Chris Sloan, Senior Partner and Managing Editor of Airways Magazine, conducted this interview with Avi Mannis, Hawaiian’s current Senior Vice President, Marketing, on Friday, February 2, 2018, in Honolulu. This interview has been edited for brevity and grammar.
Avi Mannis is the Senior Vice President – Marketing of Hawaiian Airlines, Inc., a position he has held since July 2014. As Senior Vice President – Marketing, Mannis is responsible for Hawaiian Airlines’ brand, product, advertising and promotions, direct marketing, and direct sales and service channels.
Previously, Mannis served as Vice President – Marketing from 2011 to 2014, and Vice President of Revenue Management and Schedule Planning from 2008 to 2011. Mannis joined Hawaiian Airlines in July 2007 as Senior Director of Transformation. Prior to Hawaiian Airlines, he worked at The Boston Consulting Group in New York City and Paris, France, and at Christie’s Auction House in New York City.
Mannis is a graduate of Brown University, earning a B.A. with honors in Old World Archaeology and Art. He went on to earn his M.B.A from the University of Pennsylvania’s Wharton School of Business.
Courtesy of Hawaiian Airlines.
AIRWAYS: What were the reasons Hawaiian chose to bypass the leading Premium Cabin seat manufacturers Zodiac and Rockwell Collins for the new lie-flat product? Was it the supply chain issues or was there more to this risky decision than that?
MANNIS: It was a riskier path to take than going with some of the more established seat manufacturers. There were two things: One was we were relatively late to the game in having lie flat seats. We knew if we were going to come late we wanted to bring in something that was of the next generation and really quite unique. The second was that most lie flat seats brought to market are designed principally for business travelers because that’s what the market looks like. We have a very different customer base because we primarily carry leisure people. Finding a lie flat seat that works for leisure was really quite difficult because most of those existing seats are designed to separate as much as possible from the person adjacent to you. They’re mostly for people traveling by themselves but 70 percent of our guests are traveling with someone else and want to share the experience. For us, it was largely about finding a seat platform that could be really well tailored to the needs of our guests.
Please elaborate on the real estate and seat design. Even though this is 2-2-2 configuration, the feedback is the hard product has a similar direct aisle access as 1-2-2.
You’re right, and I don’t really think we can take credit for it. Optimares did a terribly brilliant job with that design, but that captured our imagination as we are a leisure carrier, and density is still really important to what we do. We have many more couples traveling in our business class and 2-2-2 was a less daunting proposition for us than it would be for a more business-focused traveler where you get more single travelers. At the same time, when I’m traveling with my better half, I don’t like having to climb to the aisle from the window seat. The seats are designed with a slightly different configuration that uses the space very efficiently. It lets us create an access to the aisle. Having that ottoman was very important to us to create a really comfortable lounging position because while it’s great to be able to lie fully flat, on my flight’s lounging is actually the most important position. We really want to do is have a platform that created a wide range of ergonomic options for people that were really comfortable to lounge in and we found that Optimares had good solutions with the geometry of the seat.
Nearly 2 years after its roll-out, what’s the status of the retrofit?
We’re down now to our last retrofit so we’ll be done in about a month.
There’s been an epidemic of aircraft delivery delays and retrofits resulting from cabin suppliers. How has the Optimares experience been? Are you on the schedule you where you expected to be?
We had something that took us a little bit off schedule, but they were more issues in our network. We deliberately shifted the line down but for the most part from a supply chain standpoint, it has been positive. There are challenges with bringing a new seat to market and it was certainly a risky process. But on the other hand, there are great things about working with a startup to bring something new to the market. It was a collaborative process. We adapted a lot as we went through the design certification process and came out with something quite unique.
As in the case of Air New Zealand, does Hawaiian actually have any sort of patent or IP ownership on the seat design and has it been adopted by others?
Our design process is very bespoke to our needs. We don’t have any ownership over the Optimares design. They have other clients in the pipeline but I’m not sure I’m in a position to talk about who they are. We hope in the long term it’s a commercial success.
The irony is that Hawaiian boasts eye popping margins amongst the highest in the world yet operates against extreme competitive and cost headwinds in a high-cost place. What’s the secret to that, and the revenue premium you’re able to achieve?
In terms of the overall revenue premium, there are some DOT data points where we can get a measure of that. We have in the last couple of years generated a revenue premium over our competitors on the same route in the low double digits. In a business with margins like ours, that kind of premium makes a real difference. It’s a combination of having a great brand product really well tailored to the needs of our specific guests and having frontline staff who do an absolutely fantastic job. All of those things add up to guests being willing to pay more to fly with us for what are really emotionally significant trips generally in people’s eyes. So in that respect, we are doing really well in terms of revenue generation. We are seeing really significant improvement in the performance of our of our premium class product. Extra comfort has been a really terrific performer for us in that leisure travel niche. So we think we have a product dialed in really well for our core consumer and because we are so focused on our specific niche more effectively than many of our competitors who have broader networks.
Like other players in the industry, Hawaiian is moving away from embedded IFE’s with tablets and into streaming products for customers’ bringing their own devices (BYOD). In the A330, though the embedded seat product still exists after the retrofit, and oddly that’s still a superior experience in terms of the content offerings. What’s the thought process behind this?
Part of it was we were reconfiguring the front part of the cabin and we weren’t going to make a choice about all of the seats in the back of the cabin at that point, but the tablet model doesn’t really scale well to the back of the aircraft. Having in-flight entertainment on the markets on which we operate the A330, which are largely international long-haul markets, still is really a core part of the guest expectation. For the international market, we don’t see the same generation of people bringing their own devices, so having embedded IFE was still the right choice for that market.
As we look at the lie flat seats, there was sort of philosophical reasons why we might not want to have embedded IFE there in terms of obsolescence and making sure we had the best possible technology at all times. We looked at lots of different options with embedded IFE too, and one of the things we found was that it compromises openness and space in the cabin and compromises a number of positions in which you can lounge. And, so it was a technology decision, but it was also an ergonomics decision to create the best most flexible use of space in that seat. You can be sitting up during dinner and using the tablet arm to hold your tablet. When I reclined into sleep mode but not all the way, I had to take the tablet out and hold it a little closer to my face. We found over time that people have different ways of wanting to experience IFE and the tablet solution in a lie-flat seat where you have a different range of motion makes a really big difference.
The new A321neo’s forego any seatback embeds in favor of streaming to BYOD’s. What’s the philosophy there?
It’s basically coming from the same place. We spend a lot of time thinking how our guests use the aircraft and what we see on our flights to the west coast which is the mission of the 321 Neo. Many of our guests have their own devices loaded with their own content. Streaming has real weight advantages on the aircraft in terms of the technology.
Hawaiian is the only non-LCC U.S. mainline carrier that offers no inflight internet connectivity on any of its flights. Even on routes to Hawaii, your competition is adding this. Though you all are leisure based, do you expect to offer this eventually
You know I do, I think it’s been less critical for us because of the leisure focus, and frankly over time the satellite coverage over the Pacific has not lent itself to a really great connectivity experience, so it’s something we don’t want to invest in until we are sure we can deliver really great connectivity experience to our guests. I think even for leisure customers, it’s an expectation on aircraft that you’re not going to be disconnected from the world for a couple of hours. So, I think competitively it will be important that we have that product at some point. We spend alot of time right now trying to understand the needs of our specific guests; how we build a connectivity solution if there is one out there that’s really well-suited to the needs of our Hawaii focused leisure guests and that works well with our network which is heavily concentrated over the Pacific.
Hawaiian maintains its own lounges in the major Island home markets and offers access via partnerships in Asia. However, there is no lounge access anywhere on the mainland US. Your direct competitors offer this. What are Hawaiian’s plans in this regard?
It’s something that we look at periodically. It is generally less of an expectation unless you subscribe to a lounge product by one of the carriers to have lounge access, and we don’t necessarily have the scale, even in our big West Coast cities, to justify a lounge presence. Internationally, we use partner lounges because it is an expectation that comes with a premium cabin seat and in Honolulu, we have the scale to support a lounge product, but we are always making sure what is competitive with the expectations in each individual market.
You’ve had an unusual career trajectory from revenue management and scheduling to marketing, brand, and product. How has the helped you prepare for your current role?
It could’ve been a testament to how badly suited I was for revenue management. It was a terrific opportunity and I came to the airline at a time when they were going through a great deal of change in our network and had the opportunity to lead the revenue management network planning function through some of that change. Revenue Management is such a fantastic area.
You spend the time looking at the data and there is a willingness for people to choose Hawaiian Airlines over our competitors and over time I realized that a lot that was happening was not because we were so smart in revenue management, but I think we are and we do good work there. But, because we were delivering this really great experience. Moving to marketing gave me a great grounding in the commercial airline industry but also gave me this interest to go out in the more intangible aspects of brands that drive consumers to choose us. It’s great to be able to work on both sides of the spectrum.
Or is it just more fun sampling the Mai Tais and flunking out of math?
I can’t complain about the Mai Tais, it’s an important part of my job. There’s a great balance in my day between spending a lot of time looking at data. It’s a really diverse work day.
I certainly had no problems being served Mai Tais at 7:00 in the morning, they’re strong by the way. I don’t know what kind of math you’re doing with that.
After two it’s really hard to get up. The Mai Tais are a great example of how we approach products. We decided that we were going to serve the Mai Tai unlike anyone else’s. We spent a bunch of time to come up with something that was really the kind of Mai-Tai that we would drink here – not super overly sweet with a nice a nice bit of punch with great natural ingredients and something that we were really proud of and proud to serve. And, it didn’t taste like other airline Mai Tais.
You joined the airlines as Senior Director of Transformation. With Mark Dunkerley’s retirement and Peter Ingram’s ascension to CEO, can you elaborate on this journey and the next phase?
It’s been a great privilege to through part of this journey. I try not to speak for Mark but I think what he saw in the airline was an airline with fantastic people. And that was true 15 years ago and it’s true today. What they needed was a leadership team that would work in service of those frontline people to give them the tools to go out and do they do well every day. And I think that is the philosophy that will go beyond Mark’s tenure here. Something he has created and really taught the leadership team. That’s our job. We have the best people in the industry. As management every day, we need to make sure that they have the tools and resources and the support to take care of our guests. And if we do that I think that the business largely takes care of itself.
We asked Mark and Peter this question and now we put it to you? Hawaii is a boom market and the competition is gunning for you? United’s boosting capacity by 20 percent, Southwest is coming and entertaining the idea of inter-Island flying, ANA with A380s, and JetStar and AsiaX are confronting you in your prime gateways in Asia.. and that’s just for starters. In the past, airlines put some of their worst hard product and a mediocre soft product into the leisure-focused, low yield market of Hawaii? How do you intend to face the threat?
You made a really good observation about carriers for a long time put their worst product on leisure routes. It’s a real vindication of our belief in the potential of leisure travel that we’re seeing some of the competitive entries that we’re seeing today. I’ve been here for 10 years and this is my third wave of competitive capacity increase over time. And we’ve always come out stronger. We are more focused on this market and better tailor our solutions than anyone else. But it’s also really important that we continue to innovate. We have the A321neo coming online which is important for us. We do a lot of work to advance our practice of e-commerce and digital marketing and getting technology in the operation to make sure that what is a very competitive business and gather every source of advantage we can. It really is just a great service, knowing our customers as well as we possibly can.