Hawaiian Airlines is enjoying solid results from the sale of its preferred seats, reaching a revenue milestone in March. The airline is also gearing up for the introduction of an ‘Extra Comfort’ option on its Airbus A330 widebodies, which should also fetch ample ancillary revenue.
Preferred seats are currently featured on Hawaiianʼs Boeing 717s, 767s and Airbus A330s. The airline capitalizes on extra legroom at seats behind the bulkhead and exit rows.
“After posting our first million dollar month of preferred seat revenue in March, we surpassed that threshold in each month of the second quarter,” declared Hawaiian chief commercial officer Peter Ingram. “This performance has been enabled by selling preferred seat upgrades in advance starting late last year instead of only operating the product at check-in, and also expanding the sale of preferred seat upgrades to our Neighbor Island flights.”
During the third quarter Hawaiian is introducing a new Economy Comfort extra legroom product on its Airbus A330s that features 36 inches of pitch versus 31 inches in standard economy. The Extra Comfort seats are replacing the preferred seats on these widebodies. Hawaiian is offering the roomier pitch in rows 11-14 and 33-34.
Additionally, when a passenger purchases an Economy Comfort seat, he or she also gains priority boarding, on-demand in-seat entertainment, a personal power outlet, premium meal selections and a souvenir pillow and blanket set.
Pricing of the Extra Comfort seats varies by route, but begins at $60 one-way for flights to North America, with the exception of New York.
Ingram noted that Economy Comfort seats have a higher price point than the preferred seats, and that this reflects “additional product features that create both a compelling customer value proposition, as well as something that is accretive to the business without reducing our seat count”.
Hawaiian has, however, endured some cost pressure from reconfiguring the A330 cabins with the Economy Comfort product. Its unit costs excluding fuel during the second quarter jumped 5.8% year-on-year. Airline CFO Scott Topping remarked that the elevated costs were driven by maintenance expenses associated with the cabin modifications to support Extra Comfort and labor cost expense triggered by new pilot flight and duty time regulations that took effect at the beginning of 2014. Topping estimated those two items represented 2.4 percentage points of the year-on-year unit cost rise.
But as sales of Economy Comfort kick into high gear, Hawaiian should start down a path of recouping its investment, and a better cost performance in the second half of 2013.