff. I mean, that's why there were combies on those routes where you could have cargo and seats in the same cabin. It's. No, it's very, very interesting. Now we get to 911 and things get worse. I know that really, absolutely hurt Hawaiian and Aloha hard, with both of them filing for bankruptcy protection in. In 2003 and 2004, respectively. But this wasn't just about the impacts of 9 11. Right. We saw this decline in the inner island market, but there was also the decline in Japanese tourism at the time, thanks to economic issues going on in Asia. Fuel spike too. So it's, you know, it's a world of hurt in those years.

[B]

Yeah, exactly. And both of these companies were really vulnerable to it. But in 2004, Hawaiian still flew about 18 times a day. Aloha was at 17 in the Honolulu Kahului market, because again, frequency is just sort of a requirement for being there. Now, we talked about how traffic in the local market has dropped from in 2000, when it was over 3200 to just being over 2100 in 2025. But what I didn't talk about is how quickly that drop happened. It actually was under 2100 by 2005, 20 years earlier, and it never really recovered. In fact, this 2025 number is actually the highest number since 2007. So it is a change market. And that's just the local market. If we look at T100 data and look at onboards overall, including connections, there were more than 5,400 people going each day each way in 1995. By 2005, it had dropped to under 3,200. So an enormous change in just a short decade.

[A]

And I assume this is the point at which we start talking about why Aloha doesn't exist anymore, right?

[B]

Yes, this Is this is where the story takes a dark turn. So both Aloha and Hawaiian were in bad shape, and sharks started to circle and look at opportunities in bankruptcy. And one of those sharks was Mesa Air Group, which decided to throw its hat into the ring. It said it was an interested buyer.

[A]

Is that actually true? Is that actually up for debate? How does history square this one?

[B]

It is up for debate, but, yeah, I mean, if you ask anyone in the islands, they'll say that this was a ploy and there have been many a lawsuit. But what happened was Mesa ended up gaining access to the internal financials for the airline so that Mesa could do its due diligence. Right. If it's going to buy these companies. In the end, it decided not to buy anyone. But it took what it learned and then started its own airline called go. And by the way, that's GO in the most obnoxious way possible with a lowercase g and an exclamation point at the end.

[A]

Oh, my goodness.

[B]

I know. So this airline came into the market in 2006 with some old CRJs and tanked fairs. But in Q4 2005, before they were in there, the average fare on Honolulu Kahului was $56. But by Q4 2006, it was $35. This ended up being the death knell for Aloha. It filed for bankruptcy protection again in March 2008, and then it shut down a few days after that. Actually, yeah, this.

[A]

This was super messy. And. And then GO tried to buy the Aloha name and there was a justified uproar. Lawsuits flew back and forth, and MESA lost at least some of those lawsuits. After that, GO never became a solid business and was gone by 2014.

[B]

Yeah, which is amazing it even lasted that long. But I guess with a low hug on, they kept thinking there was something that would work. But. But locally, in the islands, MESA became a four let in, you know, more ways than the obvious one. But people still flew the airline because it was dirt cheap. It was a very odd time in. In that world because the people of Hawaii are fiercely independent in many, many ways. And we can go back to the U.S. overthrowing the government, you know, more than 100 years ago to understand why they are justified in being wary about trusting outsiders. But I don't think we have time for that. So just suffice it to say that they love their local companies and. And yes, they'll complain all they can about fairs and service, but it's their companies, and they do it with love. And when Outsiders come in. It generally isn't taken well.

[A]

Well, I mean, there's probably a. A case study there for why the Hawaiian brand still exists. Coming out of the Alaska merger, after Aloha and Go were gone, Hawaiian had the monopoly. And of course, unless you count those Island Air turboprops.

[B]

Yeah. Which I don't. Yes. Islander tried. Peaked in 2015. It still had fewer than 10 daily on Honolulu Kahului while Hawaiian was running 25. So the island Air didn't last that long in this version of it. It did a million different things over the years, but it failed for good in 2017. Very clear. Hawaiian was in charge.

[A]

And that brings us to the state of affairs as it stands today. Southwest arrived in the market in 2019, and there is once again a duopoly. But we have a market that is now owned by two outsiders, despite there actually being a, as we just mentioned, a real wariness of outsiders in this market. And there's a fleet decision that has to be made. Let's get into that after the break. Hey, Brett, I don't think I've ever seen a smile that big on your face before. You okay over there?

[B]

Of course I'm okay. I'm just busy playing with skygo, my favorite new way to explore airline history and aviation data, including OAG schedules, Form 41, and soon OND data.

[A]

This all makes sense now. So basically, aviation data analysis in your pocket.

[B]

Exactly. Skygo lets me stay in the moment anytime I get curious. And there is so much data. For example, scheduled data goes all the way back to 1980. So there is a treasure trove of history to uncover.

[A]

How are you sifting through that data so quickly?

[B]

I've been asking the built in AI agent. It gives you answers right away without having to download the data and then manipulate it in Excel.

[A]

Well, this is fun. So which airline had the Most flights on 707s in 1982?

[B]

This seems like something you already know the answer to, but. But Skygo says there were 38,715 flights on TWA that year.

[A]

And this is all in an app.

[B]

Sure is. And you'll be amazed at the number of charts, graphs, and more that are built in as well.

[A]

So you can get answers very quickly. And over the coming weeks, we'll give more tips to people on what Sky Go can actually do for you.

[B]

That's right. Whether you're an aviation professional, an airline geek, or just endlessly curious about how air travel has evolved, SkyGo helps you get answers faster. Follow SkyGo on LinkedIn by visiting theairshowpodcast.com SkyGo for updates, behind the scenes previews, and beta opportunities.

[A]

And we're back. So, as I mentioned before the break, Southwest entered the interisland market in 2019, and it's still there today. But. But it has not been a smooth go. No pun intended. Okay, can you talk about what's been going on there, Brett? I think this is instructive for where things are right now.

[B]

By the way, when you say smooth go, you have to say it with an exclamation. It's a smooth go. Yeah, but. Yeah. So Southwest really wanted to come into the islands from the mainland, but, you know, needed a gate space in Honolulu, which was at a premium at the time. It knew it had to get in good with the locals. So it went into the market in a big way and decided to run Inner island, which was welcomed by the authorities just because it's always good to have competition instead of just one airline. Now, like I said, Southwest knew it couldn't just come in as a traditional outsider. After all, the man who was in charge of the commercial side of the business, Andrew Waterson, used to work for Hawaiian, so he understood the market dynamics. They put a lot of legwork into trying to gain acceptance in the community. Bags Fly for you is a nice perk since Hawaiian had started charging for bags.

[A]

Whatever happened with Bags Fly Free did that?

[B]

Yeah, I don't know. I feel like I haven't heard anything in a while. Anyway, when Southwest came into the market then, you know, it followed go's lead in the fare department and made them so, so low. By Q3, 2018, right before Southwest came in, the average fare in Honolulu Kahului was $71. And in Q3 2019, it was back down to $47. Just brutal. But unlike with Go, exclamation point, this was a tiny part of Southwest network, so it could weather a storm in a way that GO never could.

[A]

But this was, like, really bad news for Hawaiian. Like, this is a market that has shown it can support two airlines, but, like, the pricing gets all whacked out.

[B]

Yeah, yeah. And it showed it could support two airlines often, but not always. And that's. That's why we saw Hawaiian and Aloha finding themselves in trouble at each downturn. But in general, there is room for two. Southwest, when it came in, it did come with fewer flights. It peaked at 11 daily in Honolulu Kahului. And that really just wasn't enough for the local market. But it didn't do very well. And Last summer, Southwest pulled back on its entire operation to try and get things into shape. Dropped to 8 daily on peak days in that market and, you know, work to improve performance. And then the average fare finally started to rise again.

[A]

So if we sort of settled back into a stable duopoly here, not in

[B]

the same way that it used to be. I mean, we used to have two airlines that were competing with similar schedules for that local traveler, especially the business traveler. I just don't think there's enough demand for that anymore. And that's what we've seen is that Hawaiian is the one true survivor. And Southwest is running a lower schedule, which does provide competition, especially for the price sensitive. But it's not really an equal competition in a duopoly the way that it used to be. And I don't think that's ever going to happen again. But now Alaska's bought Hawaiian, so we have two outsiders. And Alaska has bent over backwards to make sure that the locals, the Kamaina as they call them, realize that this is still their airline. They've talked about their shared history on real or virtual islands, as the case may be in Alaska, separated from the mainland. They've really leaned on the investments they started to make in the market when they first entered the islands as Alaska, even before this. And they've committed to keeping the Hawaiian name and branding and all that.

[A]

Okay, so with Alaska in charge, what's actually happened to capacity? How has this unfolded since the merger?

[B]

Yeah, so southwest still at 8 daily as they were last summer. Hawaiian is at 19 daily on Honolulu Kahului. So it's still, you know, pretty high for Hawaiian. But the airline has trimmed a handful of frequencies. It has come down a little bit. Still, Hawaiian remains that public transit option which the islands need. And now it's up to Hawaiian to figure out how to continue to serve this market in the best way.

[A]

Okay, this is where we get into talking about airplanes.

[B]

Yes, and I know you've been foaming at the mouth waiting for this part.

[A]

Always, always, always, always.

[B]

So I mentioned earlier, Hawaiian had been flying the DC9 for decades and it is still flying them. Okay, technically they're 71 7s, but you know, same thing. Originally the MD95.

[A]

Yeah. Amended type certificates after amended type certificates.

[B]

Yeah, exactly. But these airplanes, as you know. Well, John, are perfect for the inner island market. They have 128 seats in a pretty dense configuration, built like tanks, have engines that are well suited to high cycles and quick turns. But this airplane hasn't been made in 20 years. The end of life is coming. And so with that set up, John, tell us about your conversation with incoming president Shane Tackett.

[A]

Okay, so full disclosure, I've been hearing through the Alaska pilot rumor mill for a little bit that 737s were on tap for the 717 replacement. So I was really keen to pull on that thread with Shane. It's something that I've always been really interested in. And actually when I had an interview with Nat Pieper when he was at Alaska, like the day after Alaska announced it was acquiring Hawaiian, like this was on the list of questions I asked, what happens to the 71 7s? How do you switch this up? And actually we had an interview with Peter Ingram at IATA from I think 2023 where he actually detailed kind of what the thinking around the 717 replacement was. And they were actually getting close to that at the time. Time, obviously that didn't happen because of the merger, but I wanted to revisit this with Shane. So I asked him about what Alaska learned about Southwest's experience in the market and how that informed what comes next. Admittedly, he pivoted to talking about how the essential nature of the service was for Hawaiians and how the company is committed to fly those routes, quote, forever. And by the way, that's the first time I can ever remember an airline executive using the word forever. In a forward looking context, I think

[B]

forever, that means like six years.

[A]

Yeah. But I pivoted the question a little and specifically asking about how things may unfold from a flying perspective. Southwest 737 going inter island versus the 717 and really the future there. And as we've noted, he said the 737800 was, quote, the most likely answer for the future of Inter island operations. But the 717 for Hawaiian as a legacy DC9 and MD80 customer was really perfect for the airline. Like this is an airplane that was designed for short flights. We're talking like optimized for up to 1800 nautical miles. But that ultimately means that the bulk of the operations are going to be really, really quick. This is not an aircraft or its attributes that we've had in aircraft production in a generation of aircraft design. When Hawaiian took these airplanes from Boeing from Long beach, the airline rolled them across the street to a nearby FBO and Boeing actually with Hawaiian, pulled out the seats from the cabin and put them in the cargo hold or stacked them on other rows of seats. And in their place were four 250 gallon fuel tanks fed directly to the center wing. Tank that allowed Hawaii to actually get the 71 7s home to Honolulu. Just to give you a sense of how these engines have gotten more efficient over the years. When a Hawaiian did it with the DC951s there were 10 tanks. And by the way, if you're asking how I pulled this random knowledge from, from my memory. Yes. I actually have old Airways magazines that wrote about this at the time in my archive from 1999 and 2000. That has still been a fantastic resource all these years later. So never get rid of your aviation magazines kids. They will serve you forever. But like also one of the things that really has always struck me about this market that's incredibly fascinating is that airlines some learned really the hard way that there's a balance to be struck, particularly with 737s between high cycle Inter island flying and transit back to the mainland. Effectively you could balance the accumulation of cycles that consume the life of an airframe and the engines with the required heavy utilization that you want for an asset. You know, a few shorter stages interspersed with a long one to ease the wear and tear.

[B]

Yeah, which is exactly what Southwest does. And I wrote on Cranky Flyer this week if people want to see it, I have a visual up there showing kind of how they rotate airplanes a little bit. But that may not be what Hawaiian Alaska is thinking here. Right. If you were a betting man, would you think that this will be dedicated fleet or will it rotate into the mainland market?

[A]

Well, no, no. Actually what's really interesting here is that Alaska really sees these as a dedicated fleet. You know, Shane used the word quote dedicated here for Inter island operations. They're going to be rebranded in Hawaiians colors for these operations and they're probably going to beat the heck out of these airplanes on exclusive Inter island flying. Look net net. It's probably the most cost effective plan if you've got an owned fleet to use as a consumable over time.

[B]

Okay, all right. I. This is news to me. I guess I did not read the piece closely enough. I heard them say it would be Painted Hawaiian and Honolulu based, but I didn't know that they said it'd be dedicated inner island. Sorry, I need to read more closely I guess. But if that is the case, they are going to beat the heck out of these airplanes. I. I'm just, I'm curious here because Aloha very publicly learned about corrosion when Flight 243 became a convertible in 1988 mid flight. I know those cold bonding techniques are no longer used. This is a Different airplane. But are there concerns about this airplane if it were dedicated to the inter island market with those high cycles?

[A]

I would really love to understand the maintenance play here because the 737800 can do short haul high cycle for short, but it's not really been designed that way for the last two generations. And coming back to Southwest, they are the global fleet leader here and they've consistently been the airline that has surfaced issues with the 737 before anyone else. That's just math. You're going to learn a lot ahead of everyone else just by the sheer numbers of how much you're flying. It's the downside of having the biggest fleet in the world. Look, we've seen this before. The engine inlet failure, the pop top fuselage structure issues they had on the classics. Even more recently, the Leap one B bird strike issues that surface the cabin smoke, problems with the engine. These are all a function of like effectively having the biggest chin that you're leading with. You're going to get hit first. But look, my point here is that the 737 has gone from 120 seat airplane to an airplane that can do a mission with 230 seats. The max 10 where the overall requirements have changed. Like this is an airplane that needs to fly farther, carrying a heavier engine and the associated structure that goes with that and the additional thrust. It's designed for transcontinental operations, not inter Island. And I'm really curious how Alaska's maintenance program for the 800 is going to have to change to reflect the rapid accumulation of cycles for for this fleet. But like there's also some really basic physics at here. The 717 is about 20,000 pounds lighter than the 737. 800 in rough number is about 70,000 pounds versus 90, 91,000 pounds. So every takeoff and landing that happens on a 737800 on interisland is weight that needs to be lifted every single time. That means a bigger wing, a longer and wider fuselage for those added passengers and higher thrust engine in the CFM56 7B which is a fantastic engine, probably the best engine ever designed. But the 737800 is designed to fly comfortably to Seattle from Honolulu. The 717 is not.

[B]

Talk to me more about these engines because I know we've all heard this. The newer the engine, the worse it is for these short flights, higher cycles. But the 800s, those are somewhat better than the Max. And the leaps, right? Still not great, but better. Can you, can you Talk about that and Compare to the 717.

[A]

Yeah. Okay, so this fundamentally is an engine play for Alaska and that. And that's how they're using these going forward, or at least notionally using these going forward in Hawaii as Alaska takes delivery of something like 200 plus max eights, nines and tens over the next 10 years, there's going to be 737, 800 airplanes available for other missions, especially as a lot of those airplanes are going to be used for replacement and the majority for growth. Alaska earlier in June actually just finished up a complete interior retrofit and refurbishment program on the 800s. And so that added an extra row of first, now four, a total of 30 premium class seats in economy, USB C charging device holders, et cetera, et cetera. But there are 161 seats on each airplane versus 128 for the 717. By the way, there's probably a separate question around turn times, but we'll save that for later.

[B]

You know, it's funny that you mentioned that because all those things you talk about, the Alaska retrofit, none of those matter for the inner island market. These are all very short segments. And so by the time they make it to Inter Island, I imagine this airplane will look different on the inside. But we'll see, or we just saw

[A]

the last reconfiguration of these airplanes during their life. I think it can go either way back to the engines. As airframes exit over time, Alaska is going to hold on to those precious CFM56 7 engines. They are going to have lots of spares to feed this fleet and they're going to need it. Seven to ten cycles a day on each airplane on short haul is going to chew through these engines. Granted, a very robust engine that can stay on the on wing for a very, very long time. That's been documented in service going Back to the 717, the BMW Rolls Royce BR715. By the way, the 7BR725 is what powers the Gulfstream G650ER, so we can just. Same family, but very, very, very different missions. But it's been a star performer on the 717 which by the way, which like all the DC9 series aircraft is built like a brick house. There's just something about those rear mounted engines that flows through the entire design that lets it go on forever.

[B]

So that's what we're talking about here. But there is this new generation, the leaps and the geared turbofans and all that. You know, beyond this, the 715S and the CFM56. But that's not. Those aren't the winners here.

[A]

No. And look, There are new 120 seat airplanes on the market. E195, E2s in two class and a 221 hundreds. Both of those have PW1000 G series engines, geared turbofan from Pratt. But those have been very fragile as we've well documented on this show. The issue here is durability, not quality, which the powder metal issues are separate. But that durability which Pratt has tried to field upgrades for, and by the way CFM has for the Leap family as well, is really designed to make sure the hot section doesn't wear out as rapidly where it otherwise has in these early years of operation. That fundamentally takes an engine off the wing far sooner than expected. And it coming off sooner means an airplane that's not available for service. And yes, a very expensive overhaul. But look, this is really interesting. My colleague at the Air Current, Howard Slutskin, was actually in Mirabel this week for an A220 event with Airbus and he asked them about interisland operations. His characterization to me was that it seemed like it wasn't even a market they had thought about for the A220, you know, but they kind of noted that Korean Air was using their A223 hundreds with a 45 minute turn time. So yes, I went into the data and Indio found that the shortest Korean A220 flight is blocked at 55 minutes with a weighted average flight time across the entire schedule of 70 minutes. By the way, Hawaiian shortest flight is 37 minutes block time. The actual time in the air is far less, but there was a network wide average for Hawaiian of just 45 minutes. I would say, let's put it this way, if you've got an exquisite next generation engine that burns 20% less fuel, you want to save those cycles for much longer stages. These are not inter island engines.

[B]

All right, we got to wrap this up, John. Everyone's going to start turning us off

[A]

here or they're going to start want to go to Hawaii to try out a 717 before it gets retired. I know that's what I'm going to do.

[B]

Who doesn't want to do that? That is the right answer. I actually have one scheduled this summer. But so let, let's sum things up here. This is a very unique market in so many ways and it's so unique that nobody cares to make the right airplane to serve it anymore. I think that's just the reality of the situation. So. But the market itself, we have people traveling in different patterns than anywhere on the mainland. It's also a shifting market with, you know, prime and target and all that we talked about. And Hawaiian Slash Alaska has to figure out how to navigate this. The obvious idea is to fly these older, bigger 737s, but doesn't necessarily work well for the Kamaina if you also reduce frequency. And that's really, I think, the hard part about figuring out how to handle this market. There's not a great answer to what the next phase of inner island flying looks like. Hawaiian will just need to make the best decision it can and hope it's the right one.

[A]

And someone's got to design an airplane that can fly short ranges. Again.

[B]

I'm in. In an engine.

[A]

In an engine, actually. An engine, really?

[B]

That's. That's the key. Yeah, that's the issue.

[A]

You've been listening to the Air Show. If you have suggestions or questions for us or interested in sponsoring the podcast, email us at info at the airshow podcast.com or visit theairshowpodcast.com to get in touch.

[B]

Leo Duran produced and edited this episode. Our theme music is by Joshua Moser. Thanks for listening Listening and we'll be back soon.

[A]

You really need to do that whole segment in the transatlantic accent.

[B]

The year was 1929.