Why Southwest Hawaii Flights Could Be in Jeopardy Now

The announcement that Alaska Airlines has acquired Hawaiian Airlines this week has abruptly created new dynamics in Hawaii air travel and raised questions about Southwest Airlines’ future in our islands.

Southwest, struggling to gain traction with its Hawaii operations, now faces even greater pressure from a massively strengthened Alaska-Hawaiian competitive alliance. It seems increasingly likely that Southwest may significantly scale back its Hawaii services. Here’s why.

Southwest’s ongoing struggles in Hawaii.

Southwest’s expansion into Hawaii was initially met with excitement by visitors and residents as the airline introduced its signature low-cost fares to interisland routes and direct flights from the mainland. However, over time, the airline’s performance has fallen short of expectations.

Despite cutting 50% of its Hawaii flying and continuous adjustments increasing mainland flight costs, Southwest faces low ridership and mounting financial losses in Hawaii by all accounts. The interisland market, in particular, has proven challenging, where Southwest remains unable to compete with Hawaiian Airlines’ dominant share.

In prior articles, Elliott Management, the airline’s large activist investor, has suggested they may favor Southwest scaling back or even exiting Hawaii if profitability doesn’t improve.

For more context on Southwest’s struggles, see The Southwest Effect in Hawaii: Is it Officially Over?

What does Alaska Airlines’ acquisition of Hawaiian Airlines mean for Southwest?

The purchase of Hawaiian Airlines by Alaska Airlines, effective today, creates a new competitive force that will profoundly impact Southwest’s position in Hawaii. Hawaiian Airlines has long been the preferred choice for interisland flights thanks to its local loyalty, high flight frequency, dedicated fleet methodology, and strong island brand presence. By acquiring Hawaiian, Alaska Airlines gains access to this entrenched market share.

Although Alaska’s primary focus has always been on mainland-to-Hawaii routes, acquiring Hawaiian may encourage the combined entity to refocus on solidifying its interisland dominance. This could push Southwest further out of the picture, making it difficult for them to continue competing in our region. That is also true given their lack of a dedicated interisland fleet and less frequent/convenient flights.

If these aren’t enough, Alaska has more tricks up its sleeve.

Those include bringing the troubling Hawaiian Airlines Philippine-based call center back to being a U.S. operation once again. And we can look forward to a complete technology revamp on both the Hawaiian Airlines website and their mobile apps, none of which have worked correctly since a failed system upgrade that occurred in 2023.

These challenges are discussed further in The Next Shoe to Drop in Hawaii Travel: Southwest.

Southwest’s interisland dilemma.

For Southwest, the interisland market has been particularly tough to crack. Low ridership and poor financial performance have plagued Southwest’s Hawaii operations, and the merger of Alaska and Hawaiian Airlines may be more or less the final blow to any greater interisland ambitions.

Alaska will inherit and possibly expand Hawaiian Airlines’ interisland route dominance, leaving Southwest with even fewer passengers to compete for. Southwest’s cost structure and the complexities of serving these shorter routes make it difficult to achieve profitability, especially when pitted against a combined Alaska-Hawaiian force.

Mainland-Hawaii routes: Will Alaska force a refocus for Southwest here too?

Alaska Airlines already has a strong presence on the West Coast. With Hawaiian’s acquisition, it can bolster its mainland-Hawaii routes in such a way that poses another challenge for Southwest. Alaska could focus resources on enhancing its already robust West Coast-Hawaii network. Without a doubt, this leaves Southwest to contend with a much tougher competitor on all its Hawaii routes.

It won’t take long for Southwest to figure out if this means further reductions in their Hawaii flights or a pivot to focus more exclusively on mainland Hawaii routes is indicated. They appear to have fared considerably better there than in the interisland flight market.

There are other issues that Southwest faces here in Hawaii too, beyond the latest wrinkle. Among them, the long-planned red-eye flights departing the islands have not yet been introduced.

What comes next for Southwest?

1. With mounting pressure, accruing financial losses, and investor problems abounding, Southwest will undoubtedly seek to make significant changes to its Hawaii operations.
2. Southwest could choose to maintain key mainland routes, but the likelihood of a diminished interisland service appears strong.
3. Alternatively, albeit seemingly less likely, Southwest might attempt to fight back with aggressive pricing strategies. However, the financial toll this would take at such a challenging time for “LUV” might prove unsustainable.
4. Southwest’s more likely option is to consolidate and reduce its Hawaii routes, focusing on markets where it has achieved better financial performance.

Southwest’s withdrawal from Newark: A parallel to Hawaii?

Southwest’s struggle to gain a solid foothold in Hawaii is at least in some ways similar to its previous attempt to break into another competitive market at Newark Airport (EWR). After nearly a decade of Newark operations, Southwest retreated in 2019, citing multiple issues. Those included financial performance, competition from United Airlines, which dominates that airport, and the grounding of the Boeing 737 MAX fleet. CEO Kelly said at the time, “The financial results at Newark have been below expectations, despite the efforts of our excellent team at Newark.”

Southwest once had up to 20 daily departures from Newark to 10 cities. In Hawaii, too, Southwest entered the market with high hopes, but has faced steep competition, especially in the Hawaiian Airlines-dominated interisland market. That, in particular, has proved a tough nut to crack, with Southwest’s larger planes, low ridership, and mounting financial losses.

While the situation in Hawaii appears driven more by competition and financial struggles than operational challenges, compared with Newark, there are still similarities. Southwest may have to make choices in Hawaii to once again concentrate on markets with proven performance.

The Hawaii challenges ratcheted up significantly this week, making the competitive landscape appear far tougher. Unlike at Newark, where Southwest shifted to a nearby market, LaGuardia, Hawaii flights have geographical and logistical issues that may not offer them similar flexibility.

Conclusions about Southwest Hawaii flights now.

The acquisition of Hawaiian Airlines by Alaska Airlines marks an unprecedented shift in the Hawaii aviation market, and the impact on Southwest Airlines will undoubtedly be profound. While nothing is certain yet, multiple signals indicate the possibility of a sharp contraction in Southwest’s Hawaii flights, especially in the interisland market, where they have struggled to compete.

Hawaii visitors and residents can expect to see significant changes in Hawaii flights, including Southwest’s Hawaii service, in the coming months, as a combined Alaska-Hawaiian entity strengthens its foothold and forces Southwest to face difficult decisions.

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