Will the ‘Southwest Effect’ lower the cost of Hawaiian flights?
Since Southwest Airlines began to challenge the established major airlines in the 1990s, the low-cost carrier has forced its competitors to lower fares in what industry insiders call “the Southwest Effect.”
Fans of Hawaii are hoping that “the Southwest Effect” happens next year when Southwest Airlines hopes to begin serving islands in the Pacific.
Southwest Airlines Chairman and Chief Executive Gary Kelly on Wednesday announced plans to file an application with the Federal Aviation Administration to begin service to Hawaii next year.
The airline said more details of the new service, such as the date it would launch and the mainland cities where the flights would originate, would be released at a later date.
Southwest Airlines is now the third-busiest carrier in the U.S., and a study by the University of Virginia this year found that Southwest still has the power to force its rivals to lower fares to stay competitive.
The Dallas airline began to fly outside the U.S. in 2014 when it took over flights to the Caribbean from its subsidiary AirTrans. Later that year, Southwest began flying to Mexico and the Dominican Republic.
Andrew Watterson, executive vice president and chief revenue officer, said the airline expects it could take the FAA one to two years to approve the carrier’s application for long-term service to Hawaii. Once approved, he said, Southwest will fly most of its routes from California to Kauai, Honolulu and the island of Hawaii.
The carrier started to take delivery this summer of the Boeing 737 Max 8, a new jet with quieter engines and better fuel efficiency. Watterson said Southwest has been waiting for delivery of the 737 Max 8 to deploy it on routes to Hawaii.
As for ticket prices, Watterson said, Southwest officials have looked at how much other carriers charge for flights to Hawaii and believe the carrier can charge less.
“We anticipate fares will drop,” he said.
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