Alaska Airlines expects unit revenue to increase by double digits on Hawaii flights this summer following recent capacity cuts to the islands.
The Seattle-based airline made the announcement in a 11 July conference call with investors during which executives also provided details about winter service reductions and increased competition to Alaska.
Andrew Harrison, Alaska's vice president of revenue management and planning, tells investors that this summer the airline cut 2% of its overall capacity, a move that effected 12 markets and resulted in 54 fewer weekly frequencies.
The majority of flights cut were on routes between Hawaii and the California cities of Oakland, San Jose and Sacramento, Harrison says.
This July, Alaska will serve the Kona-Oakland and Lihue-San Jose routes four times weekly, down from daily service in July 2013, according to Flightglobal's data provider Capstats.
Alaska has cut services on its Kona-San Jose route and its Lihue-Oakland route from daily service last July to thrice weekly service this July. And its flights on the Maui-Sacramento route have been cut from a total of 44 roundtrips in July 2012 to daily roundtrips this year, Capstats shows.
"Of the Hawaiian markets that we have reduced this summer, as we look forward we are seeing double digit unit revenue growth from these cuts," Harrison says. "We are seeing solid summer demand."
Capstats and Alaska Airlines investor presentation
The airline also made cuts this summer to Alaska markets and those along the US west coast.
It will operate 208 roundtrips on the Anchorage-Fairbanks route this July, down from 236 last July, and 92 roundtrips on the Fairbanks-Seattle route, down from 123 during the same period last year.
Alaska also cut service between Seattle and Long Beach, Oakland and Pasco, Washington. And it slashed flights between Portland and Orange County and between San Jose and Reno, Nevada, according to the airline.
Harrison also provided more details on capacity reductions to Alaska's upcoming winter schedule.
The airline typically operates 158 weekly frequencies to Hawaii in the winter, but will trim that number by 10 this winter. It will also cut its weekly transcontinental frequencies by eight, down to 117.
Most of the eliminated flights are on Tuesday and Wednesdays, the airline says.
"That's a total of 18 aircraft per week that we will not be flying in the winter to better match demand with supply. This is the first time we've ever done these day-of-week cuts, and we'll be watching them closely," Harrison says.
He adds that Alaska has no plans to reduce its flying to and within Alaska, despite increasing competitor pressure.
The airline says that in the third quarter of 2013 other airlines have added 7.4 more daily flights to Alaska compared to the same period last year.
United Airlines' service to Alaska has increased by three daily roundtrips this summer compared to last, Delta Air Lines' service has increased by 2.4 daily roundtrips and both JetBlue and Virgin America have added one daily roundtrip each, Alaska says.
Additionally, United will have one more roundtrip during the fourth quarter of 2013.
Still, Harrison seemed confident.
"Competitors come and go in the state of Alaska," he says. "We are going to stay the course and you should not expect any major capacity adjustments from us as it relates to the state of Alaska. We're going to continue to work our brand and our network strength ... to manage these competitive incursions."