Time to Jump ship from Hawaiian?
 

With The Southwest announcement today and dirt cheap airfare, how can Hawaiian survive in this environment. RT tickets below $200 from West Coast and $60 RT interisland. Would a pilot there jump ship or wait for a merger to happen?

Teaser intro fares. SWA can’t make money at those fare levels using 737’s.

Probably teaser fares but Southwest has all their other routes to keep them a float.


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Southwest inter island is what should worry us the most! This is our bread and butter

Yea hawaiian has been fleecing the customers out there for a while on inter island. I wouldn't expect any brand loyalty, and for good reason.

Southwest intentions are obviously to knock out Hawaiian Airlines. Anybody know of the higher up guy that left Hawaiian for Southwest in management? Maybe Hawaiian p*ssed him off and now he's leading the pack for revenge.

Southwest will do to Hawaiian what NAI is doing to the transatlantic market. Legacies are pulling out of many European markets

Anybody senior to me, please feel free to jump ship! Let’s be realistic, WN could buy HA with their cash on hand if they really wanted to. It’ll take 3 things for me to be concerned; a MX facility, cargo facility, and codeshare.

Hawaiian has a great service from the states. It’s like saying Greyhound will put Southwest out of business if they started competing directly on city pairs.

I can barely withstand a 30 min flight on Southwest, let alone 6 hours next to Bubba and his 6 kids. What I would be more worried about is the kind of people Southwest will bring to the islands. I don’t think their are enough Motel 6s and RedRoofs to cover the inflow.

Hmmm. That may be a good investment now that I think of it.

It’s working for Scott Kirby at UAL ;)

This is a 2006-2008 redux with a few differences.

Anyone remember Mesa/go! entering Hawaii market? They brought 4 CRJ's and literally destroyed the inter island market. Hawaiian not only matched their fares, but accepted those fares and that's all they charged even if go! was full. In other words, Hawaiian was also complicit in Aloha's demise. And kama'aina couldn't care less. They all voted with their wallets.

Hawaiian was better positioned to withstand go! because they were flying heavies to the West Coast and therefore only roughly 20% of their lift capacity was inter island. When Aloha folded, Hawaiian got a virtual monopoly. Sorry, but WP or go! just couldn't compete or compare.

Since then, Hawaiian has done some fantastic things. It expanded far beyond just doing the West Coast flights, and I believe that is what will carry Hawaiian going forward.

Personally, I don't think Southwest even realizes what a gold mine inter island market is. Once we start serving it, I wouldn't be surprised if we significantly ramp up our presence there.

I know people wonder about CFM engines and how well they handle turns. Just as a point of reference, we do 30 minute turns in the -700 at smaller airports with 143 seats. Our -800's and MAX 8's are 175 seats, so naturally the turn times would have to be longer. Quite frankly, it wouldn't surprise me if we added -700's to ETOPS and do off-hours with it with the intent of producing revenue while positioning aircraft to/from Hawaii and rotate them for maintenance at the same time. One thing I know about our bean counters, they know how to make money in this business.

I think Hawaiian has done fantastic job in recent years. I do think we're gonna put a hurting on you guys inter island especially once it's all spooled up. Having said that, I think Hawaiian has a fantastic product and I think they'll do well if they keep expanding their longhaul markets. That was where Aloha made another huge mistake (among many) and is out of business. Hawaiian has learned from that experience, so I think you guys will be OK.

Interisland market should be a two-airline system.. kinda like how it was when Aloha was still around. Mesa came in and disrupted it. I think Hawaiian has learned a valuable lesson and broadened their horizons.

It's gonna be nice to see all this unfold, but I wouldn't quite discount Hawaiian unless your current management starts to significantly stray from Dunkerley's vision.

Once the "wanna get away" fares are sold out (and the initial introductory offers are for just a couple days so far) the other class fares are in line or MORE than what Hawaiian fares are...

Anyone who didn't think SWA was going to offer ridiculously low prices initially either hasn't been in the industry very long, or hasn't followed much of what is going on.

IMO what this does, and given our huge stock drop today, is makes us a cheaper takeover target. Any of us here for any length of time knows we have been rumored to be merged/bought out by just about every airline out there.. (UA, JB, DL, AK, VA, AA, ALgnt, SWA)

Let the rumors fly, all this means to me is more aimless chatter on 123.45 until SWA gets the hint that nobody wants to hear about their layovers etc.

Don’t be mistaken, it isn’t the stock price - it’s HA’s debt that keep the big boys away. If DL couldn’t make the numbers work at ~$6/share in 2012/3 - I don’t see a merger happening with the current price.

SWA is not a Hawaiian killer, but you’re wrong if you don’t think they are gonna take a big bite.

Could they not make the numbers work or was it Dunkerley and investors thinking they would be better off alone?

I had heard Dunk and Co were not interested in any merger/sale.. Take with a grain of salt because it's just what I heard over time on line... There's a reason I fly planes and don't run large companies...

I'm not worried about their West Coast operation... Time will tell if they can make inter-island work. I know they have smart people running the numbers, and have looked at all angles. Inter island, 2500nm away from the nearest base, with no dedicated maintenance, pilot base, FA base, hangars etc... They'll need to up their presence. Until then I'm cautiously hopeful.

Agreed. I think the Alaska pilots that like HI layovers should be more worried about SWA coming off the west coast.

Just a PDX pax here, but my two cents is HA won't be impacted by SWA as much as the other Airlines will...

1) Hawaii is much more of 'premium' destination than most of the leisure destinations SWA flies to. It's more like the Virgin Islands / Turks & Caicos, than it is Mexico or Florida.

It's the lodging, food, drinks, and recreation in Hawaii that's actually super expensive. I'm much more worried about how much the 6-Nights + $25 Drinks/Sandwiches at the resort are going to set me back. The flights are a smaller % of the total trip cost vs a trip to Cabo or Puerto Vallarta.

Spending a few extra $ to take Hawaiian is not a big deal for people that can afford Hawaii.


2) On a 5-6 hour flight, most experienced flyers will consider Aircraft & IFE much more. The choices for me (in order of preference) are:

Nonstop: HA A330 (rare sighting these days) or HA A321
Nonstop: AS 737
1-Stop: Delta through SEA
1-Stop: UA/AA


For this reason, I think SWA will hurt AS/AA/UA much more than it will HA.

Long way from your Eagle days I’m guessing. You want a wind check with that spAAm?

All of the initial tickets have been sold out today. I saw inter island at $29. Of course it’s a teaser.

It’s a new market with new challenges for sure. To be honest, I don’t think our plan is to compete with Hawaiian. But worst case, we just cut our losses and leave. We are the largest domestic carrier in the US and have been profitable for over 40 years—the bean counters have been hard at work no doubt.

To those at HAL who are having flashbacks from 2008.

There is a critical difference between SWA and go! (Mesa).

As the various court filings attest, go! was in Hawaii to knock someone out of business. They succeeded.

SWA is in Hawaii... to make some $$$. They will succeed.

HAL is a good airline. SWA is a good airline. SWA is not here to kill HAL; they are just here to make money, and they are doing it the way that they do it.

To HAL interisland guys, let’s not take out any Mesa PTSD on the SWA boys and girls when they show up. Race them interisland like old-school lunatics and have fun. It will be a leaner time with healthy and possibly intense competition, but no one is actively trying to put anybody out of business.

To the SWA guys, welcome, good luck, and be careful not to overshoot the base to final bottom turn on the Channel Approach when the wind is out of the south.

I don't have a dog in this fight, (don't work for HAL or SWA) but why all the SWA hate?

When I buy tickets (or my wife buys tickets for business) we always buy SWA. 2 Free checked bags, can cancel/ change without an additional fee etc.

No SWA hate, it’s all in good fun.

The crews are great....the passengers, not so much.

If you think SWA pax are bad, be glad Spirit or Frontier aren’t flying to the islands... yet.

Good point!

I really don’t think SWA is out to crush anyone in Hawaii, and especially Hawaiian. What they have does not compare to what Hawaiian offers with long range, widebody planes, a hometown presence, and better service.
There will be a market adjustment just like when any competitor enters a new market, but it will eventually reach a point of equilibrium with coexistence. Competition is a good thing.
I fly a lot on all different carriers and the pax on SWA are the same people that fly the legacy airlines when the ticket is cheaper. Believe it. The folks cashing in rapid rewards points on tickets are generally high value customers who fly SWA a lot for business or spend a lot on the branded credit card and are not bringing a garbage bag for luggage.
Besides, as someone mentioned above, getting to Hawaii is the easy part.

Not very accurate. You see the news these days and it's EVERY airline. Why? The lack of respect and the self entitlement. I've attached a gem of a video on a jetBlue flight no less than a month ago.

https://m.youtube.com/watch?v=JEKIsGvC7kc

Come on man, millennials don’t count! :D

Back in the middle 2000's I was routinely buying military RT tickets for squadron mates to travel HNL-LAX for less than $200 w/tax on UAL. And those weren't teaser fares.... they were bought often within 48 hours of travel. Lasted for over a couple of years.

SWA isn’t going after Pualani, they’re going after Chester. Hawaiian will be just fine, it’s AAG that SWA covets. Q3-4 2020 Merger announcement is my guess.

Agree that Alaska is the carrier that needs to be worried. It’s not just the California-Hawaii market, they’ve also tried to make inroads Intra-California against SWA and they’re failing miserably. Both of these market revenue streams are going to take a big hit for AAG.

All good things must come to an end. Maybe this is the time we get bought or merge. Hopefully it's one of the big 3 if that happens.
LUV will put a dent in our inter-island flying. A 717 displacement bid on the horizon? Southwest inter-island is great for the people of Hawai'i, but a big bummer if your an employee at HA.

Yep. AAG management is pretty chaotic right now.

Wasn’t there talk of adding interisland legs to NEO trips at HAL? Guess SWA jumped into that market share. So at HAL what is going on with the JAL deal that was all over the news last year? Will that increase interisland codeshare traffic when it kicks in full bore?

This. There's a reason our ETOPS briefing rooms have a shark going after a salmon with its mouth wide open on the wall...(at least in the artist renderings)

Hahahaha.

There’s a market for BOTH SWA and HAL doing Inter Island. The other thing we need to remember at HAL Is that island air just went out of business. These Southwest flights at least for the foreseeable future are not going to do much more than replace what island air was doing.

Yes, a couple years down the road this could get really ugly for us but at least for the immediate future I’m not worried.

No SWA hate out here at all.

The NEO is supposed to reduce the amount of interisland flying needed by decreasing the amount of connections through HNL. Even with the addition of the NEO, Hawaiian seems to still be operating a full interisland schedule on the 717.

As far as the JAL JV, still no word on that. From what I've heard from friends at Hawaiian, parts of the JV might affect scope language in the contract, so that needs to get sorted out too. JAL supposively wants to take their fleet from the leisure Hawaii market into the more lucrative business market, and let Hawaiian do the Japan flying. But JAL wants to create a low cost carrier that flies to Hawaii at the same time.

Maybe Southwest expansion into Hawaii will scare off Ingram and investors to finally sell and merge in the end. Hawaiian has lasted 90 years by itself and seems fairly confident in the media to compete agressively against the cash cow of Southwest. Only time will tell how this all plays out.

Time to Jump ship from Hawaiian?
 

^^^ That. Filler

Just curious, were you at HAL when AQ was around?

Wait until SWA sees just how big of a cashcow interisland really is... I don't think the bean counters in Dallas realize that just yet. Once they figure it out, watch us throw -700's into the ETOPS mix and doing what Aloha did back in the day flying interisland. But unlike Aloha, which was poorly run, undercapitalized, debt-laden, flying the old clacked out -200's interisland, and having that market be literally the bulk of its existence, Southwest is a vastly different animal.

I think Hawaiian's strengths are actually in the long haul flying and I think focusing on that will keep Hawaiian going strong. If Hawaiian decided to go toe-to-toe with Southwest, that'd be a BAD, BAD, BAD move.

Alaska has awoken the bear...

No hate towards anyone, it's just business.

No. Just missed it. This isn’t my first airline either though. I AGREE with many things that you say.

At the end of the day, we are going to be forced to modify our business plan. We will either be successful, or someone will buy us. I just drive a bus, but if we keep growing our east/South Pacific routes and add more mainland destinations, that will offset a lot (not all) of the loss from inter island capacity. Now add that if SWA wants to do what Aloha did, that means a full on base of operation. MX hangar, pilot and FA base also. That’s a lot of investment just to operate back-and-forth in one state.

At the end of the day, I hope were successful standalone. Honestly, I think the worst case scenario for us is that we Get bought by one of the big four and I can go back to having my West Coast base again. That’s not my first choice, believe me but I can live with that.

The biggest concern that’s coming to my mind right now is that our new union representatives are going to need to hold the line on scope. My biggest fear short term is that the knee-jerk reaction will be to try and grow Ohana while the 717 stagnates or shrinks. No thanks.

Not panicking. Again, everything that SWA has announced impacts Alaska off the West Coast more than it does us, and we’ve got a year or so before they fill the gap that island air left behind. Sleep with one eye open, but go ahead and sleep for now.