Another thing that has likely helped Hawaiian Airlines has been the islands' resilience. While the rest of the U.S. has been hard-hit by the recession, in Hawaii things aren't so bad. In July, the state's unemployment rate was just 6.1%, among the lowest in the U.S. The national rate was 9.1%.
Its housing market was not insulated from the bubble, however. From their peak, prices are down 20%, about the same as the national average. But in Hawaii, many of the homes that inflated the bubble were likely second homes, which could mean that its residents were less affected by the frenzy than tourists who paid too much for a piece of paradise.
Since tourism is one of the state's chief income sources, its relative resilience makes sense in light of its unique place in the industry. Although people might be cutting back on vacationing, some of the more fringe destinations may be suffering more than the unique, very desirable spots like Hawaii.
Making Tourism Go Farther
I asked Dunkerley if there were actions that could be taken to make tourism a bigger part of the recovery. He definitely thinks it could help: "If you want to talk about natural resources, you can think of fewer natural resources that the U.S. has such a natural competitive advantage in as tourism." Unfortunately, he worries that the current visa regime discourages tourists from coming to the U.S. "To forgo the opportunity of some surpluses in travel and tourism is astonishing," he said.
One example quite relevant to Hawaii's tourism is China. At this time, Chinese travelers hoping to visit the U.S. need a tourism visa. While Dunkerley sees this as a market that could bring a great deal of money to the U.S., its potential is being stymied. This contrasts with South Korea, which Hawaiian has seen huge growth from, since its residents no longer need a visa to visit the U.S.
So that's one action that the government can take to help the U.S. economy, but Dunkerley also suggested a way to provide some relief to the airline industry, in particular: update the nation's air travel infrastructure. "No matter what industry you're in, it would be very hard to make money today if the infrastructure you had to use was constructed in the 1960s," he said.
A prime example he cited was routing. Currently, many flights cannot simply travel the shortest distance between the cities they serve. Instead, they are routed by beacons on the ground. This forces many flights to zigzag their way to their destination, instead of just taking the most efficient route. The result is extra fuel burnt and time wasted. This and other infrastructure changes would save the industry money, which of course would result in higher profits, more growth, and additional jobs.
In the future, Dunkerley sees Asia and Europe eventually surpassing the U.S. in air travel -- which provides another good reason for the U.S. to make key growth markets visa waiver eligible. Of course, Hawaiian Airlines is in a great position to benefit from rising tourism from Asia. When the growing middle- and upper-classes of China, India, and other developing nations in the region are looking for a unique, western tropical destination, Hawaii will be their obvious choice, given its proximity to Asia.