US Airways to Try East Coast-Hawaii

Updated with closing stock price.

CHARLOTTE, N.C. -- Despite the economy, US Airways(LCC Quote) continues to grow its largest hub and try ambitious new destinations, including Honolulu starting Dec. 17.

US Airways' problem, both decades before and four years after a 2005 merger with America West, has been its lack of a world-class hub such as Atlanta, Chicago, or Newark. Instead, US Airways has Charlotte-Douglas, a great airport in a too-small city; Philadelphia International, a constricted airport in a major city, and Phoenix, which generally lacks high-yield markets.

Still, Mike Britman, the carrier's managing director of strategic planning and champion of the Honolulu route, dismissed a reporter's characterization of the route, saying, "We don't think this is a gutsy move at all."

In a harsh environment where industry domestic capacity will shrink 8% to 10% this year, Hawaii is "an outlier (which) has been doing very well out of Phoenix (and) is an environment where carriers can generate profitability," he said.

US Airways is planning nonstop service to Hawaii starting in December.

The Hawaii market has strengthened since two leading carriers, Aloha and ATA, shut down in the second quarter of 2008. Contrary to long-held industry belief, Hawaii is no longer a low-yield destination offered primarily to reward frequent flier passengers, Britman says, noting: "This is a frequent flier benefit we're happy to provide, but economics justify the flight."

Currently, only two East Coast cities, Atlanta and Newark, hubs for Delta(DAL Quote) and Continental(CAL Quote), have non-stop Hawaii flights. "It's difficult to get from the East Coast to Hawaii," Britman says. "We feel the demand is greater than the supply of seats." Even in Southeast markets where US Airways is strong, passengers may choose Delta to Hawaii.