Southwest Airlines officials Thursday praised the better- than-expected performance of its new Hawaii operations on a day in which they vented about another delay in the Boeing 737 Max suspension as well as a whistleblower complaint alleging that the carrier received special treatment by the Federal Aviation Administration in beginning Hawaii service.
“We’ve been flying Hawaii over 10 months … (and) it is doing phenomenal,” Southwest President Tom Nealon said during an earnings conference call. “Everything that we expected is at or better than our expectations.”
Nealon said Southwest’s Hawaii service, which began March 17, is about 2% of the airline’s operations.
“But it has a very important role in that it really supports our California business,” Nealon said after Southwest reported its profit fell 21% partly due to higher costs and lost revenue from the Max grounding. “It’s exceeding on every dimension. The demand and the load factors (percentage of seats filled) have been very, very good. We’re very satisfied with that, both the long haul as well as the interisland.”
Southwest will have
14 round-trip trans-Pacific flights as of April when it begins San Diego service. The airline also has ramped up to 38 daily interisland departures since beginning those routes April 28. Through December it grew its Hawaii service to over 1 million customers in 9-1/2 months, according to Southwest Chief Operating Officer Mike Van de Ven.
Nealon said Southwest’s ramp-up in Hawaii was a little slower than originally expected because of the Max delay and the resulting capacity issue.
“Everything we put into service, we’re thrilled with at this point,” he said. “It’s doing fantastic. … What’s interesting is we’re actually creating demand that we didn’t even see as being there. We’re seeing more connecting itineraries within the West Coast, which is interesting because we’re creating demand, we’re growing the market and fares are lower. … That is the classic Southwest effect.”
Southwest CEO Gary Kelly elaborated on a whistleblower complaint alleging the airline received preferential treatment from the FAA following a 35-day government shutdown. The complaint alleged that the FAA lowered the bar for ETOPS certification to allow Southwest to
begin Hawaii service by rushing the approval process and cutting corners for the financial benefit of the airline. The ETOPS certification permits an airline to fly on extended over-water routes hours away from emergency
airports.
“(The ETOPS process) was very, very thorough, and it was very, very challenging and you look at the quality of what we’re doing today is phenomenal,” Kelly said. “I can’t speak highly enough of the operation, seeing what they’ve accomplished in a short period of time. … I think it was 14 and 15 months to get done, by the way, which 12 to 18 is the norm. So that is not a fast path.”
Kelly also said he was caught off-guard this month when Boeing said the plane’s return to service won’t occur until midyear and that it was recommending flight-
simulator training before
pilots fly the Max.
“We ought to be able to get it done earlier than that,” Kelly said. “If you go back a month or month and a half, we thought we’d be ungrounded here in January. Now all of a sudden, in the space of 30 to 60 days, we’ve slipped six months? Why? What’s changed? As far as I can tell, nothing has changed.”
