The ‘Southwest effect’ caused some turbulence for Hawaiian Holdings’ share price after Southwest Airlines announced its plans for entry in the Hawaii market.
It plans to fly from the Californian cities of Oakland, San Diego, Sacramento and San Jose to Hawaii, a move which saw Hawaiian’s share tumble 6.5%.
After saying last week it would serve four airports in Hawaii – Honolulu, Lihue, Kona and Kahului – it is also looking at interisland services.
"Once we get our operation up and going here in Hawaii, our intent is to serve interisland," Southwest President Tom Nealon told Hawaii News Now.
"We think it’s a market that has little competition, if any. It’s very highly priced. We think we’ll offer a great product on interisland."
The news has Hawaiian sufficiently worried to fire off a response.
"Southwest’s PR strategy has been to toss out tidbits without much detail, so it’s unclear what kind of service or operation they are committing to," said Ann Botticelli, SVP of corporate communications and public affairs at Hawaiian.
Hawaiian also noted its interisland fares are competitive when stacked up against a random city pair with very different characteristics in Southwest’s network.
"The one-way fares for close-in travel tomorrow on one of our most popular routes — Honolulu-Kona — range from $85 to $195, while Southwest’s one-way fares for travel tomorrow from Austin-Houston — a flight of similar length – range from $233 to $270," Botticelli said.
Southwest plans to start selling tickets before the end of the year but still requires FAA approval for extend-range operations over water.
