Southwest Airlines’ entry into the Hawaii market might just be the biggest aviation announcement in the carrier’s 50-year history and Hawaii’s most exciting airline debut since Alaska Airlines entered the market about a decade ago.
The announcement, in the short term, will surely bring airline price wars and favorable fares for consumers. In the midterm it renews competition in the interisland market and adds air seat capacity for Hawaii’s West Coast market, which supplies the bulk of the state’s visitor arrivals. But how these developments will play out in the long term is uncertain.
Hawaiian Airlines’ stock price plunged 10.9 percent to $26.38 on Monday to dip into negative territory for the year at -0.1 percent. Over the last 52 weeks, though, Hawaiian’s stock has fallen 24 percent. Investors on Monday were reacting to Southwest’s announcement that its inaugural flight will come from Oakland International Airport to Daniel K. Inouye International Airport on March 17.
Brad DiFiore, Ailevon Pacific Aviation Consulting managing director, said, “This is the most significant new market launch for Southwest potentially in their history, certainly within the last few decades. It’s the biggest news for Hawaii air service since Alaska’s entry into the market. I expect Southwest will add more capacity in dribs and drabs.”
So far, Southwest also has announced that it will start service between Oakland and Maui on April 7. The carrier will begin flying between San Jose, Calif., and Honolulu on May 5, with service between San Jose and Maui starting May 26.
On April 28, Southwest will launch interisland service, four times daily in each direction, between Honolulu and Kahului. Beginning May 12, the carrier will begin service between Honolulu and Kona flying planes four times daily in each direction.
Introductory low-fare flights between both Oakland and San Jose, Calif., and the other Hawaiian Islands, are available for purchase through today at 9:59 p.m. Hawaii time for as low as $49 one way. Southwest’s interisland sale, as low as $29 one way, also will be available for purchase through today at 9:59 p.m. Hawaii time. Travel is good through June 19; however, by Monday evening lots of flights were already sold out.
The carrier said it would provide additional details for the previously announced gateways of San Diego and Sacramento, Calif., and for Lihue in the coming weeks.
If the added capacity sparks a battle, insiders say the least favorable position belongs to Alaska, which entered the Hawaii market in 2007, taking advantage of the void in the California-Hawaii market created by the 2008 bankruptcies at ATA and Aloha airlines.
Hawaiian has a historic stronghold in its home state’s interisland flying market, where it has had a monopoly since the November 2017 shutdown of Island Air, said Brett Snyder, founder and author of the airline industry blog Cranky Flier (crankyflier.com).
The market also proved too tough for Aloha Airlines, which stopped flying in 2008; go!, which ended Hawaii operations in 2014; and Island Air, which filed for bankruptcy and ceased operations in November 2017. Snyder said that there is probably room for another major interisland carrier in Hawaii, but only time will tell whether that carrier is Southwest.
It’s another story in the U.S. West, where Southwest is well fortified.
“Southwest was already fighting a drawn-out battle in California since Alaska bought Virgin America and made a big push into California,” Synder said. “It will be interesting to see if Alaska can adapt.”
So far, none of the three carriers are showing signs of retreat. Alaska Airlines spokesman Daniel Chun said the carrier launched a fare sale Monday evening that would last through Thursday. For example, one-way fares between Honolulu and the U.S. West ranged from $149 for Los Angeles to $239 for Anchorage, Alaska. The sale, which is good for travel through May 22, also involves other cities.
Hawaiian Airlines spokesman Alex Da Silva said in a statement that the carrier also had “responded to some of Southwest’s introductory offers.”
“We successfully compete every day against the biggest airlines in the world with award-winning service, leading punctuality and unmatched value. We provide nonstop flights to Hawaii from 12 U.S. mainland gateway cities, and soon to be 13 with Boston — more than any other carrier,” Da Silva said.
Hawaiian’s reputation for on-time performance also could challenge Southwest, which asked a federal court Thursday to order its mechanics and their union to “stop reporting excessive maintenance issues” that are grounding aircraft and threatening “irreparable injury.”
So far, the clear-cut winners are travelers and Hawaii’s visitor industry, said Jack Richards, president and CEO of Pleasant Holidays LLC.
“Average airfares started moving down pre-emptively about 60 days ago. They’re about 10 percent lower year over year,” Richards said. “Southwest’s sale has sparked demand. Better yet is all of the marketing, which I think will lead to an uptick of about 10 to 20 percent in overall U.S. visitor arrivals this year. Some of these visitors might not even be coming on Southwest.”
Rhea Miller, owner of Hawaii ‘Aina Coffee Shop in Waikiki, said she’s hopeful that Southwest’s increased air seats and lower fares will bolster tourism.
“It’s softer this year than last year. Hawaii has a reputation as being an expensive destination. This might help,” Miller said.
Mufi Hannemann, Hawaii Lodging & Tourism Authority president and CEO, said he’s optimistic about Southwest’s arrival, too. However, Hannemann said Southwest’s entry will be good only if it is here for the long haul.
“In the past we’ve seen a few flashes in the pan. Other carriers entered the market with an initial burst of enthusiasm that temporarily drove prices down and hurt competitors. Then they left,” Hannemann said. “Southwest has been around a long time and has a strong national reputation. That seems to suggest that they’ll have staying power.”
Southwest will kick off its Hawaii service in less than two weeks before quickly expanding. The initial routes and start dates for mainland and interisland service:
>> Oakland, Calif., and Honolulu, March 17
>> Oakland and Kahului, April 7
>> San Jose, Calif., and Honolulu, May 5
>> San Jose and Kahului, May 26
>> Honolulu and Kahului, April 28 (four round trips daily)
>> Honolulu and Kona, May 12 (four round trips daily)
>> Oakland and Kona, May 12 (connecting via Honolulu)
>> San Jose and Kona, May 12 (connecting via Honolulu)
>> Service announcements are expected for San Diego, Sacramento and Lihue in the coming weeks.
Ticket information: Flights from both Oakland and San Jose to either Honolulu or Kahului are now available for purchase through today at 9:59 p.m. Hawaii time for as low as $49 one way. Interisland service to begin April 28 between Honolulu and Kahului, and May 12 between Honolulu and Kona, is now available for purchase through today at 9:59 p.m. Hawaii time for as low as $29 one way.