This week, Hawaii newcomer Southwest Airlines made a big announcement, the result of which will be fares below the current sale level of $29 on interisland flights. And that could have a boomerang effect on lowering many mainland fares while Hawaii simultaneously wrestles with managing increased tourism and exorbitant hotel costs. But back to airfares. Does anyone see $19 on interisland? We do, and here’s why.
This news comes at a time when Hawaii is experiencing both unprecedented domestic travel and never-before-seen competition between bellwether Hawaiian Airlines and Southwest Airlines. The announcement came at the very same moment as last week’s short-lived $29 Hawaii airfare sale.
Southwest interisland service is about to double.
The number of SWA interisland flights is currently in the 30s each day, but within the next two months, that’ll be at least 60 flights daily.
Hawaii is so important to Southwest that this week their new CEO, Bob Jordan, and others ventured nearly 4,000 miles from the company’s home base in Texas to attend a business meeting on Kauai. The event was a lunch meeting of Chamber of Commerce members. It was Jordan’s first time here.
While Southwest said its reasoning for this visit was solely to develop a relationship with Kauai and Hawaii, the event was also used as a platform to announce that the company plans to nearly double interisland flights starting very soon.
Southwest spent a decade planning its arrival in Hawaii, and it’s made a big splash, some well-received and some less so. But, as Jordan pointed out, they have a massive base of California customers, and what those customers want are flights to Hawaii.
Some have complained that Southwest attracts low-spending tourists, which many believe cannot support the needs of the state going forward. Hawaii seeks to be a premium travel destination rather than a discount one.
The low fare point has been $29 and looks to go some better.
As far as additional flights are concerned, long-awaited ones on the nonstop Maui-to-Kauai route are coming. Those have been particularly premium on Hawaiian Airlines, which has been the only carrier offering that route. Even with the anticipated arrival of the Southwest flights on the route, prices have dropped, and we’ve been able to get tickets for 1/2 of what they were previously. Call that the Southwest effect.
The airline will also add more flights between Honolulu and Maui, Honolulu and Kona, and Honolulu and Kauai.
The reason prices look to trend lower on all routes on which Hawaiian and Southwest compete.
Hawaiian Airlines is very aware of Southwest and its current and potential future impact on Hawaii. Hawaii is obviously all that Hawaiian does, and there are no stops they won’t pull out to affect their business goals. Whatever that price needs to be, it will be. The latest development will impact every route where the two companies compete, both to and from Hawaii and within the state.
Hawaii delays exacerbated by how Southwest routes its flights.
On Saturday, Southwest was experiencing delays on 26% of their flights at Honolulu (Hawaiian was at 11%) and on 34% of their flights at Maui (Hawaiian was at 18%). Because Southwest doesn’t have a fleet of planes based in Hawaii, they rely on aircraft serving their mainland flights for interisland service. We just wrote about that in much more detail in Southwest Hawaii Business Model Headwinds Amid Industry Woes.
New Southwest CEO took over at a most tumultuous time.
Bob Jordan has been with Southwest since 1988. He joined the company as a programmer and has held 15 different positions. A diehard veteran, Jordon assumed the role as CEO of the $22B company earlier this year. He was passed the baton by predecessor Gary Kelly and told, “you’ll figure it out.”
At least to our knowledge, this week marked the first time a Southwest CEO has visited Hawaii. That says a lot about the importance of the islands in the company’s plans. We met prior company president Tom Nealon, when he came to Honolulu for their Hawaii launch in 2019. Interestingly, Nealon was passed over for the CEO position, then abruptly quit as president last year.
Jordon takes the helm at a time of turmoil with problems of on-time performance and pilot disputes that are, to a large degree, industry-wide.
What’s your take on the latest ratcheting up of Hawaii flight competition?