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Apple Inc. (AAPL), Hawaiian Holdings, Inc. (HA): Freshening It Up

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Apple Inc. (NASDAQ:AAPL)‘s iPad Mini is about to start racking up some serious frequent flier miles on Hawaiian Holdings, Inc. (NASDAQ:HA). On Thursday afternoon, Hawaiian Holdings, Inc. (NASDAQ:HA) announced that it will begin offering iPad Minis to customers on its The Boeing Company (NYSE:BA)767 flights on Sept. 1. The devices will be specially configured to serve as personal entertainment devices, offering a variety of games and more than 100 hours of TV shows and movies.

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.”

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