We have new information today regarding Southwest Hawaii flights likely being announced this week. Even before today’s information we had reason to believe that Southwest Hawaii flights would be announced now. Why? The company is, for the first time, the major corporate sponsor of the Hawaii Global Tourism Summit which began today in Honolulu. Southwest is widely expected to address the conference and make its announcement tomorrow, Wednesday, September 20. This is in fact largely what the summit has come to be about.
Beat of Hawaii (BOH):
1. Southwest Hawaii plans accelerated recently. As a result, the company had actually intended to announce Hawaii flights at the end of last month. That was delayed due to Hurricane Harvey.
2. SWA has a group dedicated to Hawaii service. That group, including senior Southwest executives, held meetings in Honolulu in March with State officials, including the governor and heads of tourism.
3. The “Southwest Effect.” So exactly what impact can we expect in terms of Hawaii airfares? A 2016 Northeastern University study based on 2010 data found that when Southwest Airlines enters a market, a whopping 24% drop in airfares can be anticipated.
4. Southwest’s appearance at and sponsorship of the summit is clearly indicative of their unwavering commitment to Hawaii flights. It also is the most likely possible venue, with the correct timing, to introduce flights to Hawaii starting in 2018.
5. Southwest Hawaii flights seem to be taking aim squarely at Alaska Airlines. Last month Southwest began increasing flights at California airports. That expansion in Alaska territory may also foretell which cities are most likely to launch Southwest Hawaii flights first. The cities on Southwest’s scope appear to be San Jose, Oakland, Sacramento, and San Diego. Also mentioned are Las Vegas. Phoenix and Los Angeles. Las Vegas is interesting inasmuch as Allegiant is terminating its flight from there to Honolulu.
6. Unless this is an enormous decoy for reasons unknown, you can expect this to be one of the most significant weeks ever for Hawaii travel.
7. Further rumored is that a Southwest aircraft may arrive at Honolulu International Airport in time for the announcement. We’ll be watching for that.
Previous news on Southwest Hawaii Flights
Earlier this year, Southwest Airlines CEO Gary Kelly addressed the subject of when will Southwest Hawaii flights commence.
“We’re deciding what our plans are for 2018 and Hawaii is important to us.” – Gary Kelly, SWA CEO.
While not specifically confirming or denying that flights will start in 2018, this spring’s comments confirm we can bank on Southwest Hawaii flights in the near future. The company is set to start delivery of their new Hawaii capable fleet later this year. More specifically, the first 737 Max 8 will start flying on October 1. The company plans to have 14 of the new aircraft flying before the end of 2017.
Additional hurdles were recently cleared prior to Southwest Hawaii flights being announced.
1. Southwest has made significant progress with ETOPS, the twin engine, over water certification required for Hawaii flights. We understand that Southwest recently obtained ETOPS certification for flights over the Gulf of Mexico. Before that approval, we were told by our Southwest pilot friends that flights had to hug the coastline.
2. Southwest’s reservation system was archaic and did not support Hawaii flights. The legacy system also did not allow for overnight flights, varying schedules by day of week, or bookings beyond six months. In a schedule update recently released, this was addressed. The next step is support for red-eye flights needed for Hawaii service, which is expected shortly.
Late last year, two additional issues were resolved. Pilots at Southwest Airlines settled their 4 year dispute and ratified their contract. That was important because the previous contract did not allow for the planes needed for flights to Hawaii. That agreement followed Southwest flight attendants ratifying their contract. The union contracts were two of the primary obstacles to entering Hawaii service.
Here’s what needs to happen next, before the first SWA planes land here.
1. Southwest will complete ETOPS preparation needed for trans-Pacific flights.
BOH: Flights can start in 2018 after in-service testing of new 737 Max 8 aircraft to confirm performance for Hawaii routes.
2. Industry speculation. Hawaiian Airlines‘ stock valuation is closely tied to the Hawaii entry of SWA. Credit Suisse and Deutsche Bank essentially concur with our points above in relation to the start of SWA flights to Hawaii. This issue has again been widely discussed this week.
BOH: Definitely no flights until 2018 at earliest.
3. SWA intentions are confirmed.
BOH: Southwest flights to Hawaii are a certainty and they won’t keep us waiting much longer. Perhaps not even one more day.
Are Hawaii Flights a Priority for Southwest?
BOH: Yes definitely.
Reasons Why Southwest Hawaii service didn’t happen sooner.
Pilot and flight attendant labor disputes continued to plague SWA for years. So did the reservation system.
Acquisition of AirTran was far more complicated and time consuming than originally thought.
Competition and discounting between west coast cities and Hawaii has remained strong on Hawaiian and Alaska. This was further complicated with Virgin America‘s entry into flights to Hawaii from both San Francisco and Los Angeles and then by their acquisition by Alaska. Opportunity for the higher airfares that typically attract a new player like Southwest were diminished, especially on Southwest’s target Bay Area and Southern California routes. Pricing stability has returned which is positive for Southwest’s plans.
Virgin America beat Southwest to Hawaii. This could not have come as a surprise to SWA, however, since Virgin publicly indicated their intentions years earlier.
Complications that occurred with ETOPS in relation to SWA Caribbean flights. ETOPS has proven to be more problematic for SWA, even in shorter over-water distances compared with Hawaii.