Southwest Airlines’ successful entry into the local Hawaiian market is performing well for the popular low cost airline.
Dallas based Southwest is now flying 737-800’s between Honolulu and Kahului and Honolulu and Kona. The Kahului flights began in April 2019 and the Kona flights in May 2019. Flights to Hilo on the island of Hawaii and Lihue on Kaua’i are also on the cards.
Southwest held its annual shareholder’s meeting in Denver on 15 May 2019 where Gary Kelly, CEO of Southwest, said the local island services were exceeding expectations and performing “extraordinarily well.”
In a State made of up eight large islands and numerous smaller islands and atolls, Hawaiians have a high dependency on air transport to get around and Southwest sees opportunities for the airline.
Hawaiian Airlines reined in
Local island services around Hawaii have traditionally been the domain of Hawaiian Airlines. The Honolulu based airline has long had a near monopoly position on these routes. FlightGlobal, an aviation consultancy, cites Cirium schedules data suggesting Hawaiian Airlines had 98% of the local island market wrapped up prior to Southwest Airlines landing.
Like many local carriers operating out of small island states and nations, Hawaiian Airlines has long reaped the benefits of incumbency and being a big fish in a small pond at Honolulu International Airport. The airline gained a well deserved reputation for market dominance and high fares.
Now, Hawaiian’s local island market share is predicted to drop to 87%.
Hawaiian Airlines has already announced that its revenue per available seat mile for the 4th quarter of the 2018/19 year will be down between 3 – 5%. This is blamed on decreasing demand and ticket prices.
Good news for travellers
This might be bad news for Hawaiian Airlines but it’s good news for long suffering travellers in and around the 50th State. Southwest Airlines is expected to have a significant impact on fares for flights to and around Hawaii.
There has been some speculation about how Hawaiian Airlines would react to Southwest’s entry onto their turf.
But Hawaiian doesn’t seem interested in competing on price. Southwest’s entry level fares are keen. A search of flights between HNL and OGG next Tuesday has fares starting at $29 one way and available on every flight that day.
Southwest’s four daily flights can’t compete with Hawaiian’s 27 daily flights for frequency, but they can compete on price. Hawaiian has one fare on offer the same day for $29 but typically their entry fares ranged between $59 and $159.
Hawaiian Airlines flies Boeing 717s between HNL and OGG with eight first class seats and 120 seats in economy. Southwest’s all-economy 737’s have 175 seats. But the flights between the islands around Hawaii are brief, and the cheap and cheerful Southwest offering will probably offset the pain of the tight cabin configuration.
What’s next for Southwest in Hawaii ?
Southwest’s expansion plans around Hawaii and elsewhere have been put on hold by the grounding of the 737 Max 8. Southwest had 34 of the Boeing 737 MAX 8’s in its fleet when the FAA grounded the aircraft. Southwest called the grounding a “costly distraction”. It has a further 250 on order.
Until Boeing resolves the issues surrounding the 737 MAX 8, Southwest’s further incursions into Hawaiian Airlines’ home territory and elsewhere will probably be curtailed.
When the grounding is lifted we can expect to see some further energetic inroads by Southwest in the Aloha state.