Hawaiian Airlines Receives $654 Million in Relief Funds

In total, Hawaii businesses will receive $2.7 billion of the initial wave of COVID-19 relief funds. Of that, Hawaiian Airlines receives $654 million in relief funds, which will help keep Hawaii’s largest airline afloat

The $2.7 billion Hawaii businesses are receiving is part of the larger $2.2 trillion CARES Act. And, Hawaiian’s share, totaling $654 million, is the single biggest chunk being disbursed to a Hawaii-based business. Of course, Hawaiian Air is, not only the largest Hawaii-based airline, but they’re the single largest private employer in the state too. Prior to cessation of most travel, Hawaiian had about 7,500 employees within its ranks.

Burning Through Cash

Hawaiian Air’s CARES Act funding is actually split between two different types of aid – $290 million to be used to pay employees under the CARES Act’s $25 billion Payroll Support Program for airlines and a $364 million loan to provide additional cash for operations.

However, Hawaiian’s CEO Peter Ingram says that the “it is not a long-term fix, but it does help to buy us some time so that, as we get past the immediate crisis, we’re in a position to resume our business and have a team in place to do so.”

The Civil Beat reports that the airline is burning through $4 million to $4.5 million per day. That’s enough, according to Ingram, to pay for 75% of their payroll expenses based on figures for April-September 2019 figures. Payroll expenses, though, are expected to be lower as, according to company reps, about half of Hawaiian’s employees have signed up for voluntary furlough.

How Much US Airlines Got

While Hawaiian’s $654 million sounds like a lot of money, the actually got among the smallest amount of funding. Just take a look at what other major US airlines received:

• Alaska: $992 million
• Allegiant: $172 million
• American: $5.8 billion
• Delta: $5.4 billion
• JetBlue: $936 million
• Southwest: $3.1 billion
• Spirit: $334 million
• United: $5 billion

As a point of comparison, here’s how the airlines looked at the end of 2019:

• Alaska: 331 aircraft serving 116 destinations
• Allegiant: 100 aircraft serving 125 destinations
• American: 910 mainline aircraft serving 350 destinations
• Delta: 913 mainline aircraft serving 325 destinations
• Hawaiian: 68 aircraft serving 32 destinations
• JetBlue: 264 aircraft serving 100 destinations
• Southwest: 752 aircraft serving 101 destinations
• Spirit: 153 aircraft serving 77 destinations
• United: 843 aircraft serving 342 destinations

Clearly, Hawaiian is a small player, though they’re an important one. At the moment, flights offered by Hawaiian, Mokulele, and Southwest are the only ways to get between the islands here in Hawaii. Similarly, Alaska provides vital air links within its namesake state as well.

Current Operations

Hawaiian continues to operate a robust inter-island schedule – not quite the 200ish daily flights they did before the pandemic, but still quite a few. Outside of Hawaii, Hawaiian is flying just two daily flights to Los Angeles and San Francisco, with three additional weekly flights to Seoul for cargo only. And its cargo, not passengers, that the airline is primarily hauling these days.

Competitive Pressure

Even before the onset of the COVID-19 pandemic, Hawaiian’s long-term viability was beginning to be questioned. After all, while they were still profitable, pressure from larger US-based airlines was eroding their profitability. Southwest’s entry into the Hawaii market proved to be particularly challenging – and the airline continues to expand its presence here even with the current economic challenges. So, how things play out once things return to normal remains to be seen. That said, we still don’t know what Hawaiian plans to do with their long-range Boeing 787 aircraft, which will begin arriving next year.

Hawaiian Airlines Receives $654 Million in Relief Funds, Final Thoughts

What’s a little troubling to me is all the hate that I see in the comments sections of the news regarding Hawaiian’s CARES Act funding. Yes, more recently, Hawaiian has a history of screwing its customers, but that doesn’t mean they deserve to go out of business. 7,500 jobs are on the line here – jobs that my friends and family rely on. And, again, you really don’t want Southwest to become the main player in town. Having competition, as we do now, is great for consumers. So, I hope that all our airlines here in Hawaii and throughout the nation remain solvent through these trying times.