Peter Ingram, President & CEO of Hawaiian Airlines
On Wednesday, June 8th, I had the honor to interview Peter Ingram. Mr. Ingram is the President and Chief Executive Officer of Hawaiian Airlines. He has over 28 years of experience in the aviation industry working for American Airlines and Hawaiian Airlines. Previously, Mr. Ingram served as the Chief Financial Officer 2005-2011, and the Chief Commercial Officer 2011-2018 for Hawaiian Airlines. This interview has been edited for length and clarity.
Joshua Kupietzky: How did you start your career in the aviation industry?
Peter Ingram: I come from a business background. I was a business major in undergrad, and I worked for four years in the financial services business. I was lucky enough to realize that when I was still a young man, I was not doing something that I loved doing, so I decided to go back and get my MBA. As I was completing my MBA, I was recruited to come work in the finance department at American Airlines. In 1994, I moved down to the Dallas area. I really fell in love from the moment I took the job. I began to learn about the airline business, its competitiveness, and all the intricacies of working for an airline. I have not looked back for the last 28 years.
JK: Since 2004, Hawaiian has been the #1 carrier for on-time performance by the United States Department of Transportation. How has Hawaiian been so successful in on-time performance?
PI: It is really just attention to detail. There is a lot of stuff you can not control, such as the day-to-day weather. We are blessed to have wonderful weather a lot of the time in our network, but like every carrier, we can not control the weather. We can not control when unexpected mechanical or operational issues will come up. However, our team focuses hard on controlling what is in our control, ensuring that we have the right resources available to operate. It has proved out over time, and it's something that our team takes a lot of pride in looking at the DOT [Department of Transportation] stats when they come out every month and seeing if we are in our proper spot at the top of the list. We have been fortunate to execute well, and now we have an 18-year streak of being the number one carrier in terms of on-time performance. It is something we take a lot of pride in.
JK: Hawaiian Airlines, like all carriers, has retooled its network since the start of the pandemic. What has worked and what hasn't? As you continue to emerge from the pandemic, do you see your network targeting more business or VFR (visiting family and relatives) travelers? What lessons has the pandemic taught you about its network and the mix of leisure and business travel?
PI: Given our base here in Hawaii, we have always been more focused on leisure travel, particularly for our long-haul flights to and from the United States mainland and from points in the Pacific region to Hawaii. On our neighbor island network, we fly within the islands where our business began over 92 years ago. It's a combination of VFR, business, and leisure traffic, connecting off our longer-haul flights. On the long haul, it really is a leisure orientation. We certainly serve the needs of people who live here in Hawaii as they need to travel elsewhere in the world. But most of the people on our airplanes are visitors from the mainland United States, Japan, Australia, New Zealand, and South Korea who are coming to Hawaii for a vacation.
For us, as we have gone through the pandemic, there was a period, most of 2020, where there was little demand for our services. This was because Hawaii had instituted a mandatory quarantine period for anyone who traveled into the state, deterring almost all of the discretionary traffic. That hard quarantine was in place from the end of March 2020 until the middle of October 2021. Starting in October, for travel from the United States mainland to Hawaii, people were able to begin traveling without having to quarantine upon arrival again, provided they had taken a PCR test to show that they were COVID negative within three days of their departure. That allowed us to get started again, primarily on those North America to Hawaii flights. It was a bit of an uneven recovery, particularly in the early months and really through a lot of 2021, as we had different surges in cases of COVID 19. Currently, we are in a pretty good situation demand-wise. As we continue through 2022 the effects of the pandemic are waning more. We see very strong demand for people wanting to take a Hawaii vacation from the United States mainland, and so we're actually flying a larger schedule now than we did before the pandemic. We've added service to Ontario, California, to Orlando with a nonstop flight, and to Austin, Texas, in addition to everything we were flying before the pandemic coming back. International travel has been a little bit slower to come back, given some of the restrictions in the countries we serve. But right now, we're seeing a good recovery there. We've been flying throughout 2022. We're getting ready to start New Zealand service again in the beginning of July. We've got Korea up and running, and we're looking forward to Japan starting to open up more in the back half of this year. That will get us to the point where we're really fully restored in terms of demand throughout our network.
JK: When do you anticipate travel will return to pre-Covid levels? And how big of an impact with Japan opening its borders for tourists for Hawaiian?
PI: For travel to Hawaii, Japan is the most important international destination. Overall, before the pandemic, about 25% of our revenue was in our international markets, and of that 25%, about three-quarters of it was demand from Japan. It is a very important piece of our network. They haven't fully opened up yet, but the restrictions that are in place are beginning to loosen. It is really important for us to get that last piece of the puzzle in place so we can be moving forward with the full opportunities of our network available to us again.
JK: Do you believe that a hub-to-spoke model is more beneficial to Hawaiian than a point-to-point model? Do you plan on starting service between different cities on the mainland United States?
PI: It is something that we consider from time to time. What we want to make sure we're doing is if we're going to enter a new market, we want to make sure that we are positioned to provide something to the market that others can't provide. For the most part, we've got a unique brand proposition around really understanding the needs of people traveling to, from, and within Hawaii. Because we focus on that, we're able to compete effectively with carriers that are, in almost every case, much larger than us and have different levels of resources than we do. We compete effectively because of our depth of understanding the needs of travelers in those markets and what it takes to be successful. For us to stray beyond that formula, we would need to make sure that we're bringing something special to the party that justifies us entering a different market.
JK: What kind of impact do you believe these inter island flights have on Hawaii and the different islands they serve? In addition, you fly these routes using Boeing 717 aircraft.How long do you think you could use 717s on inter island routes before you replace them?
PI: The inner Island market is really unique, and there are not many places in the world where you see flights with 100 to 250-mile flights with the volume of traffic that we carry. In total, there are upwards of 6 million passengers a year traveling between the main cities in the state by air, and all of those flights are, as I said, between 100 miles and 250 miles. If you think about it, in the context of the mainland United States almost all of those 100-mile and 250-mile connections between cities, people are going to take a car, a bus, or a train rather than getting on an airplane to make those short flights. In our case, the state's main cities are separated by the Pacific Ocean and there is no surface transportation. There are no roads, no bridges, and no ferries to travel between the islands. In many respects, we are the highway system of the state of Hawaii with our inter Island flights. The 717 has been a terrific airplane for this. It was originally introduced in 2001 and designed by McDonnell Douglas before Boeing acquired McDonnell Douglas. It follows in the line of the DC-9 family and the MD-80 family of aircraft. The Boeing 717, when McDonnell Douglas designed it, was going to be the MD-95. It doesn't have the range of narrow-body jets that are far more common, like the 737 or the A320 family. But it is in the range for the distances we're flying, and it's really been a fantastic airplane. We like it a lot for what we're doing. It's been the perfect airplane for the markets we serve. We intend to operate it at least through the middle of this decade. We are constantly looking at the state of the airframes we have and the engines to make sure we've got a long-range plan for keeping it maintained and operating efficiently. Our assessment right now is we don't need to do anything about replacing that airplane through at least the middle of the 2020s.
JK: Hawaiian Airlines has ordered and is set to receive both the A321neo and the 787. Why did you go for the A321neo instead of the 737 MAX to unite the fleet to one manufacture Boeing or Airbus?
PI: It is because of the markets we serve. We want to make sure that we're always looking at what the best airplane is for the markets we're serving. When we chose the A321neo, we ran a competition with the 737 MAX family, and we had a very specific mission in mind. It was flying from destinations along the West Coast of the United States to Hawaii. These are all in the 2,500 to 3,000 mile range for the specific routes we were serving. The A321neo was the clear winner in terms of being able to operate economically over those distances. It's a little larger than the 737-8 MAX and that gives us some operating efficiencies. Compared to the 737-9 MAX, it can operate all of the missions we needed, whereas the 737-9 MAX would have had some operational limitations with some of the shorter runways in Hawaii. It became clear to us that the A321neo was the airplane we wanted to focus on. When it came to thinking about the long haul airplane of our future, similarly, the 787 had an awful lot of advantages in terms of the efficiency and technology that the aircraft provides. We think it's going to be a fabulous airplane for the next decade and beyond. We are looking forward to getting it when it's available.
JK: How do you view the main changes that have come about in the aviation sector because of the pandemic? For example, a lot of flyers think about change fees. Many airlines including Hawaiin have waived them during COVID. Does Hawaiian Airlines plan to waive change fees indefinitely? Do you think change fees are gone for good, and if you remove them indefinitely, how would you adapt that part of your business if they were?
PI: We have eliminated change fees. That was the decision we made in 2020. It was really part of using the pandemic to go and think about some of the elements of our business that were not as customer-friendly as they should be. Frankly, given our leisure orientation, change fees were never a significant part of our revenue stream as it is for more business-oriented carriers. We thought that that was a good opportunity to take away those change fees. I do not know if they're gone for good broadly, but as far as we're concerned at Hawaiian Airlines, they're gone for good from our perspective. One of the other changes we made was with our Hawaiian miles program. Traditionally we had our miles expire if there was no activity in a frequent flyer account over an 18-month period. We decided that we wanted to make that program more flexible for our guests. We set up our Hawaiian miles to never expire. That was one of the other changes we made along the same regard. It is really just trying to think about what we can do to serve our guests better and to make sure we're addressing their needs as we go forward.
JK: I know Hawaiian has set a very ambitious goal of getting to net-zero emissions by 2050. How do you plan to achieve this goal?
PI: Well, I think it's going to be one of the important challenges of the next generation for all of us in the airline industry. It is absolutely one we have to solve. The interesting thing for airlines like us that have set a goal of being net-zero by 2050 is we really don't have all the answers about how we're going to get there. There really is not a way with current technology to fly without using some amount of fossil fuels to fly long distances. Particularly when you're doing long haul flying like from Hawaii to the mainland [United States] or Hawaii to Tokyo or Sydney. There are however a number of pathways that we know are going to be important on the journey. One of them is to make more sustainable aviation fuel more broadly available which does exist today. It is jet fuel that is derived from biological sources as opposed to fossil fuels. Different plant-based inputs can be used to create a fuel that can drop in with a 50-50 mix of jet fuel into the same airplanes and same tanks that are used today. In the next decade it is probably the most important thing that we can do and that the industry can do to make progress on decarbonizing our business. Longer-term there are going to be evolutions in propulsion technology, the engines that are on our airplanes. We know that every 10 or 15 years there's a new generation of airplanes. Over the history, each one of those generations has been 10% or 15% more fuel-efficient than the engines that preceded them. That is going to be something that can help us. I think we will have to become more efficient about how we use our air traffic control resources to fly more direct flight routings. That can help on the margin of how much fuel we consume, therefore how much carbon dioxide we emit. It is going to take a variety of all of those things. For short-haul flying, I think there's a prospect that we could have either electric or hybrid electric power on airplanes. However, that is unlikely to be feasible for longer-haul flying. There are certainly some who believe that one of the long-term solutions for long-haul flying is going to involve using hydrogen as a source of energy. The jury is out about whether that will take us there. I think this is one where we have to lay out a pathway to get there with what we know. When that does not get us all the way there, then we have to incorporate what we believe about the future that will help get us further. Then for some period of time, in order to complete the journey to net-zero, we're probably also going to need some amount of carbon offsets or carbon capture. That said, whatever we can't eliminate from the carbon dioxide we're putting in the atmosphere, we're going to have to do something to offset that to counteract the influence of what we're doing effectively. That is going to be the final piece of the puzzle. Before we get to that, we really need to think about what we can do to fly more efficiently, use different technology, and use different sources of fuel.
JK: Hawaiian recently made a deal with SpaceX for inflight entertainment. How will this deal work? How will using SpaceX's satellites help with inflight entertainment?
PI: It is something we are very excited about. Having inflight connectivity on airplanes is not particularly new right now. It's been around for a number of years. One of the things we get asked by our guests a lot is how come we don't have connectivity on our Hawaiian Airlines fleet right now? The reason we've lagged in this is because the coverage for inflight connectivity over the Pacific Ocean has only recently become available with any sort of decent quality connectivity. The first generation of Wi-Fi connectivity for airplanes was coming from ground-based towers, and you can't have a bunch of ground-based towers over the Pacific Ocean. All of those flights used to basically lose that coverage as soon as you left the West Coast. Following that, they moved to satellite technologies, and the early satellites were better, but they were still pretty spotty over the Pacific. The Starlink system, which is the division of SpaceX that we're working with, for the conductivity we're going to put on our plane, uses a new type of satellite technology which is called Low Earth orbit satellites, unlike the traditional satellites that rotate with the Earth and have one beam that goes down to the same spot all the time. These satellites are constantly rotating the Earth. That means you can get constant coverage even in oceanic areas. It is going to be high quality broadband services. It's going to be as good as or better than the connectivity you have in your own home. We intend to start providing it as soon as next year. We're going to provide it absolutely free. Our motto is that we want everyone to be able to use it. We want it to be free. We want it to be frictionless for our guests. We can not wait until we start rolling it out on airplanes sometime in 2023.
JK: We started this interview talking about your background in the aviation industry. What advice do you have for young people trying to start a career in the aviation industry?
PI: I'd say it's a fascinating business. There are lots of different opportunities for people. Just earlier today, I welcomed a class of 24 new pilots to our company. We're bringing in flight attendants, mechanics, airport workers throughout our system right now, and people in our management team. When I have the chance to talk to new employees, what I always say is, “look, there are plenty of opportunities here, what you really need to do is bring a willingness to learn and a curiosity to ask questions.” We benefit greatly from bringing new employees in because they bring us fresh perspectives. Sometimes, after doing this for a while, you get used to the same old routines and doing things the same way. Constantly bringing new people into our organization is a way to make sure that we're challenging ourselves, keep rethinking things, and keep looking at ways to improve to get better. That makes it a great place for us, and it makes it a great place to work for them. It is a great combination.
