Prediction: Airfares to Hawaii will soon drop, as airlines add flights to islands

Alaska is adding capacity to Hawaii. But can it possibly make money? Photo: redlegsfan21/Flickr, via Creative Commons. 

Alaska is adding capacity to Hawaii. But can it possibly make money? Photo: redlegsfan21/Flickr, via Creative Commons. 

Airfares to Hawaii will soon drop, I predict. 

That prediction is worth what you paid for it. But I'm nonetheless reasonably confident that in the next couple of years, we'll see airfares to the islands fall, perhaps considerably. 

Pricing in the airline industry is complicated. But at it's core, the issue is supply and demand. And perhaps you have noticed that the supply of seats to Hawaii is increasing substantially. On Wednesday, Alaska Airlines announced that starting in March it will fly three times per week between San Diego and Kona. 

Long ago, only a handful of airlines flew to Hawaii, with most flights landing in Honolulu. Amazingly, this photograph still appears on the home page for Honolulu's airport. 

Long ago, only a handful of airlines flew to Hawaii, with most flights landing in Honolulu. Amazingly, this photograph still appears on the home page for Honolulu's airport. 

Granted, this thrice weekly route doesn't mean much on its own. But consider just how much capacity Alaska has dumped into the West Coast to Hawaii market in recent years. On Wednesday, Alaska had six flights from Honolulu, seven from Maui, three from Kona and three from Lihue. This from an airline that did not start flying to Hawaii until 2007, with three flights.

Alaska Airlines is seeing the same market as Hawaiian Airlines, which has long had a dominant position in Mainland-Hawaii flights. Both realize that passengers don't just want to fly between Los Angeles and San Francisco and Honolulu. They want to fly from many U.S. cities to all the major Hawaiian Islands. Sending this shift, Hawaiian is also in the process of its own flight-adding binge, with many of the new routes avoiding Honolulu.

This is all great in theory, but I'm suspecting we'll soon see many empty seats. Remember, you also have United, Delta, American and Allegiant flying between the mainland and Hawaii. If all those airlines remain, as I suspect they will, we could be looking at lower load factors. And lower load factors generally means cheaper seats. 

There is one way fares could not drop. If enough new travelers want to go to Hawaii to keep pace with the increase in capacity, airlines can likely maintain the status quo. But do you envision increased demand for Hawaii travel?

Incidentally, my Aviation Week colleague Adrian Schofield reported this week that, so far, Hawaiian is seeing increased demand to match its increased capacity. "On routes between Hawaii and the North American mainland, demand appears strong moving into the fall and the holiday season," he wrote. "Capacity shifted into this market has been profitably absorbed, the carrier said."