Southwest Airlines executives ended years of speculation Wednesday by officially announcing that the mainland carrier will sell tickets to Hawaii beginning next year, and raising the possibility of offering interisland service.
Officials from the Dallas-based carrier, known for its “bags fly free” and no-fee policies, said they were not ready yet to identify the mainland-Hawaii routes it will fly, but said its large presence in California is an indication that some of the service will come from there. Executives also said it was too early to say when the airline would begin flying to Hawaii.
They acknowledged that the airline is evaluating the possibility of offering interisland travel — a move that would cut into Hawaiian Airlines’ dominance in the islands and potentially hurt smaller local carriers Island Air, Mokulele Airlines and Makani Kai Air. In addition, Southwest said it is considering nonstop flights to neighbor islands.
Southwest made the announcement this week because it soon will begin a public application process to obtain the Federal Aviation Administration’s ETOPS (Extended Twin Operations) certification for operating aircraft between the mainland and Hawaii, airline officials said. That certification measures how far an aircraft can be safely away from land and over water if one engine gives out.
Southwest President Tom Nealon and Gov. David Ige made the joint announcement late Wednesday afternoon via satellite from Waikiki Beach behind the Royal Hawaiian Resort to an estimated 10,000 Southwest employees at a company party at Universal Studios in Los Angeles.
In Los Angeles, Chairman and CEO Gary Kelly told the partygoers that “a day long-awaited by our customers, fans, and more than 55,000 of the world’s most-loved airline employees is finally within sight — a day that will showcase your hospitality, about as far southwest as you can go in the U.S.”
Southwest Chief Revenue Officer Andrew Watterson, who worked for Hawaiian Airlines as vice president of planning and revenue management from 2011-2013, told the Honolulu Star-Advertiser in a phone interview that the company was purposely ambiguous about when Hawaii flights would begin because that will depend on when ETOPS authorization is received.
“We wouldn’t be so bold as to say we’ll start flying in October or November or July of 2018 and not go through the FAA process,” Watterson said. “We know we’ll get through the FAA process in time to sell tickets next year, but until the FAA gives us better indications of the authorization timeline, we’re not going to speculate and put a date out there. This has been a long time coming so there’s no particular reason for us to rush it. For us, it’s more important to do it properly than doing a certain date.”
HE also said Southwest will hire an unspecified number of local employees as well as give current employees the opportunity to transfer to Hawaii for ramp personnel, customer service and mechanic positions. He said there won’t be enough flight activity in Hawaii to have a base for pilots and flight attendants.
Watterson said the airline, which is the first operator for the Boeing 737 MAX 8 aircraft, will use those 175-seat planes for Hawaii service. Southwest received nine MAX 8s on Oct. 1 and will have 14 by the end of this year.
Airline industry experts said despite the increased competition between Hawaii and the mainland, fares are not expected to change much because it costs more per mile to operate Southwest’s aircraft than the larger planes operated by Hawaiian Airlines and other carriers.
“Fares won’t change because Southwest won’t have lower costs than, say, Hawaiian does,” Colorado-based aviation consultant Mike Boyd said. “They do very well, but this is not a market where Hawaii is going to be the new cheap place to go because of Southwest. It ain’t happening.”
Hawaii aviation historian Peter Forman said margins for airlines are already “skinny” flying to Hawaii and that Southwest is not going to change fares significantly because they operate smaller jets.
But Watterson disputed the suggestion that Southwest won’t be able to offer lower fares.
“Our seat-mile costs are below (other airlines serving Hawaii) and we will offer lower fares than currently are in the marketplace. You can count on that,” Watterson said. “One hundred and seventy-five seats in a 737-800 is a different scale of economy and we can keep costs low by higher efficiencies.”
Southwest serves 10 cities in California and carries more passengers to, from and within the state than any other carrier. It makes nearly 700 departures a day from Burbank, Long Beach, Los Angeles, Oakland, Ontario, Orange County, Sacramento, San Diego, San Francisco and San Jose.
The extra airline-seat capacity could mean further records for Hawaii’s visitor industry, which is on track in 2017 for its sixth straight record year of arrivals and spending. In particular, the U.S. West, which is Hawaii’s top visitor market, rose 3.7 percent through the first eight months of the year and accounted for 41 percent, or 2.6 million, of the 6.2 million visitors who came by air during that period.
“Southwest Airlines’ decision to serve Hawaii is a big win-win for the state,” said George Szigeti, president and CEO of the Hawaii Tourism Authority. “Southwest will make our tourism industry stronger and give residents more options to consider when traveling nationwide. This is great news that elevates the prospects for Hawaii’s tourism industry to maintain its continued success in 2018 and beyond.”
IGE said the addition of Southwest’s extensive travel network will allow Hawaii residents and visitors to expand their reach across the country.
“The additional flights to the islands will boost our vital tourism industry and offer our kamaaina more travel options,” he said in a statement.
Hawaiian CEO Mark Dunkerley said last month that he’s not concerned about increased competition from United Airlines, Southwest or others.
“We have every confidence that we’re going to win this competitive battle because we’ve seen it before,” he said. “Throughout it all, Hawaiian Airlines has succeeded and remained the best competitor in the marketplace.”