All Nippon Airways (ANA), Japan’s biggest carrier, announced the introductory date of its third Airbus A380, the Flying Honu in sunset orange livery. The double-decker will join two other A380s operating between Tokyo and Honolulu, Hawaii (United States) on July 1, 2020.

Airbus’ delivery of the third Super Jumbo will allow the Japanese airline to offer a double-daily flight to Hawaii’s capital, increasing its weekly frequencies served by the double-deckers from 10 to 14 per week. The newest A380 will replace a Boeing 777-300ER that currently operates between Tokyo’s Narita International Airport (NRT) and Honolulu International Airport (HNL).

Senior Vice President of All Nippon Airways, Seiichi Takahashi, noted that the airline designed the interior of the A380 specifically for the route, including “family-friendly seating and a custom interior.”

“Combined with design cues from Hawaiian (HA) culture, the unparalleled comfort and capacity of the Flying Honus will allow ANA to provide unrivaled service and efficiency on this increasingly prominent route,” Takahashi continued.

Following the addition of the third Airbus A380, ANA’s capacity between Tokyo-Narita (NRT) and Honolulu International (HNL) is set to increase by 17.4%: from 12400 to 14560 weekly seats round-trip. Even without the addition of the third A380, ANA controls 32.5% of the market between Tokyo’s both airports, including Haneda (HND) and Honolulu – a major hot spot for outbound tourism from Japan.

Yet airlines around the world, including the biggest A380 operator, Emirates, are shying away from the double-decker. Does it make sense for ANA to purchase three Super Jumbos just to operate one route?

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Mapping the market: Japanese interest in Hawaii

Japan is one of the biggest tourism markets in Hawaii – not only evident by the fact that airlines offer 176 weekly flights round-trip, even during the winter months, but also by the fact that in 2018, Japanese tourists accounted for 12.2% of total visitors to the islands, the third-largest demographic group behind visitors from West Coast and East Coast of the United States.

Further data, provided by Hawaii’s Department of Business, Economic Development & Tourism (DBEDT), indicates that visitors from the Land of the Rising Sun are also the third-biggest spenders: splashing as much as $2.1 billion in 2018, averaging $241 per day. What is even more interesting, Hawaii continues to be a hot-spot for returning visitors as well: 66.9% of total arrivals from Japan visited the islands beforehand.

All in all, 1.48 million tourists arrived in Hawaii from Japan. Worryingly, though, compared to 2017, the number fell by 2.3%, even if capacity rose by 2.7% to 2.0 million yearly seats – an average load factor of 72.9%. A study paper called “Consequences of feeder delays for the success of A380 operations” by Ruehle, Goetsch and Koch claimed that in order for the A380 to reach profitability, around 70% of its seats need to be filled in a 550-seat configuration on board. ANA, meanwhile, configures its A380s to carry 520 passengers: eight First Class, 56 Business Class, 73 Premium Economy, and 383 Economy seats.

And throughout the past five years, the flow of Japanese tourists was unstable. In 2013, 1.51 million tourists arrived in the island, while just two years later, the number dropped to 1.48. Once again, in 2017, the numbers took off and they peaked at 1.52 million before dipping down in 2018.

Yet the decision to dedicate three Airbus A380 aircraft to fly to Hawaii is seemingly paying off.

Success of operations

With the launch of Flying Honu’s, visitor numbers from Japan jumped immediately: in Q2, visitor numbers jumped by 6.4%, while in Q3 2019, the number rose by 1.2%. Q4 2019 data is still unavailable. However, year-to-date (YTD) statistics showcase that the number of Japanese tourists traveling to Hawaii rose by 3.4%. A similar spike in numbers was last seen in 2013 when visitor numbers took off by 3.6% compared to 2012.

All Nippon Airways highlighted in its H1 2019 financial report that while International flight ticket sales were on a downward trend, “revenue increased year-on-year due to increases in the number of passengers on Hawaiian (HA) and European routes.” The increase in revenues on the Tokyo-Hawaii route is no surprise – after all, the product onboard is perfectly catered to the passengers.

According to DBEDT, 71.4% of Japanese visitors came to the Aloha State for vacation, meaning the rest of travelers had other reasons to visit the Pacific islands. While First Class is being phased out around the world, ANA proudly claims that the airline’s customers are finally able to book its top-of-the-line onboard product on flights to Honolulu. The carrier has only eight First Class seats and 56 Business Class seats, catering to the customers who willing to pay more (or rather let their companies pay more on their behalf). At the same time, the A380 configuration includes the newest fad in the industry: Premium Economy.

However, most importantly, there are seats specifically targeted at travelers with children: ANA COUCHii. Featuring raisable leg rests, the economy seats can be used as a bed for an additional fee, increasing the airline’s revenues on its flights. The price to use COUCHii varies from $90 (JPY 9,000) to $2,520 (JPY252,000), depending on the seasonality and the number of passengers.

Another factor, while unexpectedly, could also help out All Nippon Airways’ service to Honolulu: the trade spat between Japan and South Korea that started in July 2019. Without getting into the nitty-gritty of geopolitics, the matter of the fact is that South Korea is the biggest outbound tourism market: 2.9 million of Japanese passport holders visited the country in 2018, according to data compiled by JTB Tourism Research & Consulting.

However, with the start of the trade spat, outbound numbers dipped: on average, Year-on-Year (YoY) numbers rose by 25.5% in the period between January and July 2019. Between August and September, they only rose by 3%, and finally, dropped by 14.4% in October 2019.

Whether it will actually positively impact ANA’s numbers to Honolulu remains to be seen – a drastic drop of outbound tourism to South Korea has not resulted in improved outbound numbers to Hawaii, as mentioned above: a YTD improvement of only 3.4% was highlighted by DBEDT. Nevertheless, growing passenger numbers on routes to the Aloha State, also highlighted by the airline itself, might prove that in fact, the decision to fly Super Jumbos to the island of Hawaii is a success. For now.

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