Southwest Airlines extends to Hawaii Plans

"2 months ago," t Southwest Airlines (NYSE: LUV) at the end he started flying to Hawaii, almost a year and a half after his intention to serve the popular holiday destinations publicly announced. That said, the basis for it Boeing 737 MAX, which represents almost 5% of the Southwest fleet, has limited the capacity of the carrier to grow in Hawaii to date. "Data-reactid =" 11 "> Two months ago, Southwest Airlines (NYSE: LUV) finally he began flying to Hawaii, almost a year and a half after he had a secret to serve on the popular holiday destinations to publicly announce. That said, the basis for it Boeing 737 MAX, representing almost 5% of the Southwest fleet, has limited the capacity of the carrier to grow in Hawaii to date.

However, Southwest Airlines is still committed to becoming a bigger player in Hawaii when its 737 MAX fleet comes back into the air. In fact, last weekend, the airline announced that it intends to put Hilo on its route network in the near future. This would ultimately bring five destinations to the most popular discount airline within Hawaii, up from its previous plan of four.

A good start has been made to the inter-country market

When Southwest Airlines decided to fly to Hawaii, it was considering flights from some of the main markets in the West Coast (Oakland, Sacramento, San Diego, and San Jose) to the four best tourist destinations in Hawaii (Honolulu, Hawaii). Kahului, Kona, and Lihue).

"(b) – mt (0) – sm Mt (0.8em) – sm" type "text" content = "However, the carrier decided to enter the country market as well. Hawaiian properties (NASDAQ: HA) In recent years inter-country travel has been pioneered and Southwest management has had the opportunity to encourage demand with lower fares. Southwest Airlines started flying four daily rounds between Honolulu and Kahului last month, and it ran four daily rounds between Honolulu and Kona on 12 May. "Data-reactid =" 15 "> However, the carrier decided to enter the country market as well. Hawaiian properties (NASDAQ: HA) In recent years inter-country travel has been pioneered and Southwest management has had the opportunity to encourage demand with lower fares. Southwest Airlines started flying four daily rounds between Honolulu and Kahului last month, and it ran four daily rounds between Honolulu and Kona on 12 May.

A South Airlines plane is preparing to land, with mountains in the background

Southwest Airlines recently started a second inter-country route in Hawaii. Image source: Southwest Airlines.

Gary Kelly, Chief Executive Officer of Southwest Airlines recently said the carrier's inter-urban service was "doing very well." Therefore, it should not be surprising that Southwest is seeking to further grow its inter-country route network.

Flights to Hilo are coming

When Southwest Airlines announced its initial flight schedule in Hawaii, he said the service to Lihue on the island of Kauai would begin later. On May 11, the carrier showed that he will fly from Honolulu to Hilo, a Great Island Hawaii. The South West is likely to serve this way four times a day, sometimes beginning with this fall.

At first, at least, Southwest will not provide non-stop flights between Hilo and the mainland. The same is true for Kona too. Therefore, the intercity routes from Honolulu to Kona and Hilo are designed to serve customers joining from the mainland as well as local traffic within Hawaii.

How big is the threat to Hawaiian Hawaiian?

With the recent launch of the Honolulu-Kona route, Southwest Airlines already has a share of almost 10% of the intercity market. Assuming that the carrier will fly four times a day with Lihue and Hilo, its share would almost double to almost 20% when these routes start.

vas (0) M ((em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú ardú t Clearly a threat to Hawaiian Airlines, which has progressed in recent years since Its main competitors decline in Hawaii. "Data-reactid =" 43 "> It is clear that the rise in interway competition on intercity routes is a threat to Hawaiian Airlines, which has progressed in recent years since its main competitors collapse in Hawaii.

However, the threat may not be as great as probably many investors. Hawaiian Airlines offers an hourly service between Honolulu and Hilo, with up to 16 day trips. It offers more frequent flights on the intercity routes from Honolulu to Kahului, Kona, and Lihue. This gives him a great advantage in competing for business travelers – and anyone else who has to stick to a tight schedule.

</ p> (0) – Mt (0) – sm Mt (0.8em) – sm "type =" text "content =" In contrast, there are low charges and "probably that the policy will succeed with leisure travelers and locals who travel from time to time between the islands to visit friends and relatives. suffering claims box among these groups on their inter-land routes, especially to the Big Island. Even before Southwest arrived in Hawaii, there was a strong demand for Hawaiian Airlines among these groups on its intercity routes, particularly on the Great Island.

With single-way fares as low as $ 29 on certain days, Southwest Airlines is likely to provoke a major stimulus for travel between countries. Therefore, both airlines can serve complementary roles in the inter-country market, while Hawaiian serves the business community and other frequent travelers, while Southwest grows the leisure market by making it cheaper to travel between the islands.

Jet Hawaiian airlines parked on the tarmac

Image source: Hawaiian Airlines.

Hawaiian Airlines can meet the challenge

So far, Hawaiian Airlines are in line with Southwest fares on certain flights, which will put pressure on its unit income. It is also reasonable to assume that competitor power in the intercity market will reduce Hawaiian pricing power. However, as long as Hawaiian maintains its dominance in the business travel market, its inter-country routes should be highly profitable.

Therefore, the real threat to Hawaiian was that Southwest Airlines would significantly expand its inter-country schedules. Luckily for Hawaiian Airlines, Southwest only regulates four gates at Honolulu-packed International Airport. Due to its ambitions for mainland-Hawaii flights, more gates are needed from Southwest Airlines – which are hard to reach – to grow much longer than four daily rounds on its intercity routes.

In addition, Southwest plans to operate most of its Hawaii flights to the future 737 MAX 8. However, there are still many concerns about the 737 MAX and they intend to avoid this type of aircraft. This will keep some travelers flying Hawaiian Airlines, temporarily at least.

It is still early, but so far it has become a boom under the Southwest Atlantic internet service 'Hawaii. And while it may have to make some adjustments first, Hawaiian Airlines should be able to make progress in the inter-country market as well as its new competition.

"canvas-us can-text Mb (0) – mt (0) – sm Mt (0.8em) – sm" type "text" content " More from The Motley Fool "data-reactid =" 77 "> More from The Motley Fool

"canvas-us can-text Mb (0) – mt (0) – sm Mt (0.8em) – sm" type "text" content "Adam Levine-Weinberg It holds shares of Hawaiian Holdings and Southwest Airlines. The Motley Fool owns shares of Southwest Airlines and recommends them. Motley's fool recommends Hawaiian properties. There is a disclosure policy."data reactid =" 85 ">Adam Levine-Weinberg shares Hawaiian properties and Southwest Airlines. The Motley Fool owns shares of Southwest Airlines and recommends them. Motley's fool recommends Hawaiian properties. A policy has been disclosed by the Motley Fool.

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