Covid 19 coronavirus: Hawaiian Airlines boss Peter Ingram on when carrier will return to New Zealand

Hawaiian Airlines boss Peter Ingram says his airline is closely watching the evolution of a travel bubble between New Zealand and Australia.

There has been speculation that it could extend to some sort of Pacific bubble - including Australasia and those islands that are ready to relax quarantine rules - possibly allowing the airline to return to this country.

''We're well aware of the talk about the transtasman bubble and I think there is a lot of curiosity in Hawaii about whether we could participate in something like that,'' says Ingram.

Unlike many other parts of the United States, Hawaii has taken an aggressive approach to Covid-19. It recording 647 positive cases up to today and 17 deaths since March. It also has strict 14-day quarantines on anyone flying into the state and the same for those flying within the island group.

Although there are similarities in the approach taken by New Zealand, Australia and Hawaii in fighting the virus, there are still obstacles to a shared bubble.

Hawaiian Airlines has grounded about 60 of its 68 planes. Photo / Supplied

''Hawaii is not a sovereign state as part of the United States and I am not sure if there's a regulatory mechanism to achieve that if that was something that was desired on both sides,'' said Ingram, whose airline has been flying to New Zealand for the past seven years before its services were abruptly halted in March.

The economic damage from the pandemic meant fewer people would be able to afford to take holidays and the exchange rate could work against New Zealand travellers to the United States for some time.

''And then the question is, is it big enough to be able to sustain itself without other outlets, just given the overall small volume of traffic that exists even in normal times,'' Ingram told the Herald from the airline's Honolulu headquarters.

Ingram was integral in starting New Zealand services seven years ago and said Hawaiian - seen as an airline that could weather this crisis successfully - remained attracted to this country in the long term.

''Obviously we can't even consider it now, there's no sense of flying as long as there's a quarantine on either end of the routes. So I'm uncertain about what the timing of that might be.''

At peak, the airline flew here five times a week but direct Auckland-Honolulu links would depend on economic recovery.

"New Zealand is to be commended - your folks have done a terrific job of controlling the spread of the disease," said Ingram. "But like we see here in Hawaii, that comes with economic costs.''

Hawaii's economy is more dependent on tourism than New Zealand, and unemployment there spiked to 22 per cent in April, up from 2.4 per cent a month earlier.

Airlines could form new alliances and partnerships to work their way back and when asked whether Hawaiian could team up with rivals such as Air New Zealand, Ingram said everything would be on the table. Hawaiian has previously eschewed deep partnerships.

''I wouldn't discount the premise of that. This changes a lot of our paradigms throughout the industry,'' said Ingram, who has worked for airlines for 25 years and Hawaiian for about 14 of those.

''Airlines have been on the front end of this crisis, we are likely to say we should keep everything on the table, let me put it that way. ''

There would be regulatory hurdles, though.

Flying into a crisis

Hawaiian didn't fly to China and was affected by the crisis in the early part of March as Korean and then Japan routes were hit. But it was when New Zealand, then Australia and French Polynesia effectively closed their borders and imposed quarantines that the number of services plunged.

''Once we had the 14 days [quarantine] here in Hawaii, that really substantially ratcheted down almost all travel for us.''

The airline has 68 widebody and narrowbody planes and on average only eight were flying a day. It is down to 5 per cent of its schedule - still making some flights within the islands of the state, carrying essential personnel, but even those are subject to quarantine restrictions.

''There's little to no discretionary travel.''

Hawaiian also had single daily flights now to Los Angeles, San Francisco, and Seattle with small numbers of passengers, but they were generating more revenue from cargo. It was also running freight flights three times a week to Korea.

Although the airline would consider cargo flights to New Zealand, there were challenges given the lack of outbound exports.

''One of the challenges we face with our geography in Hawaii is there's not a lot of cargo demand outbound from Hawaii. So sometimes the economics don't work for us.''

There were faint signs of a recovery for passenger flights, but off a very low base, and much would depend on control of Covid-19.

Hawaiian Airlines president and CEO Peter Ingram. Photo / Supplied

''I think we can have more confidence in the community about the healthcare capacity of the country and tracing capacity that we're hopeful is going to allow us to get back sooner rather than later to flying at least between the islands,'' he said.

''And then hopefully it won't be too long before we can start lifting the quarantine to welcome visitors back from other geographies.''

Support package

The airline has around 7450 staff and their jobs have been protected - until September 30 at least - by the federal government rescue package under the Cares Act.

As part of a massive bailout for airlines, Hawaiian receives up to US$656m ($1.1b) in grants and loans.

''It actually requires us to keep on all of our people through at least September 30 of this year so we haven't had any involuntary furloughs.''

About half the staff had taken voluntary leaves of absence of various sorts or reduced pay. Most of the airline's grounded A330s, A321s and Boeing 717s were parked at Honolulu's airport. Some engine overhauls were being done on A321s but the airline was not in a position to spend up on major capital work.

''We have access to them for our mechanics and we haven't put them into long-term storage and the hope is that we'll be able to start spooling up a little bit more in the next couple of months.''

The airline came into the crisis in a strong cash position and besides the government aid had been able to raise funds against unencumbered aircraft. It was also reducing its cash burn from $US3.6m a day to $3.1m.

Although the future of the airline is grim, Ingram says the company has some advantages despite overall demand being pushed down, especially in the business and corporate market.

''This one doesn't affect us as much because of our leisure orientation,'' he said.

During lockdowns around the world, people had become more comfortable with video conferencing applications, which had surprised many with their effectiveness.

''I do think that leisure traffic is likely to rebound a little bit more quickly than business - you can't Zoom your Hawaii vacation.''

But there remained considerable uncertainty.

''It's going to have effects on our industry for a long time and I don't think we're going to have clarity until we get further beyond the peak of incidence of disease to see how things really shake out.''

Hawaii is popular with surfers like Kelly Slater at Backdoor Pipeline. Photo / Grant Bradley

There would be red-hot competition for passengers among surviving airlines, said Ingram.

During the pandemic, the airline had required passengers to wear masks - either their own or supplied by the airline - and restricted loads to achieve social distancing even though there was evidence the risk of transmission on planes was low.

The reduced loads were dealing a blow to yields on the few flights still operating.

''We had load factors north of 80 per cent on average throughout our system. That would suggest that at two-thirds full or half full you can't make money - that's one of the challenges I think that the industry faces more broadly in a world where distancing is being encouraged.''