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By Rick Daysog
Advertiser Staff Writer

Carriers will have capacity to bring nearly 500,000 more passengers next year

At a time when many U.S. airlines are cutting back capacity to Mainland destinations, carriers plan to increase flights to Hawai’i.

During the past several months, half a dozen airlines serving Hawai’i have announced that they are adding about 60 regularly scheduled flights a week to the Islands, some from markets as far away as Charlotte, N.C., and Detroit.

According to a recent study by the Hawai’i Visitors and Convention Bureau, the nation’s airline industry plans to add more than 497,000 more passenger seats to Hawai’i in 2010. The additional capacity represents about a month’s worth of airline capacity, said HVCB CEO John Monahan.

The increase is good news for the local travel industry, which saw a 15 percent decline in capacity after last year’s twin shutdowns of Aloha Airlines and ATA Airlines, the global financial crisis and soaring fuel prices.

“The amount of new service started this year or that has been announced for next year is huge,” said state Tourism Liaison Marsha Wienert.

“That tells you that the airlines have confidence in Hawai’i as a destination.”

Hawaiian Airlines is adding the most capacity with the delivery of its new, long-range Airbus A330-200 aircraft in April.

The state’s largest airline plans to add 21 weekly flights, including daily flights to Maui from Oakland, Calif. and San Diego as well as a daily Los Angeles-to-Honolulu flight.

The new Airbus jets are part of the local carrier’s plan to spend as much as $4.4 billion over 15 years to acquire up to 24 new long-range aircraft.

Over the longer term, Hawaiian’s new Airbus jets gives it the capability to fly direct flights out of New York and other Atlantic coast cities, making it easier to market Hawai’i tourism to new East Coast markets, said David Uchiyama, marketing director for the Hawai’i Tourism Authority.

UPGRADES IN EAST

U.S. Airways has already started up its own East Coast connection.

The Phoenix-based airline last week launched daily nonstop service from Charlotte, N.C., augmenting the company’s existing Hawai’i service from its Phoenix hub.

Meanwhile, Delta Air Lines has said it will resume direct flights to Honolulu from Detroit starting in June.

The Atlanta-based carrier, which stopped flying directly from Detroit in 2004, will operate three flights a week from the Motor City, which will make it easier for travelers from the Eastern seaboard to travel to the Isles.

To be sure, most of the growth will come from West Coast markets, especially those once served by Aloha and ATA.

CAPACITY STILL OFF

Alaska Airlines, which only began daily flights to Hawai’i two years ago, said it plans to add 14 flights a week to the Islands from California, making Hawai’i one of the airline’s largest markets. Last month, the carrier began flying direct flights to Kona from a former Aloha and ATA stronghold, Oakland, Calif.

As a result of the expansion, about 11 percent of the carrier’s capacity will serve the Hawai’i market.

Continental Airlines plans to beef up service from other former Aloha and ATA routes. Starting in March, the airline said it plans to fly four times a week to Maui from Orange County, Calif.

It also plans to increase the frequency of its Orange County to Honolulu flights from four days a week to seven days a week.

David Carey, CEO of Outrigger Enterprises Inc., estimates that the overall airline capacity is still off about 5.5 percent from its pre-Aloha and ATA days. But he said that’s much better than other Mainland markets where airlines have cut back as much as 20 to 30 percent.

“We’re still still down several percent but anything showing positive growth going forward is good news,” he said.

ONLY NEWS WAS BAD

The increased passenger lift represents a sharp reversal from early 2008 when Hawai’i's travel industry was struggling to persuade Mainland carriers to help fill the void created by the shutdowns of Aloha and ATA.

Many of the carriers were reluctant to increase capacity due to soaring fuel prices and the global economic meltdown.

What’s more, some eastbound carriers such as Korean Air Lines had planned to expand their service to Hawai’i but later reconsidered after bookings tailed off as a result of fears of the H1N1 flu.

“It was one thing after another. First you get hit with fallout from the airlines, then it was the jump in oil prices, then you get hit with the financial crisis and then the H1N1 fears,” Uchiyama said.

“Talk about getting beaten up.”

A local family has purchased a 189,000-square-foot cold/freezer food distribution building in West Oahu’s Campbell Industrial Park.

The building at 91-315 Hanua St., which is occupied by a single tenant, C&S Wholesale Grocers, was purchased by KDI Investments Inc. for $19 million, according to Colliers International, which handled the sale along with the Los Angeles office of Colliers International. KDI Investments is owned by siblings Malcom Tom, Kenton Tom and Joanna Leong, who also own the Wailana Coffee House in Waikiki.

The seller was Tower Plaza Associates LP, which bought the building in 2006 for $18.75 million from Pacific Warehouse Inc., a related company of Foodland Super Market Ltd.

“The buyer stepped up and purchased the property at this opportune time because of the high rates of return with an in-place credit tenant,” said Mark Bratton, the senior vice president at Colliers International who represented the seller along with Executive Vice President Scott Mitchell. “Considering the eventual upswing in the market cycle, investors will not see this type of return three to five years from now. This is impeccable timing.”