Buyers Claim 49 Dollar Fares as Southwest Airlines Jump-Starts First Routes to Hawai‘i
The lower-cost carrier creates a buying frenzy with its stealth entry. Cheap seats vanish. Hawaiian Airlines stock shares drop precipitously. As a fare war looms, what can we expect when the dust settles?
PHOTO: COURTESY OF SOUTHWEST AIRLINES
But are there any seats for the rest of us?
If you bought your summer vacation tickets to the West Coast before today, you’re probably kicking yourself at the news that Southwest Airlines pulled off a successful surprise attack on the Hawai‘i market with $49 one-way Honolulu-Oakland fares marketed through an unpublicized Hawai‘i portal.
But don’t be too hard on yourself, even if you find—as friends of ours are discovering—that March and even April flights are already sold out. Just plan on summer travel, not spring. And act fast. (For all we know, by the time you read this, it may be too late. Try fall?)
As stealth moves go, the launch was masterful, preceded by “test flights” and no set start date. The $49 fares were definitely teasers, pure internet eye-candy, selling out by 6 a.m. Honolulu time. Still available—as of Monday—are some $189 to $214 one-way fares to some destinations including Oakland-Honolulu, Oakland-Maui (starting April 7), San Jose-Honolulu (May 5), Oakland-Kona (May 12), San Jose-Kona (May 12) and San Jose-Maui (May 26).
Longer term, the good news for the consumer is that interisland flights should go down in price. Southwest’s entry ends the stranglehold on the short-haul market that Hawaiian Airlines has enjoyed, and profited from, since the demise of Go! and Aloha Airlines in 2014 and 2008, respectively.
Short-term customer giddiness aside, what does the entry of Southwest portend for Hawaiian Airlines—which, after all, has embedded itself in Hawaiian culture and aloha? Hawaiian’s Monday share price of $29.62 at the opening of the New York Stock Exchange fell almost 10 percent by 10 a.m. EST, closing the day at $26.38. That’s what happens when your fleet of 55 planes comes into the viewfinder of a major carrier with 700 planes.
It can be expected that Hawaiian Airlines has anticipated a shock and awe event and will now respond with price drops of its own. (In fact, flash sales on Hawaiian Airlines started to appear online a couple of weeks ago.) The natural expectation is that the competition will lead to a race to the bottom—the kind of race the much larger carrier can sustain longer.
The last era’s fare wars sparked when Arizona-based Mesa Airlines bought Mokulele Airlines to jump-start its own entry into Hawai‘i. Soon Mesa launched an entirely new entity, Go! Airlines, putting pressure on Aloha Airlines when it had just emerged from Chapter 11 bankruptcy proceedings. In an industry notorious for razor-thin operating margins, a lot can change very quickly—for instance, if gas prices rise or the China tariff or other conflicts discourage travelers coming from Asia.
On the other hand, when first Aloha and then Go! ended up dissolving, the world and local markets were still recovering from 9/11 and the SARS epidemic, only to be hammered again by the 2007 economic crisis. The economy now is not as overheated as in 2007 and oil production is booming. Also, while the Southwest launch was a marketing home run, it remains to be seen how smoothly its entry into the Hawaiian Airlines market will be. The company has been distracted by a series of safety/labor-related snafus that grounded a portion of Southwest’s Mainland fleet a little over a week ago. Flying over the ocean for the first time, the carrier could be vulnerable to other labor actions motivated by safety or employee welfare concerns.
For now, local consumers have more choices, which is all to the good. So take advantage of the lower fares while you can.