Inside Hawaiian Airlines’ In-the-Works Joint Venture with Japan Airlines

Hawaiian Airlines’ Aaron Alter shares how an in-the-works joint venture with Japan Airlines will benefit both companies—and their passengers

Aaron Alter shares the details behind an in-the-works joint venture between Hawaiian Airlines and Japan Airlines
Aaron Alter, Hawaiian Airlines

Before the prospect of becoming a US state was even a twinkle in Hawaii’s ocean blue eye, the archipelago was already intimately familiar with another nation: Japan. Governor David Ige, for example, was born in the Aloha State to a family of Okinawan descent. And to this day, Hawaii remains one of the most popular tourist destinations for Japanese travelers.

“Japanese tourists have no shortage of places to go when they want to go to the beach,” says Aaron Alter, executive vice president and chief legal officer of Hawaiian Airlines. “They can go to Indonesia, Malaysia, or Singapore, but Hawaii is so cosmopolitan and has a culture rich in Asian influences. Japanese tourists just feel comfortable here.”

It only makes sense, then, that Hawaiian Airlines, the state’s de facto flag carrier, would make travel between the destinations that much easier. For years, that partnership manifested as a codeshare with All Nippon Airways. But Hawaiian is currently embarking on a more fruitful arrangement with Japan Airlines (JAL), a joint venture that aims to make booking, flying, and inter-island travel smoother and more flexible.

“Many joint ventures are much broader and fly off of multiple routes, but this one is just Hawaii to Japan. It focuses on our primary international market, but also on an important part of JAL’s business.”

Alter and his team have been involved at every step of the process. “Many joint ventures are much broader and cover multiple routes, but this one is just Hawaii to Japan,” Alter says. “It focuses on our primary international market, but also on an important part of JAL’s business.”

It’s rare for an airline to have such a strong geographical identity. United, Delta, Southwest, and the rest of the major airlines are significant because they can take passengers anywhere. But what makes Hawaiian Airlines special is its mission.

“We’re very focused on being the premiere destination carrier to and from Hawaii,” Alter explains. “Many airlines fly to Hawaii, but it’s usually just a very small part of their business, whereas this is our entire business. All of our flights either emanate from or return to Hawaii every single day.”

Of the 200–250 flights a day that Hawaiian’s sixty airplanes host, roughly 170 of them shuttle locals and visitors between the state’s six major islands, including Maui, O’ahu, Kaua’i, and Moloka’i, among others. While Alter notes that Hawaiian’s focus is on the leisure traveler, he also says that the archipelago’s lack of a functioning passenger ferry system—a consequence of the rough waters dividing the islands—has also allowed the airline to serve local businesspeople.

“We have people who commute on us,” Alter says. “It’s so easy to get on one of our planes and fly to and from the neighbor islands every single day. That’s how some of our guests go to work.”

Once the JAL joint venture is in place, travelers will enjoy a greater choice of flights between Hawaii and Japan, as well as more seamless routes in between the myriad islands that make up both Hawaii and Japan. Alter also notes that those vacationing to Japan will be able to enjoy the comfortable design of Hawaiian’s aircraft, which was crafted with the leisure traveler in mind as opposed to the more business-oriented design of JAL’s planes.

The planes will be functioning interchangeably on the trunk route due to the “metal neutral” nature of the venture, which means that the two airlines will be sharing revenue on the trunk route. “We’ll be selling all of JAL’s flights like they were ours, and they will be selling our flights as if they were theirs,” Alter says. “It’s airplane agnostic.”

As of now, the joint venture agreement has been signed, and codesharing between the airlines has begun. Hawaiian will be applying for regulatory approval in the realm of antitrust immunity in both the United States and Japan. In the meantime, Hawaiian is slowly easing into the growth it has been enjoying over the past several years, with the airline having just announced that it will be procuring a fleet of Boeing 787 Dreamliners. It is also in the midst of inducting a new fleet of Airbus A321neos. These planes accompany what Alter describes as “one of the newest fleets in the industry” in terms of the average age of planes.

Hawaiian isn’t rushing into new ventures, however. He notes that the Dreamliner won’t be flying for the airline until 2021. “We’re a tiny carrier in the general scheme of things—just 2 percent of the industry,” he says. “But with the new planes we’ve been getting we could theoretically fly from here to almost any place in Europe, Australia, and certainly into China.”

However, Alter also notes that the management team have to assess what the demand is as well for tourists from China coming to Hawaii. Right now, that demand isn’t high enough to pursue beyond a single flight to Beijing, but the option is on the table if that changes. “These planes will give us that capability to tap into whatever the growing tourist market will be for Hawaii,” he continues.

One fact, though, remains: Hawaii, with its idyllic, oceanfront vistas and verdant wildlife, will always be a tourist destination. Alter, who spent his youth there and couldn’t be happier continuing his career on the island, isn’t shy when he says the state “sells itself in terms of its natural beauty and the great warmth and aloha spirit of its people.”

Photos: Courtesy of Hawaiian Airlines

“As Transfer Agent for Hawaiian Holdings, I have thoroughly enjoyed working with Aaron when he was at Wilson Sonsini and more recently on transformational changes at Hawaiian Holdings, such as initiating cash dividends and DRP. Aaron’s balanced business and legal perspectives complement his pleasant demeanor—a joy to work with!” JOSHUA P. McGINN, Senior Vice President, Western Region Relationship Management, AST