Since the airline started to take delivery of new Boeing 737MAX 8 aircraft, there has been widespread speculation that it would use the planes – which can fly 500 nautical miles farther than its 737-800s – to begin service. And now the company has announced its intention to do just that.
Southwest said it will seek FAA approval to gain ETOPS certification for its new 737s – a regulatory requirement for flying them to Hawaii. ETOPS stands for Extended-range Twin-engine Operational Performance Standards. Assuming it gains that approval, Southwest said it “plans to begin selling tickets in 2018 for service to Hawaii.” [More…]
However, the company hasn’t yet said which airports will get the new flights – only that “service details are to be announced at a later date. ” While it would make sense to see Southwest offer flights from its big base at Oakland, there is already plenty of competition there and at other Bay Area airports from United, Hawaiian, and Alaska/Virgin America.
Southwest officials made the announcement to a gathering of its employees in southern California. Joining the conference via satellite from Honolulu were Hawaii Governor David Ige and Southwest president Tom Nealon, who predicted that the carrier’s entry “will be a game-changer in the US. to Hawaii market.”
That statement is probably a reference to something called the Southwest Effect— What’s that? Get the full story on TravelSkills.
In a recent detailed analysis of the likelihood that Southwest would start flying to Hawaii, the financial website Seeking Alpha predicted this would likely lead to a fare war. “In our opinion, the most important impact of the Southwest Effect in Hawaii is that it tends to lead to a dramatic reduction in fares, given that we believe travel demand to Hawaii is relatively inelastic (so passengers are unlikely to increase much),” the website said.
Seeking Alpha predicted that Southwest “could easily add at least 10 daily flights to Hawaii, to start with.” Based on the amount of market share that Southwest controls, it suggested that likely airports to host Hawaii flights would include Los Angeles, San Francisco, Oakland, San Jose, Phoenix, San Diego, Seattle and Portland.
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But don’t get too excited about lower fares to the islands. Atlanta expected the Southwest Effect to reduce fares when Southwest took over AirTran’s hub there. Instead, fares went up and the number of flights went down. “Airfares have gone up so much that Atlanta had the largest year-over-year increase in average domestic fares in the country,” reported the Atlanta Journal-Constitution in 2014.
My best guess is that we’ll enjoy a temporary decrease in fares as airlines compete with Southwest on introductory fares, but in the long run fares will remain about the same, currently, stubbornly, rarely sinking below the $400 average roundtrip from California.
Why? Because it’s not cheap to fly to Hawaii— it’s about 2,500 miles from the US west coast, a route that requires more fuel and more expensive planes. And increasingly, Southwest’s recent moves have shown that it’s not always a low fare leader.
What do YOU think will happen to Hawaii fares when Southwest enters that market? See comments, or leave your own on the TravelSkills.com blog. –Chris McGinnis