In the battle of Hawaii flights, things continue to go downhill. Both in terms of pricing and profitability. How long can it go on? We don’t know for sure, but we have some fascinating insights to share.
1. Analysis of a $39 airfare.
When you look at the current price point for $39 interisland fares, did you know that only $26 goes to the airline? The remaining $12+ is a combination of taxes and fees in which they do not participate. But the $26 is before the advertising cost.
2. Google ad cost.
We were in Google search, shopping for flights to bring you more airline reviews when we stumbled onto this competing pair of Hawaiian And Southwest Google Ads. By our estimation, the carriers pay anywhere from $2-15 for each click on one of these ads. That’s a huge percentage of their $26 part of a $39 airfare.
3. Aggressive expansion hasn’t benefited Southwest yet.
As one investment analyst said this week, “Southwest is bleeding cash in the interisland market. Southwest Airlines will probably rein in its interisland ambitions eventually, but it might not be soon.” In terms of blood, Southwest has much more they can afford to lose than Hawaiian.
4. Southwest Hawaii flights adjusted by rapidly adding and deleting flights.
First, we announced in July that Southwest had cut 10 routes. Then we reported that they had nearly doubled their daily interisland flights from 38 to 60. After that, Southwest canned the previous plan and re-added 4 mainland routes previously deleted.
5. Mainland Hawaii routes seem to be working for both airlines, but not interisland.
We recently paid $188.50 for our Southwest flight from Hawaii to San Jose. And we’re paying about the same for a Hawaiian Air flight next week. At those prices, Southwest and Hawaiian didn’t lose money. On the other hand, we have been and will be flying around for $39 on both airlines, and that isn’t sustainable, as we’ve already said.
6. Island hopping has never been easier or cheaper.
Even at $39, there appears to be inadequate demand to fill flights, further exacerbating the financial loss. If you’re traveling to Hawaii this fall, this is the best time ever to consider adding another island to your itinerary. Flights are readily available and the prices can’t be beaten.