AEROLÍNEAS

Southwest Airlines exploring inter-island service in Hawaii expansion

Dallas-based Southwest Airlines is considering inter-island service as part of its Hawaiian expansion, but no final decisions have been made, CEO Gary Kelly said Thursday.

"Step one, of course, is getting from California to Hawaii," Kelly said in a conference call with investors and media. "(Inter-island service) has been down our priority list, but we will have serious consideration of that."

Even if low-cost carrier Southwest (NYSE: LUV) doesn"™t offer inter-island service initially, it will continuously re-evaluate it, Kelly said. No Federal Aviation Administration regulations or other factors prohibit Southwest from offering it, he said.

The carrier has built its business strategy on short-haul flights and quick turnaround times, and inter-island service lends itself to that business model.

On another topic, flights departing late at night and arriving early the next morning probably won"™t be included in the initial service from the mainland to Hawaii, but may be added later, Kelly also said in the conference call.

"We don"™t really desire to fly red-eyes right now," he said. "For our style of operation, it would complicate things. I"™m assuming at some point, we would want that capability"¦ Whether we feel strongly that there is a revenue benefit from having the red-eyes, I don"™t think we can judge that yet»…

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