Brian Sumers of The Airline Observer has some really interesting commentary from Southwest Airlines Chief Operating Officer Andrew Watterson about the airline’s Hawaii operation. Much of it centers not on their flights from the West Coast to Hawaii, but on their substantial operation flying between the islands. The performance of these routes is absolutely brutal, yet Watterson says they still make sense.
- Southwest’s load factors on these routes run from 32% (Maui – Lihue) to 57% (Honolulu – Hilo).
- Average fares run in the $40s each way, often around 15% – 30% below what Hawaiian achieves on the same routes.
Southwest Airlines in Honolulu
Watterson says one of the things they’re dealing with is that tourists just don’t island hop the way that they used to as Sumers notes:
[T]he number of visitors who visit more than one island has fallen 15 percent compared to 2019, equating to about 700 fewer people per day.
However, on the plus side:
- They’re already sending these planes to Hawaii, and many would otherwise sit on the ground waiting for the flight times customers want
- In some cases they’re able to use crew with extra legal duty hours, rather than fresh dedicated crew
- Interisland flying gives Southwest more reach in the islands and also connectivity that helps fill planes between Hawaii and the Mainland. Some of their revenue from mainland-Hawaii flying should, therefore, be attributed to these short hops.
At the same time, their Hawaii operation needed a dedicated base, and dedicated sales support. They even added a spare plane. So it’s not all flying at the margin. And these flights are more expensive than expected – they planned to be flying a Boeing 737 MAX 7 which is smaller and supposed to be less expensive to operate than a MAX 8.
What stood out to me, though, is the argument that the intra-island flights help get Southwest the most desirable flight times for their mainland schedule. In other words, they are using intra-island flying to squat on gates.
- They need to schedule at least 6 flights per gate to keep preferential use gates.
- If they shrank flying they would give up gates and have to use each gate more – but that would mean spreading out their flights. They’d be able to offer fewer flights at the most desired times.
“The time channels are quite sensitive,” he said. “When people are leaving the West Coast, they prefer to leave not too early in the morning — let’s call it eight-ish plus or minus an hour — and arrive midday into the islands to get to the hotel and have beach time. Then they fly back in the daytime and arrive in the evening. And that means you really want to be able to have access to gates in Honolulu.”
I certainly understand the impetus to do this. They want gates and prime flying times. At the same time, they’re taking up space that others cannot use.
Meanwhile from a government perspective, it’s important to offer airlines certainty that they’ll be able to have gates available once they commence service, while also requiring that committed gate space be used or else it should go to others.
At the same time, the offering of preferential gates based on minimum usage creates an incentive for unnecessary and unprofitable flying (not environmentally responsible!) just to keep out competition.
Once Southwest starts flying Hawaii redeyes (which lets them reach destinations further east) they won’t need as many intra-island flights to maintain six flights per gate. We could see fewer intra-island flights as a result, if redeyes are additive to current Hawaii-mainland operations.
That said, Hawaii surprisingly isn’t the key focus of the airline’s planned new redeye flying.
Although Southwest’s Hawaii operation remains focused on the West Coast – “There will be some in Hawaii,” Watterson said. “The majority will probably be elsewhere.”
While Aruba is Southwest’s biggest Rapid Rewards redemption destination, that’s in large measure because their Hawaii flights are currently only reasonable accessible to West Coast travelers. Hawaii is unquestionably important to Southwest’s redemption program, and therefore to its profitable credit card program.
@Gary: “While Aruba is Southwest’s biggest Rapid Rewards redemption destination, that’s in large measure because their Hawaii flights are currently only reasonable accessible to West Coast travelers. ”
No, DAL is getting great same-day HNL service. No redeye needed (regardless of Stupid Steve says).
@Gary, typo alert. It is Hilo not Hilto.
It’s Hilo, NOT Hilto. Why do you just refuse to proofread before you hit “publish”?
@Gary, another typo alert: you have “hope” instead of island “hop” in the line immediately below the photo.
Why would one want to reply to Gary about typos? Is that the best you got? I always find his commentary informative and enjoyable, and typos are generally forgiven by the reading public.
If Alaska and Hawaiian merge that will be trouble in Paradice for Southwest. The merger would create the airline that Southwest is trying to evolve into. If Southwest flights are only half full now on $40 inter-island fares, what will happen when the competition gets fierce? Southwest will have a few flights to the neighbor islands spread out throughout the day. But, Alaska/Hawaiian will have many more, saturating the market. On top of that, Southwest has no ticketing agreement with other airlines, so they rely on just local traffic or their own transfers from the Mainland. Maybe I am missing something, but I can see why Wall Street is nervous about Southwest.
You could change the title to “Hawaiian Airlines Reveals Strategy: Unprofitable Hawaii Flights Protect Prime Gate Access” and not be wrong. Hawaiian is losing money hand over fist and keeps flying despite not have a strategy for making their Hawaii flights profitable–aside from hoping that Alaska takes on the losses and debt that is piling up. It is not a strategy unique to Southwest.
Most people use Southwest for short domestic hops. Since Rapid Rewards redemption rate is based on the cost of the ticket, What difference is it if they fly to Aruba or Hilo? You can’t game Southwest’s frequent flyer program and secure a cheap point ticket (verse cash) or a seat in business.
From what it sounds like is SW airline is majorly failing with not having proper strategies with dealing with certain flight situations and they should indeed improve this,but clearly the staff at SW are choosing not to do this and it is because they are Absolutely Incompetant
I’m probably in the minority but still most important is that locals have a way interisland to travel especially during the business weekday hours for workers and doctors appointments. I’m from Hilo and my immediate family is still there that interisland service is so important to them.
Typo Gary. Delta is the only airline worth writing about.
Is this article a precursor to Gary’s next breaking news that LUV has pulled out of inter island flying? LUV announced in March a 50% cut in flights.
It certainly seems to be crazy to operate flights at such low load factors especially when the yields are next to nothing. SWA is known for attacking a new market with lots of seats and low fares, but without a net increase in revenue or profits after 5 years it seems as if the aircraft and crews may be better off flying different routes.
If you’re flying INTRA-Island, you’re not going anywhere. You can only fly INTRA-Island on the Big Island, going between ITO and KOA.
Inter-island, please.
GSO has dozens of unused gates, but you don’t see Southwest “squatting” on those because the passenger revenue isn’t there.
All of these experts commenting here about spelling and content. NEWS FLASH – Occasionally one may misspell a word here or there. I am here for the content. Lighten up – you will live longer.