Southwest Airlines Co. is finally going to start flying to Hawaii, and a top executive says ticket prices will get cheaper.
Flights to the state will begin next year or in 2019, the discount carrier said Wednesday. The initial service will be from California, said Chief Revenue Officer Andrew Watterson, without elaborating on specific routes.
“We see prices higher than they need to be and we anticipate lowering fares,” Watterson said in an interview.
Southwest is adding Hawaii to its network—after years of requests from travelers and employees—with help from Boeing Co.’s upgraded 737. The latest version of the planemaker’s best-selling jet, the 737 Max, can fly farther and is more fuel efficient than older models. Southwest this month became the first North American airline to fly the new model.
“For us, it’s the perfect fit for Hawaii,” Watterson said. “The Max has got 14 percent better range and 14 percent better fuel burn” than the airline’s 737-800 planes.
A new reservation system that allows for more complicated itineraries and overnight trips is also enabling Southwest to add Hawaii flights. The Dallas-based airline will begin seeking federal approval to operate its planes on extended over-water routes in the coming weeks. That process typically takes about a year to 18 months and flights to Hawaii can’t begin until it’s completed.
Tickets will go on sale next year, Southwest said in a statement. Even if Hawaii flights start in 2018, they won’t alter fleet or capacity plans for the year, the company said.
The new service will test whether Southwest, long known for short routes, can compete against larger carriers on flights that take more than five hours from the U.S.’s West Coast. While some rivals offer premium cabins with roomier seats, full meals and more legroom, Southwest’s no-frills service is all coach class. The carrier serves only snacks.
“We don’t see Southwest having success in Hawaii due to an inferior product and an already crowded marketplace,” Hunter Keay, a Wolfe Research analyst, said in a note to clients this week, in which he speculated on potential service. “We expect Southwest will bleed margins here for a couple years before scaling back or exiting outright.”
Watterson said Southwest will be ready to compete for passengers flying in coach. The airline already adjusts snack offerings based on flight duration, such as its service from Oakland, California, to Baltimore/Washington International Thurgood Marshall Airport. That route is longer than Oakland to Maui, Hawaii, said Watterson.
On other carriers, “most people won’t have lie-flat seats, most people won’t get a hot meal,” he said. “Most people are flying economy and our economy product is spot on.”