Australian airline plans Brisbane-Oahu flights

Strategic is expected to offer three trips a week beginning late this year

By Dave Segal
Article from: Star-Advertiser

Michael James, who started Brisbane-based Strategic Airlines less than two years ago, has his sights set on Honolulu as the carrier’s first U.S. destination. James is the managing director of the airline and CEO of the parent company, Strategic Aviation Group.

Strategic Airlines, a 22-month-old Australian carrier, plans to announce in the next two weeks that it will inaugurate nonstop service between Brisbane and Honolulu later this year.

Heather Jeffery, spokeswoman for the Brisbane-based carrier, confirmed today from Australia that it is the airline’s intention to announce new routes “in the next fortnight” and that Brisbane-Honolulu will be one of the new services. She said operations are expected to begin in November or December.

Strategic applied with the U.S. Department of Transportation last month to fly between Australia and the United States and proposed that its first route be Brisbane-Honolulu.

The airline is expected to fly between the two cities three times a week starting in December, said David Uchiyama, Hawaii Tourism Authority vice president of brand management. He said the new service from Brisbane would open the state to a new market because all the airlines now flying to the islands from Australia come out of Sydney.

“Strategically, it’s important because we’d be able to draw from a different part of the country without them having to transit through Sydney,” Uchiyama said.

“They were here a couple of weeks ago, and we had meetings with them and they met with the state and with some industry partners. If the Brisbane departures are successful, they’d consider originating out of Melbourne.”

Australia has been a burgeoning market for Hawaii, with Hawaiian Airlines, Jetstar Airways and Qantas Airways all carrying Australian visitors to the islands. There were 143,742 visitors from Australia who came to Hawaii in 2010, up 18.3 percent from 2009.

Through the first five months of 2011, Australia arrivals are up 41.3 percent to 78,708 from 55,727 in the corresponding period in 2010, while daily per person spending is ahead 22.3 percent to $253.77 from $207.74.

Strategic has one long-range A330-200 aircraft and six A320-200s that are used for short- and medium-range flights. The company plans to add two Airbus A330s within six months, said Damien Vasta, executive commercial officer for its parent company, Strategic Aviation Group.

Strategic uses its lone 273-seat A330 to fly from Brisbane to Bali, Indonesia, and Phuket, Thailand, as well as between Melbourne and Phuket.

Jeffery, the carrier’s spokeswoman, said the airline plans to re-brand and rename itself later this year.

Several news outlets in Australia reported the airline’s new name likely will be Air Australia.

“Hawaii is definitely in our planning as well as China,” she said.

The airline is privately held by 34-year-old entrepreneur Michael James, its managing director and Strategic Aviation Group CEO.

Jobless recovery persists in Hawaii

Retail and tourism sectors rise but the construction industry “has yet to turn the corner”

By Dave Segal
Article from: Star-Advertiser

Credit card sales at businesses open at least a year rose 8 percent over the same period a year ago, according to a second-quarter business activity report released today by First Hawaiian Bank.

First Hawaiian Bank reports that Hawaii hotels had the second-largest increase in year-over-year transaction volume at 15.1 percent and accounted for the highest transaction volume at $149.9 million.

Consumers pulled out their credit and debit cards more liberally last quarter and increased spending at Hawaii hotels and restaurants as the tourism-led recovery continued to gain traction.

Credit card sales at businesses open at least a year rose 8 percent over the same period a year ago, according to a second-quarter business activity report released today by First Hawaiian Bank, the state’s largest local card processor of merchant services. The increase follows first-quarter growth of 10.7 percent over the year-earlier period.

While the report showed year-over-year gains in 14 of the 16 sectors it tracks, it doesn’t include the lagging construction sector since credit and debit cards aren’t typically used in that industry.

“We continue to be encouraged by the positive trends in both our tourism and retail sectors,” First Hawaiian President Bob Harrison said. “However, our recovery continues to be fragile and is unfortunately, to date, a jobless recovery. This is, in part, due to the continued weakness of our construction segment.”

Convenience stores showed the largest percentage increase in transaction volume with a 19.4 percent gain to $14.9 million. Hotels had the second-largest increase at 15.1 percent and accounted for the highest transaction volume at $149.9 million.

First Hawaiian CEO Don Horner said the growth in the hotel sector for the quarter reflects the strength of the tourism industry, which has continued to gain market share.

“The numbers include not only an increase in the visitor count but also an increase in the average room rate,” he said. “Our hotels were able to not only improve volume but also improve margin, which translates into an important increase in the transient accommodations tax, which helps fund our public sector.”

Visitor arrivals through May were up 6.7 percent to 2.8 million and visitor spending was ahead 15.3 percent at $4.3 billion. Statewide hotel occupancy for the same period was up 4.7 percentage points to 73.2 percent while the average daily room rate grew 9.0 percent to $188.21.

Restaurants had the second-highest transaction volume at $98 million even though it was up just 8.2 percent from a year earlier.

Home furnishings, which slipped 0.8 percent in transaction volume to $22.7 million, and travel agencies, off 25.6 percent to $25.1 million, were the only sectors that had deceased spending from the year-earlier period.

“The decrease in home furnishings is a reflection of the slower real estate market while travel, which includes outbound, is down because more people are staying home,” Horner said.

Construction, though, continues to be a major drag on Hawaii’s recovery.

In the first quarter, residential building permits plunged 37.7 percent, construction permits declined 16.4 percent, commercial and industrial permits were down 9.5 percent and government contracts were off 9.2 percent, according to the most recent data from the state Department of Business, Economic Development & Tourism.

And construction jobs are also lagging despite the state unemployment rate in May falling to 6 percent, matching its lowest level since January 2009, according to the state Department of Labor and Industrial Relations.

Through the first five months of this year, not-seasonally-adjusted construction jobs were down 2.3 percent to 140,800 from 144,100 during the same period a year ago, according to the Labor Department.

“Construction has yet to turn the corner in the recovery from the recession,” First Hawaiian economic adviser Leroy Laney said. “That’s the lagging sector of the economy.”

First Hawaiian, the largest bank in the state with $15.2 billion in assets at the end of the first quarter, processed more than $1.8 billion worth of credit and debit card sales transactions during the first half of this year, a 10.9 percent increase over the same period a year ago.

The bank has more than 7,500 merchant locations throughout Hawaii, Guam and the Commonwealth of the Northern Mariana Islands.

For Hawaiian Air, Osaka is just the start

After unveiling the carrier’s new route, an executive hints at further expansion

By Dave Segal
Article from: Star-Advertiser

Hawaiian Airlines launched its third Asian route in eight months Tuesday and said it plans to announce service to more new markets before the end of the year.

The state’s largest carrier, which has been aggressively expanding as other domestic and international airlines have been scaling back, kicked off its inaugural flight to Osaka, Japan, with music, dancing, a Hawaiian blessing and the traditional maile lei. The new service comes on the heels of Hawaiian’s inaugural flights to Tokyo’s Haneda International Airport in November and South Korea’s Incheon International Airport in January.

And there’s more expansion to come.

Hawaiian Chief Financial Officer Peter Ingram, who said bookings from Japan have been “very, very strong” despite the March 11 earthquake and tsunami, said the airline will make more route announcements next quarter.

“We’ve got some ideas about other places in Asia. We’ve got some ideas about other places in North America,” Ingram said. “And we have some aircraft availability coming up next year.”

Ingram said Hawaiian will take delivery of four Airbus A330-200s next year that will give the company the opportunity to look at some new markets.

Hawaiian, which said on March 31 it was maintaining daily Tokyo flights and moving forward with its Osaka service even though other carriers cut service due to the disasters, has been rewarded for its commitment to Japan.

“We’ve seen a real strong recovery (in Japan) as we’ve gone into the summer,” Ingram said. “Bookings for June and July are very, very strong, and we’re confident about a continuation of strong bookings going forward.”

Until Tuesday only Delta Air Lines and Japan Airlines offered daily flights from Osaka, which is Japan’s third-largest city with 2.62 million residents. The Osaka region — which includes Kyoto and Kobe — has more than 18 million residents.

The Hawaii Tourism Authority said last month it expects Japanese arrivals to increase by 3.3 percent this year to nearly 1.3 million visitors and spending to rise by 8.2 percent to $2.1 billion.

HTA CEO Mike McCartney, who flew on the Osaka flight Tuesday, said the new service will result in up to $120 million in visitor spending per year and $18 million in state tax revenue based on 86 percent capacity on the flights. For all three of Hawaiian’s new Asia flights, McCartney said the annual payoff will be up to $350 million in visitor spending and $38 million in tax revenue.

“Osaka is like a new region for us, and I think they’re hungry for Hawaii and want to experience Hawaii,” he said. “So it’s a good opportunity for the travel industry in Osaka and for us.”

Hawaiian’s flight to Osaka will depart Honolulu daily at 2:20 p.m. and arrive at Kansai International Airport at 6 p.m. the next day. The return flight will leave Osaka at 9:30 p.m. and arrive in Honolulu at 10:50 a.m. the same day. The flights will take between eight and nine hours. Japan is 19 hours ahead of Hawaii.

Akio Hoshino, president of JTB Hawaii Travel LLC, said Hawaiian’s new Osaka route is a welcome development for the tour operator after Japan Airlines decreased its seat capacity.

“It’s a very good opportunity for Hawaiian and Japan to have this new route,” Hoshino said. “We cannot survive without having air seats, so this is a great opportunity for the tourism industry in Japan.”

Leon Yoshida, president and CEO of travel agency Tellmeclub Hawaii, also welcomed the new route.

“Any time we’re looking at additional flights, it’s good for all of us, not just the tour companies,” he said.

Passengers Christine and Fritz Harris-Glade, former Hawaii residents who now live on Whidbey Island, north of Seattle, were excited Tuesday to be making their first trip to Japan after winning an online sweepstakes held by Hawaiian.

“We didn’t believe it when we heard,” Christine said. “I was a little skeptical because I didn’t think we had won, but we’re very excited to go.”

Fritz said he had received an email six weeks ago about the sweepstakes and entered his mileage number.

“I forgot all about it,” he admitted, “and then six weeks later I got a phone call and here we are.”

Maui June 2011 Sales Statistics

Brief Maui Statistics Overview:

June’s Sales Volume – June’s Residential Sales rose to 81 homes sold, while Condo Sales declined to 101 units sold. Land sales came in at 13 lots sold.

June’s Median SALES prices – Home median prices rose to $429,000, while Condo median prices dipped to $295,000. Land median price rose to $299,000.

Days on Market for Residential homes = 141 DOM, Condos = 147 DOM, Land = 145 DOM.
(General DOM Note: this is the average DOM for the properties that SOLD. If predominantly OLD inventory sells, it can move this indicator upward, and vice versa. RAM’s Days on Market are calculated from List Date to Closing Date [not contract date]. As such, it includes approximately 60 days of escrow time.) Also – Short Sales transactions can often take 4-6 months to close thereby extending the
marketplace’s average DOM.

“Year to Date Sales” numbers only compare January-June 2011 to January-June 2010. Short timeframe (monthly) views do not necessarily reflect the longer timeframe trends.
Year to Date: Comparing January-June 2011 to January-June 2010 – Residential unit sales rose (+4%), average sold price = $732,569 (-4%), median price = $445,000 (-5%) and total dollar volume sold = $324,528,034 (-1%). This reflects the bump up last year due to 2009-2010 Federal Tax Credit programs and 2011 numbers will probably catch up as the year progresses. Condo unit sales decreased (-3%), average sold price = $527,534 (-30%), median price = $325,000 (-24%). Total Condo dollar volume sold = $340,259,146 (-33%).
Land – NOTE: Land Lot sales are such a small sampling that statistics in this property class are not necessarily reliable indicators. Land lot sales decreased (-3%), average sold price = $643,744 (+20%), median price = $315,000 (-30%), Total dollar volume = $44,418,351 (+17%).

Also, total sales for immediately past 12 months: Residential = 830, Condo = 1,125, Land = 124.

July 6, 2011 – Active/Pending/Contingent status inventory:
July June May April Mar. Feb. Jan. Dec. Nov. Oct. Sept. Aug. July
Homes 869 917 935 958 964 953 963 974 976 1,001 981 994 1,008
Condos 1,124 1,159 1,203 1,305 1,331 1,379 1,383 1,371 1,347 1,394 1,455 1,503 1,412
Land 515 532 547 554 557 566 569 601 596 601 620 604 601

Current Absorption Rate base on this month’s Active inventory divided by June Sales is:
Residential = 10.7 months, Condo = 11.1 months, Land = 39.6 months.

IN A NUT SHELL…… the good, the bad….. AND THE ROAD AHEAD ……
Strong buyer-showing activity is now evidenced in actual reported sales. Residential and Condo unit sales for March – June show sustained increase over the previous six months. The next few months will reveal if this is just an uptick or a trend that lasts. Inventories have declined 13-20% over the past 12 months. Many short sales and REO (bank owned) properties will need to be absorbed as sales before we can move ahead to a more normal marketplace. Interest Rates are remaining near historic record lows which may help motivate would-be Buyers to go ahead and buy IF they can qualify. Current World and US events will have ripple effects on cost of living, consumer confidence, and eventually our Real Estate Market.

FOR SELLERS: Sellers who don’t really need to sell (just “fishing?”) should stay off the market, and clear the marketplace for those who REALLY have to sell. UNLESS- you are motivated to Upsize, Downsize or Upgrade – While selling now will net less, your next property will cost less. Sharpen your pencil, talk to your CPA and Realtor® to explore the hidden benefits or consequences. Make no assumptions that will sting later. To be successful, Sellers need to beat competing properties with better property condition, REALISTIC pricing, good marketing, and flexible, creative terms (Seller Second Loan, Agreement of Sale, Lease-with-option-to-buy, and Sale-with-lease-back to seller). Days on Market figures show that properties priced right will sell in a reasonable timeframe. “Priced Right” is still the determining factor.

BEST Deals are selling, everything else is getting old.
Pro-Active Sellers are getting their properties appraised, inspected and surveyed in advance to encourage knowledgeable offers from realistic Buyers. This can prevent unanticipated escrow fallout or Buyers whittling your price down during the transaction when previously unknown facts come to light. Unrealistic Sellers continue to be ignored by the market and miss current opportunities that later become woefully apparent. They may even end up in a Short Sale or Foreclosure situation that could have been avoided.

FOR BUYERS: Low interest rates may start to inch up. Buyers should get Pre-Approved so they can shop in confidence (fewer last minute disappointments due to non-funding loans). More “short-sales” and foreclosures are happening in the marketplace, yet they can be less of a bargain than they seem, requiring more hurdles to leap and more time (often 4-6 months) to close, if at all. Be prepared, but BE REALISTIC. Lenders are much more stringent in requirements for loan approval.

First-Time Home Buyers – Many programs are available….. Attend a First-Time Home Buyers workshop, get familiar with the process, get qualified/approved, do your homework to get your own home. Many current owners never thought they would be able to own until they attended a workshop, discovered they could own a home, and are glad they did.

This low point in the market is your rare chance, so check it out carefully.
Disclaimer: Zooming in on the figures of a specific geographic area or property type may lead to different conclusions that the overall view. Maui’s market place is much smaller than Oahu’s, and a few high or low sales have a greater effect on the
statistical numbers without necessarily indicating a big market swing one way or another.

Information provided by the Realtors’ Association of Maui (RAM)
If you have any questions or would like specific information on a region of Maui or a particular complex or property please contact The Hansen Ohana directly to discuss your individual real estate needs and goals. (808)280-2764 or 1-800-291-5535

Airlines give state tourism a lift

Hawaiian expands its interisland fleet and plans to add 20 flights and hire more workers

By Dave Segal
Article from: Star-Advertiser

Hawaiian Airlines will boost its fleet with the addition of three Boeing 717-200s, which will provide more flights between Honolulu and the neighbor islands.

Hawaiian Airlines, the dominant carrier in the interisland market, will add three Boeing 717-200s to its fleet later this year which will provide about 20 more flights per day between Honolulu and the neighbor islands.

The company said Thursday it expects to hire an additional 40 to 50 pilots, flight attendants and ground staff to support the increased operations.

“With our increasing service to Hawaii from Asia, demand for our interisland flights during peak hours of the day and during popular travel periods has never been higher,” Hawaiian CEO Mark Dunkerley said. “Adding these aircraft will give us the ability to serve more customers during these periods.”

Hawaiian, which carried 83 percent of all interisland passengers last year and provided 81 percent of the seats last month according to state data, said it expects to take delivery of the three leased aircraft in September, October and November. It said the increased service will begin in October. The airline said service will be expanded to Kahului, Lihue, Hilo and Kona during peak travel periods. The 717s seat up to 123 passengers each.

“The increased capacity will help to support the HTA’s goal to promote the Hawaiian Islands and encourage multi-island travel that will boost visitor arrivals and spending on the neighbor islands,” Hawaii Tourism Authority CEO Mike McCartney said.

In addition, Hawaiian said it has purchased its existing fleet of 15 leased 717s from Boeing Capital Corp. in a refinancing transaction that reduces its fleet costs over the long term. The airline also signed multiyear leases with Boeing Capital for the three additional 717s. Terms of the deals were not disclosed.

“Hawaiian’s decision to expand its fleet and move from operator to owner is a further vote for the world’s best 100-seat airliner by an experienced and valued customer,” said Jordan Weltman, Boeing Capital president for the Americas region.

The airline also has in its fleet 17 Boeing 767-300ERS and four Airbus A330-200s. Those planes are used for mainland and international flights. The 767s seat up to 264 passengers, and the A330s can carry 294 passengers.

STRETCHING ITS WINGS
Hawaiian Airlines commands a majority of the interisland market:
INTERISLAND PASSENGERS IN 2010
Hawaiian Airlines 83%
Go! 9%
Island Air 5%
Mokulele 1%
Japan Airlines 1%
Pacific Wings 0%
Trans Air 0%
Big Island Air 0%
Source: State Department of Transportation Airport Division

INTERISLAND SCHEDULED AIRLINE SEATS FOR JUNE:

Hawaiian Airlines 80.9%
Go! 8.5%
Island Air 7.7%
Mokulele 1.5%
Pacific Wings 1.4%
Source: OAG Aviation