This week will mark a turning point for Southwest Airlines and, without a doubt, its Hawaii operations. All eyes are on two critical dates: October 24th, when the airline releases its financials, and September 26th, when Southwest’s Investor Day is set to reveal what could be its most significant changes yet.
With mounting pressure from activist investor Elliott Investment Management, major flight reductions in Hawaii are increasingly likely, leading to what can only be described as “D-Day” for Southwest’s presence in the islands.
Southwest entered the Hawaii market with high hopes and plenty of fanfare.
They promised affordable fares and increased competition. However, in recent months, its operations have faced turbulence. With low ridership, particularly on interisland routes, ongoing financial losses, and stiff competition from Hawaiian Airlines and the newly combined Alaska-Hawaiian Airlines entity, Southwest’s Hawaii venture has reached a critical juncture.
Despite already cutting back on 50% of its Hawaii flights and significantly raising prices on mainland-to-Hawaii routes, the airline’s Hawaii operations still appear unprofitable.
Southwest plans for assigned seats, a premium product, and Hawaii red-eye flights are not enough.
Chief Operating Officer Andrew Watterson, previously a Hawaiian Airlines executive, made it clear in a recent video to employees that these measures alone won’t be enough to turn things around. He stated, “Steps the carrier has already announced, including ditching a 50-year history of not assigning seats, offering a premium product, and beginning red-eye cross-country flights, aren’t sufficient to improve its finances to the extent needed.”
The pressure from Elliott Investment Management – what that means for Hawaii.
Adding to Southwest’s challenges, Elliott Investment Management is applying intense pressure on the airline. They have been pushing for leadership changes, including the potential ousting of executives, including CEO Bob Jordan and others, and reshaping Southwest’s board. As a result, Southwest is on high alert, with its leadership now forced to make decisions it might not have made otherwise, which could drastically reshape its Hawaii operations.
Elliott’s involvement has shifted Southwest’s focus even more. This spells potential trouble for its Hawaii flights, which have long been seen as underperforming and have been specifically so highlighted by Elliott in its presentations. Given that COO Watterson has already mentioned “difficult decisions” ahead, the stakes couldn’t be higher for Southwest’s future in Hawaii.
When will the axe fall?
The financial results on September 24th will set the stage, providing insight into Southwest’s overall performance and any immediate changes. However, the real fireworks are said to be expected two days later, on September 26th, during Southwest’s Investor Day in Dallas. Watterson, Jordan, and other executives are expected to unveil Southwest’s big plan there.
While it’s unclear whether the drastic changes will be announced on the 24th or the 26th, both days are likely to bring clarity about Southwest’s future Hawaii operations. According to Watterson’s recent video, “There are some difficult decisions coming as well. Not city closures. But you know, bigger changes for some cities.” This suggests that while Southwest won’t pull out of Hawaii entirely, significant cuts to its routes could be on the horizon.
Which Southwest Hawaii flights are most at risk?
The question on everyone’s mind is, “Which flights will get chopped?” Here’s what we might expect:
- Interisland routes: Southwest has struggled to gain a foothold in the interisland market, facing stiff competition from Hawaiian Airlines’ dominance. Low ridership and high operating costs make this segment the most vulnerable. We might see a significant reduction or complete withdrawal from certain interisland routes.
- Mainland-Hawaii flights: While Southwest has performed better on its remaining mainland-Hawaii routes, rising costs and competitive pressures from Alaska Airlines and Hawaiian Airlines could trim flights, particularly on those less profitable routes.
Community impact and reactions to upcoming Southwest changes.
Hawaii residents and visitors anxiously await news on the future of Southwest flights. Online forums and our Hawaii coconut wireless reveal a mix of opinions. Some believe that Hawaiian Airlines might step back into its monopoly role should Southwest scale back, leading to fewer options and much higher airfares. Others argue that won’t happen and that Southwest will maintain the status quo. At the same time, some continue to see Southwest’s attempt to capture the market as a highly risky venture, given the islands’ distance and quirky travel dynamics.
Are there lessons from Aloha Airlines, and what’s next for Southwest?
Southwest’s situation is similar to Aloha Airlines’s fate, which struggled under competitive pressures from other carriers before eventually ceasing operations. While Southwest overall is a huge and still highly viable airline, its Southwest’s Hawaii operations may be following a similar path of struggling against entrenched competitors and mounting financial losses.
Read: Why Airlines In Hawaii Are Always One Step from Chaos.
Can Southwest adapt in ways that allow it to remain competitive in Hawaii, or could it become yet another casualty in the islands’ aviation history? Watterson’s acknowledgment that the airline can’t rely on cutting costs or tweaking its service model signals that some more radical strategy might be coming this week.
What do you think will happen next? Are you a frequent Southwest Hawaii traveler, and do you rely on their interisland routes? We’d love to hear your thoughts as this story unfolds.
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Southwest’s downside is that they are using 737-8’s/MAX too fly between islands they need 700’s or start looking at the A220’s for the demand.Hopeful thinking that they would exit with Boeing.Boeing has hurt WN and others and why stay loyal in a market that is hostile.
While I love the low prices and open seating on Southwest, I stopped flying completely after COVID 19 kicked in. The 737-Max accidents scared me as well as Boeing’s ongoing issues with the type. Surely the Max is supposedly safe now, but I still have concerns.
It still would be bad if Southwest withdrew from hinterland, because all I can see is that the Alaska Hawaiian cabal will jack up hinterland fares if Southwest pulls out. 😯
I am also concerned the 737 Max may also be flying for Hawaiian with less flights and higher prices if they replace the 717s.
I thought Southwest earnings call comes out October 24th?
April and May schedules are released on the 25th so that might lend some insight also.
We need the Super Ferry back to give people in Hawaii real options when it comes to interisland travel… All the airlines are cutting back routes to Hawaii and moving from widebodies to A320 Neos. Trying to save money. SW should stick to what it does best – point to point flying. Perhaps limited daily direct flights to the different island destinations with turnaround back to the CONUS vs interisland hopping.
Best Regards
@Jay… which carriers have stopped using widebodies to Hawaii? AA, UA, and HA all still use them.
Didn’t state that they had Stopped using them but they have been replacing previous widebody routes with the A320’s and increasingly been turning to multi point stops vs nonstop flights from a major hub. I fly from the SE several times a year to HNL and that’s all I fly, nonstop widebody, so I try to stay on top of what’s available – usually months out to get the best seats and prices. If you investigate I think you’ll find it’s pretty obvious…
Best Regards
Thanks for the info… which routes are no longer using the widebodies. I definitely want to stay away from them.
I invite you to do your own due diligence to avoid confusion and get the best deal.
Best Regards
How are wide body jets better? Unless you’re flying first class, the economy seats are basically equivalent.
SWA’s success is is rooted in its mastery of logistics. One mainland plane turns profits in just one day by the nature of its point-to-point services across many states. Trans-Pacific routes are harder to squeeze. Inter-island, I would think, are even harder when your main competition is perceived and more appreciated as a “local” flyer. SWA was hoping they could assimilate the Hawaiian traveler into their mainland culture. I cheered the day SWA announced travel to Hawaii, but never took any of their flights because they were…well…the same old Southwest.
Elliott Investment will be the end of Southwest. It is such a shame that they’re taking a unique airline and forcing it to become a clone of the other airlines. I will resent having to pay for checked bags, maybe to the point of flying on Hawaiian again.
Well, Hawaiian obviously came out on top inter island, but with the moves Alaska is already making ( Hauka’i by Hawaiian) they are further strengthening their position. I will be surprised if SWA will stay……I can’t help but chuckle thinking about when they first came to Hawaii they hung a ceramic SWA liveried shark on their OAK office wall gobbling up the competition, depicted as two small fish painted up in Alaska and HA colors….Karma?
In addition, besides Alaska already further strengthening Hawaiians inter island operation making the competition stiffer for SWA, SWA tried to establish themselves knowing HA was a relatively small airline without the financial resources the larger carriers carriers enjoyed. They thought they were competing with a vulnerable carrier that they could just outlast. Safe to say that perspective is no longer valid. SWA been left with being the carrier that tried to destroy a local institution, failed and now Alaska has saved that local institution. Alaska has an excellent opportunity here and as is being correctly voiced by others here, they better not F*** it up!
Moderator please enforce the no profanity policy.
Sad to have the quality of the comments dragged down to the level of a junior high school argument.
Hope SWA won’t stop Las Vegas route.
Southwest has already cut one of my primary airports. If the direct Kona Route is affected in these efforts, it will be the end of my association with SW Airlines.
Their latest changes has them going from my primary airline to possibly a zero…
Southwest needs to chop some of its Hawaii routes and come back to the New York metro area. Cutting Newark was a huge mistake. Their Newark to Oakland flight provided good competition for United’s hub at San Francisco. It was always booked solid and highly profitable. For an airline. The size of Southwest to be a small-time player in New York is a missed opportunity.
I’ve said it before and I’ll say it again… better not touch the Companion Pass or they will become like any other airline to me.