Isle air­ports have space for South­west, state says

Honolulu Star-Advertiser - - BUSINESS - By Dave Se­gal dse­gal@starad­ver­tiser.com

Hawaii is rolling out the red car­pet for South­west Air­lines.

A state Depart­ment of Trans­porta­tion of­fi­cial said Thurs­day the pre­vi­ous day’s an­nounce­ment that South­west would be­gin sell­ing tick­ets to Hawaii next year “is al­ready gen­er­at­ing tremen­dous ex­cite­ment,” DOT spokesman Tim Saka­hara said.

“There is ca­pac­ity at our air­ports to ac­com­mo­date ad­di­tional car­ri­ers,” he said. “We will work with the new air­line to ac­com­mo­date its lo­gis­ti­cal needs as it pre­pares to launch ser­vice next year. Adding a ma­jor air­line to the Hawaii mar­ket will bring ad­di­tional choices for res­i­dents and vis­i­tors and is an­tic­i­pated to gen­er­ate ad­di­tional rev­enue for the state.” South­west Chief Rev­enue Of­fi­cer An­drew Wat­ter­son said Wed­nes­day that the Dal­las-based car­rier likely will be­gin ser­vice from just one city ini­tially af­ter ob­tain­ing ETOPS cer­ti­fi­ca­tion from the Fed­eral Avi­a­tion Ad­min­is­tra­tion. That cer­ti­fi­ca­tion in­cludes the air­line mak­ing “prov­ing runs” from the main­land to Hawaii so that the FAA can de­ter­mine whether the com­pany’s new air­plane, the Boe­ing 737 MAX 8, is ca­pa­ble of op­er­at­ing and main­tain­ing func­tions in case of an emer­gency while over water and more than two hours from land. “Usu­ally with the FAA process you start off with one city and it al­lows the FAA to re­view your pro­ce­dures and equip­ment and your peo­ple to make sure ev­ery­thing is done prop­erly,” he said. “Once you have that au­tho­riza­tion, you move to add ex­tra cities and routes, and that would be our ap­proach.” Wat­ter­son said “it would be nat­u­ral for us to fly the ma­jor­ity of our flights from Cal­i­for­nia” since the car­rier is the largest air­line in that state.

“For longer flights we tend to fly once or maybe twice a day,” he said. “For shorter flights, we’re known for hav­ing mul­ti­ple fre­quen­cies.” Air­line an­a­lyst Hunter Keay of New York-based

There is ca­pac­ity at our air­ports to ac­com­mo­date ad­di­tional car­ri­ers.” Tim Saka­hara Depart­ment of Trans­porta­tion spokesman

Wolfe Re­search wrote in an Oct. 6 re­search note that us­ing 30 prior South­west route an­nounce­ments and U.S. Depart­ment of Trans­porta­tion data as a guide that he is guess­ing South­west will launch six routes to Hawaii with once-daily ser­vice. His pro­jected city pair­ings are Los An­ge­les, Oakland, San Diego and Phoenix to Honolulu and/or Maui. All six routes would over­lap with Hawai­ian Air­lines, he wrote. But Keay, spec­u­lat­ing ahead of South­west’s an­nounce­ment, wrote that he doesn’t see South­west suc­ceed­ing in Hawaii be­cause — among sev­eral things — it lacks the on-board prod­ucts to com­pete in Hawaii against air­lines that are larger and of­fer a full-ser­vice op­tion for higher in­come Hawaii va­ca­tion­ers. He also said South­west’s “bags fly free” pol­icy could cre­ate turn­around time headaches since an es­ti­mated 68 per­cent of pas­sen­gers to Hawaii check bags, and that there could be po­ten­tial ser­vice problems if bags are lost. He also said there could be lots of pas­sen­gers re­deem­ing fre­quent flier points to travel to Hawaii, which could dis­rupt South­west’s pric­ing.

“It’s per­haps safe to say (South­west) may grow there ini­tially and not grow too much there­after, if his­tory is a guide,” he wrote. “We be­lieve (South­west) will dis­rupt (Hawai­ian Air­lines) for a short pe­riod of time be­fore pulling back or even aban­don­ing ser­vice to Hawaii al­to­gether af­ter fail­ing to gain trac­tion there.” South­west’s stock rose 26 cents, or 0.4 per­cent, to $58.81 on Thurs­day. Shares of Hawai­ian Air­lines, which will be fac­ing added com­pe­ti­tion, fell $1, or $2.50, to $39.

BRUCE ASATO / BASATO@STARAD­VER­TISER.COM

Be­fore South­west’s an­nounce­ment that it would be­gin Hawaii ser­vice, an an­a­lyst had pre­dicted the car­rier would of­fer six daily flights to the islands, but might even­tu­ally re­trench af­ter fail­ing to gain trac­tion in the mar­ket. Above, a model of the plane South­west would fly to Hawaii was dis­played at its Wed­nes­day event.

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