Brawling Hawaii competitors Southwest Airlines and Hawaiian Airlines hoped to end their lowest fares (mainland and interisland) last month. Well, guess what? That didn’t happen, and it won’t be happening anytime soon.
This is hurting both companies, but Hawaiian, far more so. For a company the size of Southwest, this is relatively small change. Southwest’s revenue for the 12 months that ended September 30 was $23 billion, whereas per Hawaiian Airlines’ latest financial reports, the company’s revenue is $2.40 billion annually. Thus, Southwest is ten times larger with appurtenant financial resources. Just to keep size in perspective, UAL’s revenue is $25 billion; American and Delta are each at $17 billion, with second Hawaii bellwether Alaska Airlines coming in at $9 billion.
What both Southwest and Hawaii share in common is that, for differing reasons, they are each struggling to return to profitability. Southwest has by no means recovered from an unprecedented late-December meltdown that shook the entire aviation industry and sent the company, its customers, and investors reeling.
On the other hand, Hawaiian faces issues that, in part, relate to Southwest’s strong presence in Hawaii. And perhaps not surprisingly, the $39 ($26 net of taxes) interisland airfares and $119 ($93 net of taxes) regular mainland fares are not helping.
Read: Flight Reviews: Hawaiian vs. Southwest Showdown
Also, international is a painful subject for Hawaiian, which isn’t the case for Southwest. Even Japan travel, which reopened international travel three months ago, is returning very slowly. Hawaiian hopes to be able to resume more foreign flying soon, but that remains to be seen in new and fast-changing global circumstances.
While not directly analogous, Hawaiian is somewhat like a Mom-and-Pop grocery store, while Southwest is more similar to Costco. Hawaiian is a fraction of the size and thus is arguably more vulnerable to various issues, including price increases, than the highly scaled and generally resource-rich Southwest. Costs include escalating employee costs, fuel, maintenance, and more. The single biggest expense is fuel, of course. And both airlines face unpredictability related to the economy and how it will impact Hawaii travel. Southwest is a behemoth of scale and resources, well prepared in many ways for the battle over Hawaii. Hawaiian, on the other hand, has a history of being part of Hawaii since 1929, exuding the culture of the islands generally and having strong Hawaii know-how.
Interisland flights are a source of anguish for Hawaiian Airlines.
The current price point for uber-important interisland flights will be $39 for the foreseeable future. It may rise and fall briefly, but that will be the deal, at least for now. The airlines get revenue of $26, after taxes, on a $39 airfare, which is only a small fraction of their cost to provide the service. Hawaiian says more than 20% of their revenue is from interisland flights. The winner here is Southwest.
Mainland flights where the two companies compete.
On flights from California cities, in particular, the competition remains fierce. Even before sales, the price point of $119 will continue, and there will be lower prices too. Remember that $119 only gets the airline 96 dollars, and the rest is taxes. You’ll find those fares intermittently (but more on than off) to all islands from cities including San Diego, Los Angeles, San Jose, and Oakland. Other cities have Hawaii airfare sales too, but that’s based on different competition and not part of this discussion.
Why are 20-minute interisland flights so bloody important?
For both airlines, interisland allows them to move passengers back and forth within Hawaii nimbly. At Southwest, which has no interline agreements with other carriers, it is the only way to get people to where they need to be in order to connect to Southwest Hawaii flights to the mainland. That’s under normal circumstances. It also protects them from unexpected events, like delayed or canceled flights, wherein they can get passengers to the islands mainland flights are operating.
Interisland is at the very core of Hawaiian’s business too. Just try searching for Hawaii flights, and you’ll find that their best mainland prices are often via connections interisland that dovetail with their mainland flights. Hawaiian has no means to distribute passengers on the US Mainland, so moving them within Hawaii instead is essential to their operations and network planning.
Can international resuming take the pressure off Hawaiian’s problems?
Hawaiian hopes to return to something akin to their regular pre-Covid international schedule by summer. At least for some markets. Those could include Japan, where Hawaii is a perennial favorite, and Australia, which will be in the middle of winter just in time for Hawaii’s summer.
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We only fly Hawaiian or Delta to the islands.
Because of the way SW boards, we would never consider that type of chaos and prefer to have assigned seats. Also, we miss Aloha, which was a great airline to fly with.
By the way, it would seem SWA kept their introductory fares in place because they didn’t get the ridership they expected. The so called SWA effect is built on them entering a market with lots of flights at a lower fare, then when established, they raise their fares and discard the routes that don’t work. They are toying with Hawaii to see what they can get out of the market. Big difference between them and a company that has its roots here. It not just the authentic Hawaii experience you get on Hawaiian, it’s the close to 100 years they have been serving the State and the experience that delivers.
Here is a great example…Honolulu to Kona is about 167 miles, let’s go to SWA’s hub, Dallas- Love Field (DAL) and one of SWA’s original routes, DAL – AUS (Austin), about 164 miles so a very close comparison and should cost similarly assuming fuel is the same price (probably more expensive on Hawaii). Does SWA charge $39 for the DAL- AUS flight? No, they currently charge $224 for their lowest fares, so that is their price point when they aren’t trying to put someone out of business, and that is what it will become if they push Hawaiian out. Fortunately Hawaiian is committed. SWA did this for a decade in Newark, NJ until they gave up.
Just checked Islip to BWI….$219-$399 one way…the 399 is a business select, still a coach seat! As you said they are using predatory pricing to insert themselves over here. The fact that their “introductory “ fares are being left longer then what they said is telling. I don’t have a clue about the law but I wonder if there is something about predatory pricing that is illegal? Go Airlines broke the law over here too and paid royally for it.
Hawaiian has the best on time performance of any US carrier for 2022 and was ranked 12th in the world for safest airlines. Southwest was ranked 6th, after all major carriers, just ahead of the Spirit and Frontier airlines, for on time performance and is not ranked at all in the top 20 of the safest carriers in the world. Hawaiian puts far more people to work in the islands. Southwest is competing inter-island at a loss, it is an attempt by a bigger company to put a smaller company out of business by forcing both to lose money, Southwest with its deeper pockets can lose money longer. If it puts HAL out of business Southwest will raise prices. It is very predatory unfortunately.
You said it better then I Jay, well done. The SWA folks on here seem to think it’s ok to make up “alternative stats”. Believe it or not I’m not as anti SWA on here as I may sound. They are a business so I understand that. I just get offended by loud newcomers trying to get established in Hawaii by attacking local institutions to try and get ahead.
The money spent on a $39 dollar inter island ticket on Hawaiian at least goes to Hawaii. On SWA it leaves the State. Fly local buy local when you can.
Doesn’t mater that SWA may be cheaper. They still will never match Hawaiian Air. Althought HA is a bit more expensive, they are still the only airline that gives you a meal and usually Rum Punch (Yum) on the flight there (from Phoenix) and a meal and wine on the way back. That is, if they still do. No matter what, I trust HA and I will always fly them as long as I can afford it. Seats on SWA are cramped. Hawaiian Air is a bit more comfortable.
Support local and the 6k+ local employees, I’ll always go for Hawaiian. Something special about stepping on the plane coming back from the mainland and seeing, hearing and experiencing local flight attendants.
We live on the mainland and fly to OGG 2 – 3 times a year. The 5 hour experience is much better on Hawaiian than Southwest, plus when flying with families, the reserved seating is the way to go. Southwest now only flies direct on Saturdays from SMF (Sacramento) to OGG which limits our options. With that said, the competition keeps the price down which is good for us. We like Hawaiian very much and we fly exclusively with them now.
I love Hawaiian airlines. I always upgrade to their comfort seats. I feel it is well worth it for the long flight from Phoenix. The staff is always great. I like that they give you a small meal and a snack and a drink.
Southwest is fine for a short flight. But, their seats on small and make me feel claustrophobic. I’m just average size lady. The staff on southwest are nice.
Southwest, sorry Southwest is nothing but a parasite to the Hawaiian market. Support local. I pray that they leave Hawaii and take with them their non-Aloha culture.
I truly hope HAL remains strong, but we could use some competition in the high cost of Hawaii-Mainland airfares.
Remember aloha airlines,now they are on the same situation,it’s like it came back to haunt them.
On time, don’t think so. All last week and today HA from PDX to HNL has been hours late. There’s a reason for the motto, Hawaiian Always Late. HAL for the past 50 years.
Full disclosure here since I’m posting so much. I am retired and have no personal skin in the game. However I’ve been in Hawaii a long time and care very much about the State and the people that live here
Hawaiian makes you spend every penny of your credit as in if a flight is 200.00 and you have 300.00 credit, you lose 100.00. Southwest, and Delta doesn’t do that to you. And Hawaiian preaches Aloha? I don’t call that Aloha, I call that a rip off. I spent every Hawaiian dollars in credit. Im spending it on Southwest going forward
SWA came to Hawaii in a very predatory fashion as is their business model. The inter island operation is dispatched from the mainland and flown by crews here for a day that often don’t know much about the islands. HA has a dedicated inter island fleet with full time inter island crews and full maint. support as well as crews in reserve, all people that know and understand Hawaii and it’s unique weather patterns. When you buy a ticket on HA the money supports Hawaii. SWA the money goes to Texas and is used to, as they boast, be predatory throughout their route system. HA knows Hawaii which is particularly important when the weather is bad. HA’s experience here does provide many benefits big and small.
By you logic, buy a ticket on UA the $$$, goes to Chicago, DL=ATL, AS=SEA, AA=Ft.Worth, none those carriers are headquartered in HI. They all serve HI and carry thousands of passengers daily. I would venture to guess that the other airlines I have mentioned have a much better handle on weather predictions and weather. All carriers fly in 4 seasons types of weather, and some of them fly to 6 continents. HA just has one or 2 4 season destinations, JFK & BOS. The Hawaiian locals we spoke to are thrilled with the inter-island competition, the easy way you can use your credits on SWA, and 2 bags free.So you’ll need to come up with a better argument about competition.
I’ve also said the competition is a good thing. It’s how SWA has gone about it that grates..Your missing my point that Hawaiian well represents what is special about the State. Comparing it just another location speaks volumes about the difference between those that hold Hawaii as a special place and those that see it differently and just another vacation spot, the cheaper the better.
Also, their inter island operation really is lacking. They have proven they don’t have the same operational expertise as Hawaiians dedicated full time Inter Island operation. They are doing it as cheaply as they can and have no where near the investment in the operation that HA has or Aloha had.
The weather is 10 times worse on the mainland. SWA flies to many different locations in South America with similar weather environments. So they are very familiar with it, and it’s nothing different from what they are already used to. SWA is doing locals a favor on inter-island and mainland flying. Pre-SWA tickets between OGG-HNL for example, were $100+ one way. Now it’s a steady $39, and regardless if you love Hawaiian or not, you’re going to take the $39 ticket. Not to mention, only the upper middle class can afford those ticket prices with Hawaiian. Many of the locals will be able to leave the islands more often, and some will do so for the first time on SWA.
You missed my point about operational expertise. I’m not saying they can’t do it, they just are not as efficient. The recent Mauna Loa eruption resulted in SWA canceling all Hawaii Island flights, correct thing for them to do as their mainland dispatchers didn’t know what was going on. Hawaiian, with their experience was able to operate. They had the experience to make the call knowing it presented no hazard. Experienced inter island pilots know the finer points of finding a smooth ride when someone new doesn’t. Etc Etc. To your other point, Hawaiian never charged as much as SWA does out of Islip NY. SWA doesn’t have competition there. They are not the white knight, they are charging predatory fares here to try and break into the market
Also MD your comment that SWA flies in worse weather on the mainland would indicate some lack of perspective about Hawaii. Hawaii weather is beautiful most of the time. The experienced crews know not to be complacent and know how quickly a heavy downpour and strong winds can present a potential hazard. They also know when to expect the unexpected. That’s when HA’s experience really pays off.
I do not commiserate with Hawaiian Air! I remember an interisland from Maui to Honolulu that cost over $200 after they eliminated Aloha Airlnes! I welcomed SWA & their rates especially interisland.
Funny a few years ago The Beat of Hawaii was Southwest biggest Fan and just couldn’t wait for Southwest to enter the Hawaii so they could Bring it’s legendary Low Fares not only to flights to the Mainland but more importantly to Inter Island market. Let’s not forget since the failure of Both Aloha Airlines and GO! Hawaiian Airlines AKA the mom and pop airline had no problem raising tickets prices 300% almost overnight. As the airline industry began instituting Fees for everything and charging to Checked Luggage. During these time when it was just M&P flying inter island 9 out of 10 times you could buy a cheaper round trip to California or Japan than you could to HNL-LIH,KOA,OGG,ITO.
Southwest isn’t Bad guy.
Hawaiian had a monopoly for years. Flying to Honolulu for medical reasons was very expensive and no discounts. They are reaping what they sowed.
Hawaiian plane maintenance remains an issue.
Southwest has more comfort just wished they had movies
SW has free movies if you download the app. Even on inter island land flights. Keeps playing even while waiting to depart or disembark.
I would actually compare Southwest more to Walmart. Crowded, lower quality, budget-focused. While I have mixed feelings about Costco in terms of the effect they have had on small businesses on Kauai, they do have high quality products are great prices, and great customer service most of the time. They also are known to take care of their staff very well compared to other big box stores.
As far I’m concerned, Hawaiian is the only choice when it comes to flying to or from the mainland and interisland. There is a reason Hawaiian has never suffered a hull loss or had any major incidents in their long history. They know what they are doing and perform proper maintenance on all of their aircraft. Something southwest doesn’t do. When you fly southwest you are more like cattle than you are a human passenger. When flying Hawaiian, you are greeted with the warm aloha spirit by the entire HA flight crews. You can’t put a price on the better customer service and comfort Hawaiian provides
That’s weird that HAL maintenance is so good yet diverts are at an all-time high for mechanical….must be Airbus’ fault? I am not aware of the same divert rate for mechanical by other Airbus fleets…..only HAL.
This is entirely false and very typical of the SWA approach to the market. HA has the best on time record of any U.S. carrier for the 21st century. There is a very strong distaste here for people from elsewhere that come here and try to take all they can for themselves with little regard for the impact on the people that live here. The roots of that culture goes back to the Missionary days and now has manifested itself. Making up something on the internet to try and make a point is a common practice these days.
On time, don’t think so. All last week and today HA from PDX to HNL has been hours late. There’s a reason for the motto, Hawaiian Always Late. HAL for the past 50 years.
It is unbelieveable how you continuily criticize Southwest for creating a competetive environment in the local Hawai’i marketplace. For years (ever since the demise of Aloha Air) the people that call Hawai’i home, have been monopolized and ripped off by uncontrolled airfare. I would think that at a minimum the kama’aina would embrace the competetiveness and support Southwest.
Why would anyone in their right mind support an airline that treats new hire employees like complete garbage and flies uncomfortable packed airplanes?
Southwest actually treats their employees fairly well for a major airline. Better than Hawaiian in many cases.
I do hope the SWA pilots are able to secure a contract as good as the HA pilots did, I suspect they will. However an issue with SWA is a big part of their business model is quick turns, Witness DEN and BWI in January when they couldn’t keep employees willing to work in the snow at the pace SWA demanded. Rushing ground crew in bad weather is a recipe for disaster.
I fly both airlines almost equally.
Hawaiian has become more accommodating letting you get on an earlier flights if needed without charging the 50 bucks since SW came around.
Pretty sure SW seat legroom is better.
I have the 2 year free companion pass on SW, so it’s half the price if my wife flies too.
SW honors miles availability on all days that end with the letter y.
You choose.
Hawaiian seat pitch (legroom) 30-31″
SW 32-33″
Seat Guru post
I dont think that Southwest is trying to create a competitive market. Their size alone and their willingness to discount airfare shows that they are trying to put Hawaiian out of business.
Actually Andy, despite all my other posts, I think SWA is simply trying to capture a piece of the inter island market. They have about half the flights HA does is my understanding. The competition is actually good. HA did in fact charge as much as SWA does on many of their less competitive markets. Although look at their Islip to BWI fares. Similar to Big Island flights in distance but SWA charges $220-399 OW. HA was never that bad. SWA is not the white knight, they are a business that uses aggressive tactics to grow, which is their right. But they are in the business of maximizing their profits like anyone else.
You are absolutely correct. I do not feel bad for the “ Mom and Pop”.
I have a different take SEAN. SWA isn’t going anywhere. Enjoy the fare wars but buy a ticket on Hawaiian for the same price. You support the Hawaii economy when you fly Hawaiian. You also support the thousands of employees that live here and their families. Those family members are the Teachers, Fire Fighters, Small Business Operators, Nurses, Doctors pretty much any occupation you can name. They are the fabric of Hawaii.
All I can say is that Aloha Airlines’ demise was and still is a tragedy.
That was the ideal situation with two locally based carriers dedicated to Hawaii. Aloha was a great company. Sadly, Mid Pacific, Discovery and finally Go Airlines kept chipping away at them. HA expanded Internationally and built a stronger base to survive while Aloha didn’t and only had a small presence to the West Coast. HA was able to survive the inter island fare wars as they were less dependent on that market and created an airline with a great reputation and nicely diversified route structure serving Hawaii.