Southwest Airlines, known for its high-quality service and "bags fly free" policy, has passed the final labor hurdle for its much-anticipated entry into the Hawaii market.
Even if the Dallas-based, low-cost carrier eventually begins service to the islands, it may not lead to lower airfares because of the high cost of operating jets to Hawaii, aviation observers say.
The airline’s flight attendants approved a tentative agreement Friday that allows Southwest to operate flights over water and to international destinations such as Mexico and the Caribbean. Southwest pilots voted in June to approve over-water flights.
Southwest declined to provide a timetable for possible Hawaii service, but earlier this year CEO Gary Kelly said at a Wings Club event in New York that Southwest could begin flying to the islands in 2014.
"The ‘when’ is still to be determined," Southwest spokesman Paul Flaningan said Friday. "We do not have any announcements forthcoming. However, today’s announcement on the flight attendants clears at least the labor hurdle. Now, from a business standpoint, we’ll be making that determination when that will take place."
WINGING IT Southwest Airlines is looking at flying to Hawaii:
>> Founded: 1971 >> Headquarters: Dallas >> Leadership: Gary Kelly, chairman, president and CEO >> Employees: 46,000 >> Fleet: 698 Boeing jets >> Flights: 3,900 a day >> Total passengers carried: 104 million >> Routes: 97 destinations in 41 states; Washington, D.C.; Puerto Rico; six near-international countries
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Southwest, which purchased AirTran Airways in 2011, has served only the mainland for the past 41 years. But now with the purchase of AirTran, which already flies internationally, and with the acquisition of 175-seat Boeing 737-800 aircraft that began getting delivered this spring, Southwest is ready to expand.
"We have a very large domestic network in the continental U.S., and I think our passengers would like to see Hawaii on our route map," Flaningan said. "Hawaii is a no-brainer for the 100 million people who fly with us every year."
However, Colorado-based aviation consultant Mike Boyd said he doesn’t expect Southwest to offer lower fares.
"They’re not cost-competitive," Boyd said. "Their airplanes are not big enough. Hawaiian Airlines could eat their lunch because they have lower costs. Southwest’s costs for the 800 can’t compete with the (294-seat) A330, which Hawaiian is flying."
Boyd said Southwest likely will focus on flying across the Caribbean, but what it would bring to Hawaii is its service.
"They can’t bring lower fares, but they’re a great airline — best in the business," Boyd said. "They don’t give you a meal; they give you a bag of peanuts. But they give you respect, and that’s why a lot of people fly them. You don’t get that from a lot of airlines."
Likewise, Hawaii aviation historian Peter Forman said he doesn’t see Hawaii airfares changing significantly.
"With the aircraft they’ll be using, they can be competitive in smaller markets, but in markets like Los Angeles and San Francisco, you’ll continue to see the wide bodies dominate those markets," Forman said. "They’re not going to be bumping anybody out of the big markets and setting fares on fire with that airplane."
The addition of Southwest to the Hawaii market would provide a big boost to tourism, which is on track this year to achieve a record 7.9 million visitors.
"They’re a strong competitor, so they definitely would add seats to the market and you would see city combinations that you don’t see today," Forman said.
New York-based aviation consultant Bob Mann said Southwest’s impact on the Hawaii market will depend on its pattern of service.
A recent change in Southwest’s frequent-flier program also could encourage more travelers to visit Hawaii.
"Before, you got free flights based on the number of segments you flew," Flaningan said. "Now it’s based on how far you fly. So for those flying on more long-haul routes, our new rapid rewards program is more beneficial to them."
Southwest’s entry into the Hawaii, Alaska and international markets is still contingent on several things. They include further training on the 737-800s, of which there are now 20 in the fleet; the integration of AirTran, due to be completed in 2015; operational issues, such as gate availability; technology enhancements, such as a new reservation system due to be functional in 2014; and Federal Aviation Administration approvals.
The arrival of Southwest in Hawaii could prompt other carriers to rethink their fee policies since Southwest doesn’t charge for bags or changing flights.
"That’s what sets Southwest apart from the other carriers, and I don’t think there are any plans in place for that to change," Flaningan said. "We don’t charge change fees. We don’t charge bag fees. It makes us who we are and is a differentiator. There are no plans to alter that at all."
Southwest’s flight attendants, represented by the Transport Workers Union, barely approved the labor agreement by a 52.3 percent margin after rejecting an earlier proposal in May. Contract changes are necessary before Southwest can acquire international routes or train flight attendants for over-water safety procedures.
"We’re very pleased to reach this agreement, with terms that will allow the company to grow and prosper, protect the interests of the flight attendants and allow us to continue to provide the exceptional customer-first service that Southwest is known for," said Stacy K. Martin, TWU Local 556 president.
TWU spokesman Jamie Horwitz said some issues the flight attendants had to vote for were related to international flying, such as who pays for their passports.
"What today’s vote was really about was all these terms and conditions required for both international and over-water flying, and the membership approved that," Horwitz said. "That, plus the fact that pilots had earlier done so, eliminates the roadblock for Southwest coming to Hawaii."