As of January 25, 2018. With Southwest Hawaii flights scheduled to start in late 2018, here today’s latest update:
And the announcement please…. We expect SWA to announce the specifics of their Hawaii flights shortly, perhaps as early as February 15! There was a further hint at today’s Q4 results call. See that below.
1. The next known opportunity for a Hawaii announcement is Southwest’s upcoming schedule release. That was to have taken place on February 8. It has been rescheduled to February 15 instead. That date change could be telltale and might mean that Southwest thinks they will be ready to announce by then. It is a date we have calendared for sure.
2. With Southwest Hawaii flights being so important, they may instead turn Hawaii into an entirely separate event.
3. Today’s investor call came with anticipation of more information on Hawaii flights. There was, however, no further indication of when flight schedules would be revealed. There was news though, that flights will begin later this year:
“We are pleased with the progress made thus far to obtain authorization from the Federal Aviation Administration for Extended Operations (ETOPS) to operate between the mainland and the Hawaiian Islands later this year…. Our goal has been from the outset to be flying by the end of the year…. Achieving that goal is not totally within our control. In terms of the work that we do control, we are right on target.” — Gary Kelly, SWA CEO (1/25/18)
Of interest, too, is that Southwest announced that they will be flying (not necessarily to Hawaii) from Paine Field in Everett, Washington. It would not be out of the question for SWA to consider Paine as another future jumping off point to the islands. Competition, however, from the Pacific Northwest in general, is fierce, with Hawaiian and Delta vying for Hawaii traffic with area bellwether Alaska Airlines.
Which cities will Southwest Hawaii flights serve? Those are likely to include Oakland, Los Angeles, San Jose, San Diego, Las Vegas, and Phoenix. Service on the first of these routes could begin anytime from late 2018 through early 2019. The schedule seems largely dependent on 1) Final government approval including ETOPS certification plus other logistics, and 2) the best marketing opportunities for introduction of Hawaii flights. In terms of marketing, starting flights in time for December high season would be desirable.
We are also still expecting to see Hawaii test flights very soon.
Aircraft. Flights are still set to start on existing 737-800 aircraft, as are being used by other carriers on flights to Hawaii. They will then transition to their new 737 MAX 8 and perhaps 737 MAX 7. The latter brings cities like Denver and beyond into range.
Inter-island flights on radar. Connecting flights from outer islands are a likely start for inter-island. For example, routes such as Oakland/Honolulu/Lihue/Oakland. That could mean one-stop to some islands and the opportunity for some inter-island only service as a teaser if nothing else. See more on inter-island flights below.
Overnight flights. Southwest has indicated that there will be no red-eye flights. Those may be added later. See more on overnight flights below.
Southwest service offerings. Southwest’s unique service paradigm will remain unchanged according to CEO Gary Kelly. They include:
1. Two free checked bags.
2. No seat assignments. There will still be an early boarding option for $15, which should prove to be extremely popular on flights to Hawaii.
3. No meals for sale. Only drinks and snacks as is customary for the airline.
4. No charger ports. You’ll need to bring a charged battery and perhaps a charger pack. We use the Anker ones, which have been the best performing and most reliable.
5. In-flight entertainment. It will be available on your own devices only. Fee based satellite WiFi may be offered either at launch or subsequently.
Southwest Hawaii inter-island Service
CEO Gary Kelly said recently: “Step one, of course, is getting from California to Hawaii.” Regarding inter-island flights, it “has been down our priority list, but we will have serious consideration of that.” While they may or may not start with these, Kelly stated that this is something that the company will continue to evaluate.
Beat of Hawaii expects some form of SWA Hawaii inter-island flights to happen, although no one can say just when and how it may work. As we’ve indicated, inter-island may well start as connecting flights between islands then to/from the mainland.
The fact is, short hops in the just over 100 mile range, are routine for SWA. There is nothing that prevents or regulates SWA’s ability to fly inter-island and all indications are that the state of Hawaii will in fact encourage it. That’s especially true with the total lack of inter-island competition following the recent demise of Island Air.
SWA Hawaii overnight/red-eye flights
Kelly had stated that while they may offer overnight flights in the future, “we don’t really desire to fly red-eyes right now.” “For our style of operation, it would complicate things.
Overnight service will definitely come to their Hawaii flights in the future, once they have more experience here. That should occur sooner than later out of logistical necessity.
Previous Hawaii announcement
The company announced Hawaii flights in October 2017 via Twitter, stating that tickets would be for sale in the upcoming year, with flight start dates and routes still to be announced. Los Angeles Times had stated (based on that service will be to Honolulu, Kona and Kauai. Undoubtedly Maui will be part of the plan.
“On average, our fares will be lower than theirs or bring down the market price. That’s called the ‘Southwest Effect'” — Andrew Watterson, SWA.
The “Southwest Effect”
So exactly what impact can we expect to see in terms of Hawaii airfares once SWA is a reality? A 2016 Northeastern University study based on 2010 data found that when they enter a market, a whopping 24% drop in airfares can be anticipated.
Late in 2016, two additional issues were resolved. Pilots at SWA 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. It was followed by the company flight attendants ratifying their contract. The union contracts were two of the primary obstacles to entering Hawaii service.
2017 events leading up to recent announcements
1. Southwest Hawaii plans rapidly accelerated in 2017. As a result, we learned the company had intended to announce Hawaii flights in August 2017. That was apparently delayed due to Hurricane Harvey.
2. SWA has had a group dedicated to Hawaii service. That group, including senior company executives, held meetings in Honolulu in March 2017 with state officials, including the governor, heads of tourism, and other stakeholders.
3. SWA’s appearance at and sponsorship of a Hawaii tourism conference in September 2017 was clearly indicative of their Hawaii flight intentions.
4. The airline’s reservation system was archaic and previously 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. That was corrected in 2017.
What Delayed Southwest Hawaii Flights.
Pilot and flight attendant labor disputes continued to plague SWA for years. So did the reservation system issues.
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. Opportunities for the higher airfares that typically attract a new player like SWA were diminished, especially on the company’s target Bay Area and Southern California routes. Pricing stability has returned which is positive for Southwest’s plans.
Virgin America beat SWA 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 certification. ETOPS has proven to be more problematic for SWA, even in shorter over-water distances compared with Hawaii.