Continental says
flying to Hawaii
is tough haul

The carrier unveils a turbulent
financial picture to an isle
tourism association

By Russ Lynch
Star-Bulletin

Continental Airlines made a profit of $535,000 on its New York-Honolulu route in March, but in June it lost $634,000 on the same service. The usually secret numbers were cited by a Continental executive yesterday to illustrate how tough it is for airlines to make money in this market.

"We kind of fool ourselves if we look at how full our flights are," Ron Wright, Continental's managing director of sales and marketing for Hawaii, told a meeting of the Hawaii chapter of the Travel & Tourism Research Association.

Wright and Sean Daniels, Continental's revenue management expert from its Houston headquarters, produced charts to show how closely airlines monitor what they see as the most important factor of their business -- the profitability of carrying each passenger.

Wright said he was taking the rare step among highly competitive airlines of disclosing financial details of a particular service in order to show the complexities of balancing costs and revenues. It is particularly hard to do, Wright said, in a long-haul leisure market such as Hawaii.

The long flights tie up aircraft, for example. A plane could make 10 flights within the mainland in the time it takes for one West Coast-Hawaii round trip, he said. Further, the over-water flights require the biggest -- and therefore most expensive -- aircraft, he added.

Wright said the New York-Honolulu service he described had revenue per available seat mile in March of 7.8 cents but in June, with most passengers flying with low-fare tickets purchased months in advance, the revenue figure dropped to 5.98 cents.

Continental and the other airlines serving Hawaii say they would be happy to provide more seats to the islands if they could be sure of making money by doing so.

One way to help that would be to create demand in off-peak days of the week and off-peak seasons, Wright said.

Wright, who is a member of the Hawaii Tourism Authority, said the role of the airlines has come up increasingly at the HTA and that Continental is taking its message public to help the HTA educate the public about tourism.

He said he wants the HTA to hire a full-time aviation liaison officer to work with the airlines and the state.

There also should be state-private sector partnerships to develop ways of improving results for the airlines so they can deliver more seats at a satisfactory return, he said.