$600K study says we’re stuck with Hawaiian Airlines
While the American Samoa Government has improved its relationship with Hawaiian Airlines, an air transport marketing study recommends, among other things, that ASG continue dialogue with the Honolulu-based carrier.
The study also revealed that two U.S. airlines have responded favorably to the possibility of providing air service to and from American Samoa, but none want to seriously consider launching such service any time soon.
The federally funded study was awarded in 2012 to UBM Aviation-ASM, based in Washington D.C. The contract of $599,999 was for the company to cover a wide range of air transport areas, including air service between the territory and the U.S. as the local government for past years has tried unsuccessfully to increase the frequency of Hawaiian Airlines weekly flights, or attract another U.S. carrier.
According to the study, Hawaiian is best positioned to add flights and reduce airfares for travel between Pago Pago and Honolulu with connections to the US mainland and Asia; and additionally, while ASG has “improved its relationship with Hawaiian” it “must take practical steps" that will be good for both sides.
The next step to be taken, as recommended by the study, calls for continued dialogue with Hawaiian to further strengthen the relationship that has developed through a series of meetings and other communications in the past year.
It’s also recommended that ASG make a decision regarding the resources the government is willing and able to provide as incentives for Hawaiian to increase the number of PPG flights and offer more promotional fares.
Furthermore, ASG should facilitate connections at Pago Pago International Airport, based initially on the proposal for Polynesian Airlines to operate PPG flights from Apia's Faleolo airport (APW) on the nights when Hawaiian comes in, timed to connect in both directions.
OTHER U.S. CARRIERS
As part of the study, the contractor also made contact with other U.S. carriers — besides Hawaiian — as well as contacting some foreign carriers.
Among the domestic carriers contacted were United Airlines and Alaska Airlines, and the study revealed that both airlines “responded favorably but not decisively to the possibility of launching Honolulu-Pago Pago service with B737-800 aircraft, but neither wants to consider it seriously for startup before 2016 or 2017.”
It also says that ASG officials have been introduced to planning staff of United and Alaska and recommends that ASG should maintain dialogues with them, making sure that American Samoa remains on their list of potential new routes in the Pacific.
According to the study, incentives for United or Alaska to launch Pago Pago service are not an issue now, because both airlines have larger strategic factors to solve before it becomes a real possibility.
“Nonetheless, the ASG should decide what amount of money or the equivalent in waivers of fees and charges it will be prepared someday to commit,” the study suggests. “With two weekly roundtrip flights representing about $10 million of annual cost and revenue, an incentive proposal would be more to get attention from the airline decision makers than to materially change the economics of the route.”
The study further points out that none of the major US airlines had considered Pago Pago in recent years "until we approached them, and continued dialogue is needed because they will not easily or immediately decide to start service.”
Also revealed in the study was that ASG was approached in 2013 for support of a Honolulu charter program and may receive similar requests in the future. In considering such support, the study says ASG should recognize that Hawaiian Airlines is likely to view it negatively.
The study outlined two factors that would determine how strongly Hawaiian might object: the scale of the charter program and the level of ASG support (larger scale and greater support could create more problems with HA); and what ASG might, at the same time, offer Hawaiian for fairness, to achieve the same results.
The study recommends that ASG first consult with Hawaiian about what support it might require to expand its flight schedules and offer lower fares on the Honolulu-Pago Pago route. It further recommends that ASG consider providing support to charter promoters only after it makes every effort to work with Hawaiian for satisfactory expansion of Pago Pago air service, and conducts careful due diligence on the program's sponsors and plans.
See future edition of Samoa News for other issues covered in the study.