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The Honolulu Advertiser
Posted on: Thursday, September 26, 2002

Hawaiian Airlines loses tour firm's Vegas route

By Kelly Yamanouchi
Advertiser Staff Writer

Tour operator Vacations-Hawaii, which flies up to 2,100 passengers a week to Las Vegas, will switch from Hawaiian Airlines to Tulsa, Okla.-based Omni Air International when its contract with Hawaiian expires in January.

Hawaiian Airlines said it hopes to make up for the lost business by starting new nonstop service to Las Vegas this winter. Hawaiian said the new service will have greater potential for profit than the current charter service.

John Adams, Hawaiian's chairman, CEO and president, said in a written statement yesterday that the airline plans to reallocate its resources from charter to scheduled operations.

Hawaiian said there is strong demand for service to Las Vegas, and the end of the relationship with Vacations-Hawaii is a byproduct of its growth strategy with a new fleet of airplanes. The new fleet is more economical to operate and allows Hawaiian to develop new routes "as far away as the East Coast," said spokesman Keoni Wagner.

Adams said Hawaiian opted to "provide greater flexibility and convenience for the growing population of former Hawai'i residents and other travelers using Las Vegas as a gateway to Hawai'i."

Hawaiian has not yet announced whether the new nonstop service will be daily or what month it will start. It will use new 252-seat 767-300 planes for the flights. Hawaiian currently flies daily to Las Vegas from Honolulu with a stop in Los Angeles using 304-seat DC-10s.

Hawaiian said its new 767-300 airplanes are less suited for charter service with high passenger volume. The airline is replacing its DC-10 fleet with 16 new Boeing 767-300s. Hawaiian Airlines has flown the charter route for Vacations-Hawaii since 1996, and its $30 million annual contract expires Jan. 31, Wagner said.

"We enjoyed a long, friendly relationship with Vacations-Hawaii and the decision to change was a friendly one," Wagner said.

Omni will be the exclusive carrier for Vacations-Hawaii, a subsidiary of Las-Vegas based Boyd Gaming Corp. Vacations-Hawaii spokesman Rob Stillwell said the reason for the change was that using Hawaiian's new 767s would be more expensive.

"We'd no longer be able to offer the schedule and prices that we offer under that arrangement. They're making a change, so we're making a change to offer the same level of service," Stillwell said.

Vacations-Hawaii flies seven flights each week from Honolulu to Las Vegas, with a capacity for more than 2,100 passengers a week. Flights are more than 90 percent full, Stillwell said, adding that the change from Hawaiian Airlines to Omni would be "a pretty seamless transition" and that prices will remain the same.

The Omni DC-10-30 aircraft have 355 seats, compared with 304 seats on Hawaiian's current charter aircraft. Stillwell said Vacations-Hawaii will be changing its pattern of flights. It will probably move to six flights a week instead of seven. He said Vacations-Hawaii currently flies six days a week.

The deal was finalized late last week, Stillwell said. Vacations-Hawaii has already begun selling the flights run by Omni Air International.

Omni, a charter airline for the U.S. government, sports teams and tour operators, already runs charter flights for Worry-Free Vacations from Hawai'i to Las Vegas. Omni's senior director of sales, Bill Zugenbuehler, said the partnership with Vacations-Hawaii was attractive because of the reputation of the tour company and the schedule of flights. He did not disclose how much the contract is worth.