Hawaii Airfare Battle Heats Up As Southwest Moves In Again

Southwest Airlines is once again trying to shake up Hawaii’s airfare market, launching a new package of discounts and free bag perks designed to put pressure on Hawaiian Airlines just as it navigates final integration with Alaska. It’s called Ohana Rewards.

While the deepest savings are aimed squarely at Hawaii residents, the ripple effects are broader, with Southwest signaling its desire for a larger share of interisland and connecting traffic.

The question now is whether this latest move will reignite competition or fall flat with visitors who have long seen Southwest as secondary to Hawaiian when it comes to traveling the islands.

What Southwest is offering.

The centerpiece of Ohana Rewards is a set of quarterly promotion codes that give interisland travelers discounted fares. Rapid Rewards members with a Hawaii address receive four codes per year that take ten percent off a paid fare or up to twenty-five percent off a mileage redemption.

During an early travel window from October to March, the paid fare discount increases to twenty percent, aligning with peak holiday and spring demand.

The promo also confirms that Rapid Rewards members residing in Hawaii will continue to receive free checked bags on interisland flights. The first and second standard bags are included at no cost when the member’s number is in the reservation. That benefit does not apply on partner carriers, and normal limits still apply, but it sets Southwest apart at a time when airlines are adding fees wherever they can.

These moves are most generous to Hawaii residents, yet they still shape the broader market. If Southwest’s discounts and bag policy succeed in pulling more local travelers into its system, Hawaiian/Alaska may feel pressure to respond, and that could keep fares in check for everyone flying the islands.

Why the timing matters in relation to Hawaiian/Alaska.

Southwest entered Hawaii in 2019 with the promise of lower fares and no bag fees. At first, many visitors and residents alike embraced the competition, but the airline’s interisland schedule never matched Hawaiian’s depth, and the excitement has decidedly cooled as Southwest continued to reduce Hawaii routes and frequencies. Now, by doubling down with targeted perks, Southwest seems to be trying again to claim relevance in a market that has been historically hard to crack.

The timing is not accidental. Hawaiian’s loyalty program has been dismantled and folded into Alaska’s Atmos Rewards, leaving many longtime HawaiianMiles members feeling shortchanged. That creates an opportunity for Southwest to woo frustrated travelers, especially those who relied on interisland award redemptions in the past. Pairing free bags with discounts is meant to make the proposition simple: less hassle, more value.

For visitors already facing higher hotel rates, new fees, and reservation systems at popular attractions, the idea of an airline offering perks instead of penalties could stand out. Still, the catch that only locals get the deepest fare discounts may limit how much visitors feel the benefit directly. On the other hand, interisland sales sparked by Southwest are again possible. Alaska has not always matched those fares, which will be another interesting aspect we will watch.

The competitive backdrop of Southwest in Hawaii.

Hawaiian, now Alaska, remains the heavyweight in the interisland market, operating far more flights per day with aircraft based in Hawaii and tailored to these short hops. For many travelers, especially those on tight schedules, Hawaiian’s frequency is one deciding factor.

Price still matters, and Southwest is aiming to undercut where it can. The twist is that Hawaiian has already answered the resident play through Huakai by Hawaiian, which gives members one free checked bag on neighbor island flights and a quarterly interisland discount. Credit cardholders can see a larger percentage off on that quarterly booking.

That means Alaska is not deciding whether to match at all, but instead it is deciding how far to go.

Southwest’s current Hawaii-resident offer centers on two free standard checked bags interisland and four discount codes per year, with a higher paid-fare discount in the early window and up to twenty-five percent off on awards.

Hawaiian’s Huakai counters with one free checked bag plus quarterly percent-off deals that scale higher with the Hawaiian Airlines Mastercard. The battleground becomes generosity and simplicity rather than presence alone

With the airfare battle prepared for heating up again, travelers should gain from renewed competition. Whether Southwest can pry long-standing loyalty away from Hawaiian will hinge on schedule fit and day-of-travel reliability as much as on percent-off details.

Hawaii community connection or marketing gloss.

Part of Southwest’s strategy is not just about fares but about planting deeper roots in the islands. The airline has highlighted local leadership, including its Maui station manager, who returned home after years working for Southwest on the mainland.

The promo also showcases sponsorships and tie-ins across the state, from Sunset on the Beach outdoor movie nights on Queens Beach in Waikiki to the Waikiki Hula Show, the Kauai Perfect Pairings food and wine fundraiser benefiting Big Brothers Big Sisters, and the Maui Invitational basketball tournament with Kamaaina tickets, a community service day, and youth clinics.

For visitors, these sponsorships may look like window dressing, but they underline Southwest’s determination to be seen as more than a mainland carrier flying in. Hawaiian’s cultural association with the islands has long been a strength, and Southwest is clearly trying to chip away at that perception by pointing to its own investment in local life.

Looking ahead in island competition.

The coming year could be pivotal. If Southwest can use discounts, free bags, and other yet-to-be-revealed perks to capture more share of both mainland and interisland traffic, Hawaiian and Alaska will face new pressure to defend their turf. If not, this latest effort will join earlier attempts that stirred attention but failed to permanently reshape the market in Southwest’s favor.

There are clear challenges for Southwest. Its schedule is still far thinner than Hawaiian’s, and visitors often prioritize timing over price. Reliability and frequency are where Hawaiian has the edge. Southwest is betting that savings, bag perks, and a no-fee identity can outweigh those big gaps.

For travelers, the result is a return to a more competitive market than Hawaii has seen for some time. The airfare battle that many thought had cooled is heating up once more, and the benefits are showing up in the form of cheaper fares and fewer fees.

Final thoughts on SW moves.

Southwest’s latest move may be designed for residents, but the implications stretch far wider. Visitors could see ripple effects in lower fares, or at the very least, more pressure on Hawaiian to hold the line on some pricing. At a time when Hawaii vacations are steadily more expensive, any sign of relief is welcome by all.

Will these discounts and free bags sway you to try Southwest for an interisland flight, or do you still see Hawaiian as the natural choice? We would like to hear your thoughts as this airfare battle plays out again in the skies over Hawaii.