Watch Hawaii Airfares Climb As Southwest + Hawaiian Learn Co-Existence

Hawaiian Vs. Southwest = Battle Of Mom-And-Pop Vs. Costco

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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44 thoughts on “Hawaiian Vs. Southwest = Battle Of Mom-And-Pop Vs. Costco”

  1. 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.

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  2. 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.

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    1. 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.

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      1. 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.

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  3. 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.

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    1. 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.

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  4. 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.

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  5. 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.

    8
  6. 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.

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  7. 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.

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  8. 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.

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