Hawaiian Airlines is delaying plans to lay off more than 800 workers in the next three months, the result of changing market conditions and some good travel news.

The Honolulu-based carrier, which before the COVID-19 crisis was the state’s largest private employer with about 7,500 workers, told state labor officials in late January that it plans to lay off 810 workers in two waves, with some starting around April 1 and others around June 1. The bulk of the workers, a total of 647, are flight attendants.

But Hawaiian spokesman Alex DaSilva said this week the company already has decided it will delay the first wave of layoffs until May 1. The situation could change further, he said, explaining that the company is continually analyzing the situation.

The airline got good news on Tuesday when Kauai Mayor Derek Kawakami announced he would seek to modify a policy requiring travelers to the island to quarantine for 10 days; instead, Kawakami would join the rest of the state in adopting Hawaii’s Safe Travels plan, which lets travelers sidestep the quarantine by obtaining a negative test before traveling.

“That has a tremendous impact on demand when the mayor says people can participate in the state’s Safe Travels plan,” DaSilva said.

Hawaiian Airlines aircraft parked at the Daniel K Inouye International Airport, interisland terminal side of the airport. June 11, 2020
Hawaiian Airlines has resumed service to all destinations it served on the mainland before COVID-19. But it’s capacity remains a fraction of pre-COVID levels. Cory Lum/Civil Beat/2020

The planned layoffs are the latest shift for Hawaiian as the company engages in the complex task of right-sizing an enormous workforce of largely unionized, skilled workers at a time when travel conditions are in flux.

Perhaps no Hawaii company has suffered more than Hawaiian from the COVID-19 pandemic. What started a year ago as a suspension of service to some Asian markets quickly escalated, and by late March had widened to a large-scale shutdown after Gov. David Ige announced a mandatory 14-day quarantine for travelers coming to Hawaii.

During this time Hawaiian was burning through about $4 million per day, the company’s chief executive, Peter Ingram, said. Still, Hawaiian managed to keep its workforce largely intact thanks to some $654 million in relief funds and loans from the federal government.

That changed in October, when it finally laid off some 2,500 workers or about a third of its workforce.

The launch of the Safe Travels program on Oct. 15 has helped the company rebound. According to Hawaiian’s annual report for 2020, filed in February, during the fourth quarter, the company resumed non-stop service from Honolulu to Las Vegas, Phoenix, San Jose, Oakland, New York and Boston, which meant it restored service to all of its pre-pandemic destinations on the mainland. The company also restored flights from Honolulu to Tokyo and Osaka, Japan, and Seoul, South Korea.

Still, while all this meant doubling capacity during the fourth quarter of 2020 compared to the third quarter, the airline’s capacity was down approximately 72% compared to the same period in 2019, it reported.

The company also plans to add three new mainland destinations this month: Austin, Texas; Orlando, Florida, and Ontario, California.

A new round of federal support money for airlines meant Hawaiian was able to bring back workers previously affected by the layoffs. But that money, Hawaiian told state labor officials, will run out on March 31. So despite measures to cut costs and generate more revenue, Hawaiian said it “does not anticipate that it will be able to retain all employees beyond March 31, 2021.”

Peter Ingram, speaking to a Hawaii House COVID-19 committee in November, said the company once was spending $4 million a day to sustain its workforce with almost no revenue. Screenshot: Olelo/2020

Hawaiian’s announced layoffs come even as some economists see Hawaii’s tourism industry poised for a summer rebound, as both Hawaii residents and people in key markets get their shots.

But what’s not clear is whether Hawaii will further modify the Safe Travels program to ease restrictions as the vaccines roll out. With travelers making plans now for summer travel, Hawaii could miss out on opportunities by not signaling to potential visitors a time frame for further lifting restrictions, said Carl Bonham, executive director of the University of Hawaii Economic Research Organization.

Bonham acknowledged there are unknown factors, including uncertainties about vaccination rollouts and the effect new strains of the virus could have on the disease’s spread. But he said the state giving some guidance to potential travelers now could help lead to more bookings – and mean hundreds of Hawaiian Airline employees working rather than sitting at home.

“You can’t plan for nothing; you have to plan for something,” he said of travelers. “Then if things don’t work out you adapt, rather than sitting in limbo.”

Hawaii’s Changing Economy” is supported by a grant from the Hawaii Community Foundation as part of its CHANGE Framework project.

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