Sometimes, it feels like Southwest Airlines has been flying to Hawaii forever. But in reality, the Dallas-based low-cost airline only started flying there two years ago. Since then, Southwest has faced substantial headwinds in the form of the 737 MAX grounding and the travel downturn. Both heavily impacted Southwest Airlines and its Hawaiian services.
Heady times fuel expansion plans at Southwest Airlines
Southwest Airlines announced its plans to fly to Hawaii in October 2017. It was a heady time at the airline and across the US airline industry in general. Southwest Airlines was flying 110 million passengers annually. The airline reported a net income of US$3.5 billion that year.
Southwest Airlines was in an expansionary mood. Hawaii would be part of those expansion plans. Much of the planned expansion was tied to incoming Boeing 737 MAX 8s. Southwest Airlines was the launch customer of the plane. In August 2017, Southwest Airlines took delivery of the first of more than 200 MAXs it had ordered.
“We’re going to start working with Boeing, making sure we get those ETOP certifications on the MAX. The MAX will be our Hawaiian aircraft as we work to connect multiple cities in California to the Hawaiian Islands,” said a cheery Mike Van De Ven, Chief Operating Officer at Southwest Airlines, in October 2017.
Hawaii underserviced by low-cost carriers
According to Southwest Airlines, Hawaii was a hole in their network and on top of the “where you should fly to” feedback. But drill down, and it’s all about the airline deploying aircraft on routes where they think they can make money.
There was already plenty of competition on the routes between the Hawaiian Islands and California. But the market was dominated by premium carriers (or airlines styling themselves as a premium carrier). The hop halfway across the Pacific was light on low-cost airlines.
That was an interesting state of affairs. Although not exclusively so, passenger traffic on routes to and from Hawaii is mostly leisure orientated. Tourism is Hawaii’s biggest industry, with visitors spending US$17.75 billion annually up until the travel downturn. Many leisure travelers are cost-conscious. That made Hawaii a good match for Southwest Airlines, with their keen pricing and target passenger demographics.
MAX crashes and travel downturn cramp Southwest’s Hawaiian ambitions
In May 2018, Southwest Airlines said it would fly Honolulu, Kona, Lihue, and Kahului from various California gateway cities, pending regulatory approvals. The airline did not disclose a firm timeline at the time, saying;
“We’re on track with our plans to sell tickets this year and are respectfully engaged in the process to receive FAA authorization to operate between the mainland and the Islands.”
In October that year, the first 737 MAX crash occurred in Indonesia, turning the spotlight onto Southwest’s new favorite plane.
Southwest Airlines finally began flying to Hawaii in early 2019. On March 4, 2019, Southwest Airlines announced its first services to Hawaii would start on March 17. On March 10, the second 737 MAX occurred outside Addis Ababa. Aviation agencies around the world began grounding the type, and, finally, the FAA did too.
As a result, Southwest’s 737 MAX-operated Hawaii services ended before they began. Boeing 737-800s quickly substituted for the MAXs.If that wasn’t enough, one year later, with the MAXs still grounded, a virus caused global passenger demand to plummet. Hawaii enacted tough quarantine rules, even for travelers from the US mainland.
With the benefit of hindsight, Southwest Airlines picked a lousy time to start flying to Hawaii. Those services got the full brunt of both the MAX grounding and the travel downturn. But Southwest always said they were going to Hawaii for the long-haul. With domestic flying in the United States recovering nicely, and that recovery led by leisure travelers, Southwest’s decision to fly to Hawaii may start to pay some dividends.