The iPad Mini will be available as a personal entertainment device on Hawaiian Airlines Boeing 767 flights. Photo: Apple.
This iPad Mini deployment will allow Hawaiian Holdings, Inc. (NASDAQ:HA) to improve the customer experience on its older Boeing 767 widebodies. It could even become a profit center for the carrier, if many economy passengers choose to rent the iPads. At the same time, it represents yet another win for Apple Inc. (NASDAQ:AAPL) in the aviation sector, which is quickly becoming a major customer for iPads.
Freshening it up
The iPad Minis will be a complimentary perk for business-class customers on all of Hawaiian Holdings, Inc. (NASDAQ:HA)’s 767 flights. They will also be available for economy-class customers to rent for $15 to $17 on most of those flights, including all 767 flights between Hawaii and the continental United States. The iPad Minis will replace the dated portable “digEplayers” currently available on the same flights.
Easing the transition
For Hawaiian Holdings, Inc. (NASDAQ:HA) Airlines, the iPad rollout is a stop-gap measure. While the 767 has been the mainstay of Hawaiian’s widebody fleet for most of the past decade, the carrier is now transitioning its widebody fleet to the Airbus A330. Hawaiian’s 767 fleet is expected to drop from a peak of 18 aircraft in 2009 to just seven by the end of 2015 and will be more or less phased out by the end of the decade.
Unlike the Boeing 767s, Hawaiian Holdings, Inc. (NASDAQ:HA)’s new A330s come equipped with a personal audio/video on-demand system at every seat. As a result, there is no need to use iPads as portable entertainment devices on those aircraft. The A330 AVOD systems offer free music and a few complimentary videos, but the vast majority of content costs between $4.99 and $7.99.
Since most of Hawaiian’s widebody flights are at least five to six hours long, an attractive entertainment option represents a significant “ancillary revenue” opportunity. There’s nothing quite like having a screen in front of every passenger, begging to be used, as is the case on Hawaiian’s A330s. However, iPad Minis are also likely to see strong customer uptake — certainly more than “personal digEplayers.”
A growing force in aviation
From Apple Inc. (NASDAQ:AAPL)’s perspective, Hawaiian’s iPad Mini rollout is a relatively modest customer win. However, it’s part of a growing trend among airlines to integrate the iPad into their business plans.
For example, in 2011, United Continental Holdings Inc (NYSE:UAL) became one of the first airlines to move to a “paperless” flight deck by putting its flight manuals and charts on iPads. The company distributed iPads to all of its roughly 11,000 pilots. These iPads allowed pilots to do away with their heavy flight bags, which typically held 12,000 sheets of paper each! The reduced weight leads to significant fuel savings for United Continental Holdings Inc (NYSE:UAL) over the course of a year. Moreover, it makes it easier for pilots to access materials they need. AMR Corporation (OTCMKTS:AAMRQ) American Airlines has followed in United Continental Holdings Inc (NYSE:UAL)’s footsteps and recently completed the rollout of its own iPad-based electronic flight bag. Other carriers have been more interested in using iPads in customer-facing applications. Australia’s Qantas has already deployed iPads as in-flight entertainment devices, as Hawaiian is doing. Back in the U.S., Delta Air Lines, Inc. (NYSE:DAL) has deployed iPads for customer use throughout the concourses in its recently renovated terminal at LaGuardia Airport in New York.
Brave new world
Airlines, like many other businesses, are embracing the latest technology revolution and looking for ways to use it to their advantage. Hawaiian Airlines was an ideal candidate for using the iPad as an in-flight entertainment system, and though it isn’t likely to become a long-term iPad customer, the broader trend in the airline industry favors companies like Apple.
The iPad in particular seems poised to dominate the skies, despite scattered wins by Samsung and other vendors. The iPad’s good security and reliability helped it win FAA approval as a replacement for those paper flight manuals. And its premium feel and reasonable cost also make it desirable as an in-flight entertainment amenity. The symbiotic relationship between Apple and the airlines is likely to prove profitable for both in the long run.
The article The iPad Mini Flies Hawaiian Airlines originally appeared on Fool.com is written by Adam Levine-Weinberg.
Fool contributor Adam Levine-Weinberg owns shares of Apple and Hawaiian Holdings (NASDAQ:HA), is short shares of United Continental Holdings, and is long January 2015 $390 calls on Apple and October 2013 $6 calls on Hawaiian Holdings. The Motley Fool recommends and owns shares of Apple.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
