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Southwest Airlines wins FAA approval for Hawaii service
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Southwest Airlines wins FAA approval for Hawaii service

Southwest Airlines has received FAA approvals needed to conduct Hawaii services and plans to announce specific routes, fares and a launch date “in the coming days,” the airline said Feb. 27, setting the stage for a major battle in the popular market.

The Dallas-based carrier, which has its teams in place at its new markets, has indicated that its initial Hawaii flights could launch within a few weeks of gaining needed approvals.

The Extended-range Twin-engine Operational Performance Standards (ETOPS) approval clears the way for the airline to train personnel and finish preparations for its long-anticipated Hawaii service. It plans to serve Honolulu, Kahului, Kona, and Lihue from Oakland, San Diego, San Jose and Sacramento to start. It also will offer island-to-island flights within Hawaii. Operational plans call for starting with a 28-aircraft ETOPS sub-fleet of 737-800s. It plans to add 737 MAX-family aircraft eventually.

Southwest’s entry is expected to ramp up an already hotly contested market. Morgan Stanley estimates that Southwest will commit 15-20 aircraft to its Hawaii service, increasing capacity 10% in the Hawaii-North America market, and 15% within the state. The current Hawaii-mainland market is led by Chicago-based United Airlines’ 30% share, followed by Hawaiian Airlines, at 24%; Alaska Airlines, at 17%; and American Airlines, at 16%. Hawaiian’s reliance on the market and inter-island flying as a percentage of its operation renders it the most at risk, Morgan Stanley believes.

“For Hawaiian and the legacies, we believe the pressures around Southwest’s Hawaii launch are under-appreciated,” Morgan Stanley said. “For the former, the magnitude [of RASM decline] can be more severe and in the double-digits, while for the latter there is a view that these carriers are immune, which could prove overly optimistic, in our view”…

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