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Beardown91737
Posts: 896
Joined: Wed Jun 15, 2011 10:56 pm

Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 2:59 am

OzarkD9S wrote:
Its too bad WN cant work out some sort of FF deal with HA for rewards to Hawaii. Would let them focus on other things. But egos still count for something in the airline game.


They did with ATA 10 years ago on the MDW-ONT-HNL and MDW-OAK-HNL routes.
135 hrs PIC (mostly PA-28) - not current. Landings at MDW, PIA, JAN.
 
usflyguy
Posts: 1757
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 3:34 am

BravoOne wrote:
airplaneboy wrote:
BravoOne wrote:
Have to laugh at all this speculation and the mechanic bids to various stations, but for some reason none in HNL or OGG, How is that going to work?

Yes SWA is working on ETOPS, and eventually they will have it. Whether it is a smart move or not is something else.


I think it's a great idea for several reasons. Southwest carries the most number of passengers both within California- and to and from California. With a large customer base in California (which has the highest number of passengers flying to Hawaii than any other state), it's a no brainer for WN to fly there. It is currently the largest hole in their domestic network. Also, WN already has significant brand recognition amongst most local Hawaiians without having ever offered service there. The market is large enough for WN for all of these reasons- although it might be a different story for an airline like Frontier or jetBlue to enter the Hawaii market from the west coast.


Well we will see how that works out. Don't think the other airlines are simply going to roll over for the likes of SWA. Those days are long gone. SWA use to be big in the LAS-SEA market and DL/AS has pretty much ran them out. SWA on some days does not even service that market non stop. Kind of pathetic.


on what days does WN not fly LAS-SEA? The least they fly it is 2 times on Saturdays. Delta flies it 4x/day. So, no, DL/AS haven't run them out.
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
 
BravoOne
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 1:31 pm

There have been days in the last month where they have had no NS service at all. I'm an A List SWA flyer and go back and forth all the time. Don't have time to go back and look this up. Usually they only have 1 NS per day. End of story .
 
ScottB
Posts: 7073
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 3:20 pm

BravoOne wrote:
There have been days in the last month where they have had no NS service at all. I'm an A List SWA flyer and go back and forth all the time. Don't have time to go back and look this up. Usually they only have 1 NS per day. End of story .


Nope, the schedule for LAS-SEA on WN was three daily round-trips all summer (apart from Saturdays) and it's still three daily round-trips with two on Saturday.

BravoOne wrote:
I ride on SWA several times a month and can't imagine using them for a vacation to the islands . HAL, UAL, DAL would all be better choices assuming SWA was not giving their tickets away.


I'm trying to figure out what's dramatically better about the product on HA/UA/DL. UA & DL run plenty of 737s and 757s to the islands these days, and HA will soon use A321s on some routes. If you're not getting a status upgrade to domestic F or Y+, the seats aren't more comfortable on UA/DL/HA. And at least WN, for now, still offers two complimentary checked bags.

strfyr51 wrote:
I'd bet GOOD Money WN can't get there any cheaper than Hawaiian, United or Alaskan And? Were United willing to fly there with Fully Amortized A319's and A320's??
They couldn't get there as cheaply. Southwest just needs to GO and quit talking about it.. They don't have any reason NOT to Go!!


WN already has system unit costs about 15% lower than UA, and that's even in spite of larger average aircraft gauge and longer average stage lengths at UA. Sending the fully-depreciated A319s and A320s to Hawaii would be problematic in that those aircraft aren't ETOPS, so they'd have to invest in making them ETOPS (if possible), they're less efficient than the 737MAX which WN would likely use, and they might even have range issues with older A320s.

flyguy84 wrote:
Hawaii is a bloodbath. Why would they want to enter the market. I don't see much upside other than just to say they fly to Hawaii.


Pretty much every market they have entered over the last near-half-century has been claimed to be "saturated" or a "bloodbath." Sometimes they succeed (DEN, BWI), sometimes they fail (PHL). They're the market-leading carrier at seven of the ten California airports they serve. Hawaii fills in a hole for their customer base.
 
BravoOne
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 4:08 pm

Scott, there is probably nothing dramatically better and that's the problem. Same old minimal service from the same old FA's. Yes, even SWA has those old flight attendants with the attitudes to match. Not much in the way of IFE, so if you are bringing the kids you better make sure they have something to keep them busy for 51/2 hours. The whole idea of riding to and from the islands in a high density 737, even the MAX is problematic, but then thats just me. Probably so many other places they could use these aircraft that would generate more positive results to the bottom line. In case you are wondering, my 1st choice to Hawaii is HAL. They simply get it.
 
ScottB
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 5:06 pm

BravoOne wrote:
Scott, there is probably nothing dramatically better and that's the problem. Same old minimal service from the same old FA's. Yes, even SWA has those old flight attendants with the attitudes to match. Not much in the way of IFE, so if you are bringing the kids you better make sure they have something to keep them busy for 51/2 hours. The whole idea of riding to and from the islands in a high density 737, even the MAX is problematic, but then thats just me. Probably so many other places they could use these aircraft that would generate more positive results to the bottom line. In case you are wondering, my 1st choice to Hawaii is HAL. They simply get it.


Right, but I don't see WN's high-density 737-MAX 8s as being meaningfully worse than the high-density aircraft being used by other carriers -- unless you're someone with status or who purchases premium seats. A DL 737-900ER or 757 to HNL is even tighter in the economy cabin than WN's 737s, and the same will be true of HA's A321neo unless you've bought up to premium economy.

Other carriers don't seem to be abandoning the Hawaii market apart from G4, and that's more due to operational reasons -- so Hawaii is almost indubitably profitable for them. They're not serving Hawaii just for frequent flyer redemptions.
 
FlyPNS1
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 6:16 pm

BravoOne wrote:
I ride on SWA several times a month and can't imagine using them for a vacation to the islands . HAL, UAL, DAL would all be better choices assuming SWA was not giving their tickets away.


I tend to agree. I love WN for shorter 1-3 hour flights, but on longer flights WN starts to lose its appeal. WN doesn't have dedicated Y+ sections nor do they have an F class. There's a decent demand for paid F to Hawaii because it's a 5 hour flight even from the West Coast. It's the same reason why WN (despite being a behemoth in the domestic market) is a bit player in the transcon market even from their hubs.

That said, I think WN can still make Hawaii work simply because of the power of their domestic network and base of loyal customers. However, I think WN's margins will be slim compared to other competitors in the market.
 
ucdtim17
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 6:31 pm

FlyPNS1 wrote:
BravoOne wrote:
I ride on SWA several times a month and can't imagine using them for a vacation to the islands . HAL, UAL, DAL would all be better choices assuming SWA was not giving their tickets away.


I tend to agree. I love WN for shorter 1-3 hour flights, but on longer flights WN starts to lose its appeal. WN doesn't have dedicated Y+ sections nor do they have an F class. There's a decent demand for paid F to Hawaii because it's a 5 hour flight even from the West Coast. It's the same reason why WN (despite being a behemoth in the domestic market) is a bit player in the transcon market even from their hubs.

That said, I think WN can still make Hawaii work simply because of the power of their domestic network and base of loyal customers. However, I think WN's margins will be slim compared to other competitors in the market.


It would be nice if they used this as an opportunity to finally introduce a premium cabin.

Yes, fat chance I know.
 
WPvsMW
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 6:48 pm

i think an F cabin, or at least Y+, on WN is very likely ... and necessary ... to grow trans-con and start TPAC to Hawaii. All the pure Y plays to Hawaii have failed, even <daily. For business, daily is the minimum frequency. G4 is twice weekly, only from LAS, and service terminates before EOY 2017 after a 5 year run.
 
alggag
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 7:42 pm

I'm a WN flyer and I don't really see what the big deal is about flying them out to Hawaii. Seating wise I would be fine but some sort of BOB option for food would be nice, or perhaps some sort pre purchase and pick it up at the gate sort of arrangement if they don't want to actually do it on board similar to how duty free purchases are handled. I'm HOU based and it's a long way to go on a theoretical routing of HOU-OAK-HNL on just pretzels if the first leg is delayed and I have to rush over to the onward connection without an opportunity to buy a grab and go sandwich or something.

Spending that much time in a WN seat is much ado about nothing IMO but then again I've gotten used to flying TPACs in economy seats where you get the same (lack of) personal space.
 
737max8
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 10:23 pm

Wait...people calling Southwest's 737-800 and 737 MAX 8 cabin a dense configuration must be a complete joke. They have 32" pitch and 17.8" width which is near the tops of the narrow body market and the new seats on these A/C that would be going to Hawaii feel even more spacious due to the design. When it comes to space, WN's new 737-800 and 737 MAX 8 interior are exceptional.
The thoughts and opinions expressed in my comments do not represent that of any airline or affiliate.
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smithbs
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Re: Southwest to Hawaii ---- Theories

Fri Sep 08, 2017 10:29 pm

FlyPNS1 wrote:
That said, I think WN can still make Hawaii work simply because of the power of their domestic network and base of loyal customers. However, I think WN's margins will be slim compared to other competitors in the market.


:checkmark:
 
barney captain
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 7:35 am

SANFan wrote:
After reading thru the posts on this thread, I'm still hoping to get some clarification on comments made by 2 posters in the "WN Schedule Extension 8/28/17" thread: Link: viewtopic.php?f=3&t=1371077&hilit=out+WN

From reply #215 by Barney Captain posted 8/27:
"Fact - The MX personnel I have spoken to directly in the last 2 days have told me their ETOP's mx bids have been awarded - SJC, SMF and SAN."

and from reply #219 by Midwestindy, also posted on 8/27:
"According to someone who spoke with OAK mechanics about the ETOPS awards yesterday, he said 8 each going to SMF and SJC and then 20 (or may have been 24) going to SAN."

So when I see a post such as this (poster noted):
by wnflyguy » Fri Sep 01, 2017 2:13 pm

IF WN starts HAWAII in 2018.
I see a HNL being the first wave in JUNE.
Then followed by OGG in July and KOA in AUG.
For the first wave of HNL service if the Red eye issues are worked out I see a schedule like this.
LAX-HNL-LAX...

OAK-HNL-OAK...

SMF-HNL-SMF...

SJC-HNL-SJC...

That's my predictions
Enjoy Flyguy

without SAN even mentioned, I just wonder what the the ETOPS Awards mentioned earlier in this post really mean? My interpretation would be that SMF, SJC and SAN would at least be a large part of the ETOPS program, and would certainly be involved with flights to Hawaii. To the exclusion of OAK and LAX? Maybe they already have ETOPS awards? Or perhaps those airports are already bursting at the seams so WN is going to spread things out a bit? Dunno know... but sure would like to. Then perhaps I could come up with a theory about WN and Hawaii -- how and where?

bb


SAN, SMF and SJC currently are not designated mx bases, so an open bid was required as it would involve relocation.LAX and OAK are already mx locations - so no need for a bid.
Southeast Of Disorder
 
wnflyguy
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 2:47 pm

With all the devastation in the Caribbean from Irma that's definitely going to impact short term future of FLL international service for months to come. If Hawaii wasn't on the short list it probably is now. In addition 2018 will now likely see even more California focused since short term Caribbean countries were so badly damaged.

Flyguy
My Wings are clipped just another Retired Airline person. The Ultimate Armchair out of the loop airline industry geek. Aloha Mr Hand!
 
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Midwestindy
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 3:14 pm

wnflyguy wrote:
With all the devastation in the Caribbean from Irma that's definitely going to impact short term future of FLL international service for months to come. If Hawaii wasn't on the short list it probably is now. In addition 2018 will now likely see even more California focused since short term Caribbean countries were so badly damaged.

Flyguy


Only a handful of the Caribbean islands were significantly affected...
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
BravoOne
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 3:48 pm

barney captain wrote:
SANFan wrote:
After reading thru the posts on this thread, I'm still hoping to get some clarification on comments made by 2 posters in the "WN Schedule Extension 8/28/17" thread: Link: viewtopic.php?f=3&t=1371077&hilit=out+WN

From reply #215 by Barney Captain posted 8/27:
"Fact - The MX personnel I have spoken to directly in the last 2 days have told me their ETOP's mx bids have been awarded - SJC, SMF and SAN."

and from reply #219 by Midwestindy, also posted on 8/27:
"According to someone who spoke with OAK mechanics about the ETOPS awards yesterday, he said 8 each going to SMF and SJC and then 20 (or may have been 24) going to SAN."

So when I see a post such as this (poster noted):
by wnflyguy » Fri Sep 01, 2017 2:13 pm

IF WN starts HAWAII in 2018.
I see a HNL being the first wave in JUNE.
Then followed by OGG in July and KOA in AUG.
For the first wave of HNL service if the Red eye issues are worked out I see a schedule like this.

LAX-HNL-LAX...

OAK-HNL-OAK...

SMF-HNL-SMF...

SJC-HNL-SJC...

That's my predictions
Enjoy Flyguy

without SAN even mentioned, I just wonder what the the ETOPS Awards mentioned earlier in this post really mean? My interpretation would be that SMF, SJC and SAN would at least be a large part of the ETOPS program, and would certainly be involved with flights to Hawaii. To the exclusion of OAK and LAX? Maybe they already have ETOPS awards? Or perhaps those airports are already bursting at the seams so WN is going to spread things out a bit? Dunno know... but sure would like to. Then perhaps I could come up with a theory about WN and Hawaii -- how and where?

bb


SAN, SMF and SJC currently are not designated mx bases, so an open bid was required as it would involve relocation.LAX and OAK are already mx locations - so no need for a bid.



So Barney, how will SWA handle HNL & OGG as they will need ETOPS at that end as well and I'm not sure that contract maint. will pass the union or FAA smell test, BTW AC120-42C is about ready to be launched and there is a lot grumbling at the OEM level. It was posted on the net briefly but has since been removed.
 
MIflyer12
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 4:41 pm

737max8 wrote:
Wait...people calling Southwest's 737-800 and 737 MAX 8 cabin a dense configuration must be a complete joke. They have 32" pitch and 17.8" width which is near the tops of the narrow body market and the new seats on these A/C that would be going to Hawaii feel even more spacious due to the design. When it comes to space, WN's new 737-800 and 737 MAX 8 interior are exceptional.


Funny, but the dimensions given by Southwest to comply with FAA regulations on infant seat fit cite the widest 737-800 seats at 17.04 inches between the arm rests, and the narrowest at 15.54".

https://www.southwest.com/html/customer ... d-pol.html
 
usflyguy
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 6:38 pm

BravoOne wrote:
There have been days in the last month where they have had no NS service at all. I'm an A List SWA flyer and go back and forth all the time. Don't have time to go back and look this up. Usually they only have 1 NS per day. End of story .


Being an A list flyer makes you the expert on their daily schedule? No. They have 3 a day every day except for Saturday, on which there are 2 flights on Saturdays. End of story.
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
 
BravoOne
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 9:24 pm

usflyguy wrote:
BravoOne wrote:
There have been days in the last month where they have had no NS service at all. I'm an A List SWA flyer and go back and forth all the time. Don't have time to go back and look this up. Usually they only have 1 NS per day. End of story .


Being an A list flyer makes you the expert on their daily schedule? No. They have 3 a day every day except for Saturday, on which there are 2 flights on Saturdays. End of story.



Got news for you Big Boy they did not operate non stops on several days around Memorial day if can believe that. Their service sucks to SEA from LAS. I'll be on them tomorrow so I'll say hello for you and yes I am a expert on this small meaningless fact of their schedules.
 
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BMWdrvr75
Posts: 90
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 10:34 pm

[twoid][/twoid]
BravoOne wrote:
usflyguy wrote:
BravoOne wrote:
There have been days in the last month where they have had no NS service at all. I'm an A List SWA flyer and go back and forth all the time. Don't have time to go back and look this up. Usually they only have 1 NS per day. End of story .


Being an A list flyer makes you the expert on their daily schedule? No. They have 3 a day every day except for Saturday, on which there are 2 flights on Saturdays. End of story.



Got news for you Big Boy they did not operate non stops on several days around Memorial day if can believe that. Their service sucks to SEA from LAS. I'll be on them tomorrow so I'll say hello for you and yes I am a expert on this small meaningless fact of their schedules.

I am in Las Vegas based flight attendant for Southwest and we have three daily nonstops memorial weekend on Saturday and Sunday we had one because of the holiday schedule .
We Make Flying Easy......Come fly the Silver Bird........Something Special in the Air......
 
BravoOne
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 11:46 pm

Well I spent or wasted, 15,000 on SWA last year flying back and forth between these cities and your schedules and service both suck. I guess you wish you were an AA FA from your title or maybe a BMW sales person?

I think the thread drift here is detracting from the OP
 
n562wn
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Re: Southwest to Hawaii ---- Theories

Sat Sep 09, 2017 11:56 pm

BravoOne wrote:
Well I spent or wasted, 15,000 on SWA last year flying back and forth between these cities and your schedules and service both suck. I guess you wish you were an AA FA from your title or maybe a BMW sales person?

I think the thread drift here is detracting from the OP


Hmm.. And who created such thread drift spewing false information and flame bait?


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My statements do not represent my former employer or my current employer and are my opinions only.
 
phluser
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Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 12:40 am

jpetekyxmd80 wrote:
PatrickZ80 wrote:
flyguy84 wrote:
Hawaii is a bloodbath. Why would they want to enter the market. I don't see much upside other than just to say they fly to Hawaii.


I don't think so. The only American LCC that flies to Hawaii is Allegiant and that's a very limited service, the market is fairly untroubled and still for the most part in the hand of the legacies. On the other hand, Hawaii sees no less than three LCCs from the other side of the pond (Air Asia X, Scoot and JetStar). I don't call Alaska an LCC, they're a hybrid carrier.

What happens if Southwest, Spirit and Frontier take a gamble for the Hawaii market? Then the bloodbath will really start. They will make Hawaii affordable for the average American which so far it isn't. And don't tell me it's too far and therefor unprofitable for LCCs. Look at what Ryanair is doing at the Canary islands in Europe, those are mostly 4 or 5 hour flights too just like California to Hawaii and available for very cheap. If it can be done in Europe, it can also be done in America.



If you think "the Southwest effect" is relevant in 2017 you don't know much about their business these days.

And If you think you think Southwest will magically come in and make Hawaii 'affordable', you haven't been paying any attention to Hawaii. I've paid low 200s roundtrip from Bay area to Hawaii. Alaska/Hawaiian competition has been some of the fiercest in the country the last 5 years. What do you think Southwest is going to charge?? News flash: they're not cheap anymore.

How can you even compare Southwest to Frontier and Spirit? You're better off comparing United with that crowd. Makes no sense.

If you think Southwest can just swoop in to a crowded, competitive market, offer expensive benefits no one else is offering (free bags), more legroom than most competitors, and start undercutting and drastically impacting the fares in the market... well think about that. Do they have a magic wand?


To be fair to his point, he said if Southwest, Spirit and Frontier took a gamble, not just Southwest. Definitely an effect would be there even if just Southwest and Spirit.
 
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BMWdrvr75
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Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 12:44 am

BravoOne wrote:
Well I spent or wasted, 15,000 on SWA last year flying back and forth between these cities and your schedules and service both suck. I guess you wish you were an AA FA from your title or maybe a BMW sales person?

I think the thread drift here is detracting from the OP

Dude I'm not responsible for the bad service or the bad schedule flying was a college job I never quit... agreed WNs in-flight service does have to step it up but it will never happen . Agreed there are some deficiencies in the schedule. So there was no need to attack me I was just giving the facts. if you want to private message me about the bad service I would probably agree with you 100% . I would say if it wasn't for Southwest I probably would never have become a high school principal and if I wasn't for Southwest I probably never would have attended the University of Notre Dame so bad mouth them all you want they still take great care of their people.... no other company could I still continue be a flight attendant after 22 years and have a career as a principal I'm just saying .
We Make Flying Easy......Come fly the Silver Bird........Something Special in the Air......
 
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SANFan
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Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 3:54 am

barney captain wrote:
SAN, SMF and SJC currently are not designated mx bases, so an open bid was required as it would involve relocation.LAX and OAK are already mx locations - so no need for a bid.

Makes sense. Thanx for the explanation Cap'n'.

So if all 5 stations remain designated as ETOPS, then WN could very well have 5 Hawaii-gateways in CA. (And I assume both LAS and PHX have ETOPS folks on site, and if the a/c used for HI have the range, then that's even more gateway options.) Sounds like WN has lots of excellent choices available to start flights to the Islands.

bb
 
usflyguy
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Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 4:38 am

BravoOne wrote:
Well I spent or wasted, 15,000 on SWA last year flying back and forth between these cities and your schedules and service both suck. I guess you wish you were an AA FA from your title or maybe a BMW sales person?

I think the thread drift here is detracting from the OP


Someone is bitter because their company won't buy them a first class ticket on one of those better airlines with far superior schedules and service.
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
 
barney captain
Posts: 2358
Joined: Tue Nov 06, 2001 5:47 pm

Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 7:02 am

BravoOne wrote:
barney captain wrote:
SANFan wrote:
After reading thru the posts on this thread, I'm still hoping to get some clarification on comments made by 2 posters in the "WN Schedule Extension 8/28/17" thread: Link: viewtopic.php?f=3&t=1371077&hilit=out+WN

From reply #215 by Barney Captain posted 8/27:

and from reply #219 by Midwestindy, also posted on 8/27:

So when I see a post such as this (poster noted):

without SAN even mentioned, I just wonder what the the ETOPS Awards mentioned earlier in this post really mean? My interpretation would be that SMF, SJC and SAN would at least be a large part of the ETOPS program, and would certainly be involved with flights to Hawaii. To the exclusion of OAK and LAX? Maybe they already have ETOPS awards? Or perhaps those airports are already bursting at the seams so WN is going to spread things out a bit? Dunno know... but sure would like to. Then perhaps I could come up with a theory about WN and Hawaii -- how and where?

bb


SAN, SMF and SJC currently are not designated mx bases, so an open bid was required as it would involve relocation.LAX and OAK are already mx locations - so no need for a bid.



So Barney, how will SWA handle HNL & OGG as they will need ETOPS at that end as well and I'm not sure that contract maint. will pass the union or FAA smell test, BTW AC120-42C is about ready to be launched and there is a lot grumbling at the OEM level. It was posted on the net briefly but has since been removed.


I have no idea - I'm hardly in on the planning.

I also have no idea what "AC120-42C" is - but it sure sounds important.
Southeast Of Disorder
 
Balloonchaser
Posts: 287
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Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 1:58 pm

Wasnt Southwest and Frontier looking into service to SXM (TNCM) this year? I heard southwest would do a route from the Northeast (DC? ISP?) and a route from Chicago or something... Correct me if im wrong (or if you have heard different)
 
ytib
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Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 2:29 pm

barney captain wrote:
BravoOne wrote:
barney captain wrote:

SAN, SMF and SJC currently are not designated mx bases, so an open bid was required as it would involve relocation.LAX and OAK are already mx locations - so no need for a bid.



So Barney, how will SWA handle HNL & OGG as they will need ETOPS at that end as well and I'm not sure that contract maint. will pass the union or FAA smell test, BTW AC120-42C is about ready to be launched and there is a lot grumbling at the OEM level. It was posted on the net briefly but has since been removed.


I have no idea - I'm hardly in on the planning.

I also have no idea what "AC120-42C" is - but it sure sounds important.


Advisory Circular 120-42B is the current ETOPS guidelines and it sounds like this individual who mentioned 42C is saying there are some changes in the upcoming version of the AC. The current version appears to be 70 pages of fun reading.
https://www.faa.gov/documentLibrary/med ... 20-42B.pdf
318, 319, 320, 321, 332, 333, 388, 707, 717, 722, 732, 733, 734, 73Q, 735, 73G, 738, 7M8, 739, 752, 753, 742, 74L, 744, 762, 763, 772, 77L, 77W, 789, 142, CN1, CR2, CR7, DC8, DH2, DH8, D8Q, D10, D95, EM2, ER3, ER4, E70, 100, J31, M11, M83, M88, M90, SF3
 
wnflyguy
Posts: 2013
Joined: Thu Feb 10, 2011 7:58 pm

Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 2:58 pm

Balloonchaser wrote:
Wasnt Southwest and Frontier looking into service to SXM (TNCM) this year? I heard southwest would do a route from the Northeast (DC? ISP?) and a route from Chicago or something... Correct me if im wrong (or if you have heard different)


There was a tweet from the director of aviation at SXM about 6 months back that they landed WN for service in summer 2018.
But given the 95% of devastation to SXM from Irma this past week.
I wouldn't be surprised if that got pushed until 2019 now .
Same can be said for rumors of STT in summer 2018.

In a few days we will know the huge impact Irma made on Florida as a whole.
This could easily cause WN to shift plan H now vs 2019.

I wouldn't even be surprised if WN added another 2 more western cities with the California Strong fight since FL will be on the rebuilding process.

Flyguy
My Wings are clipped just another Retired Airline person. The Ultimate Armchair out of the loop airline industry geek. Aloha Mr Hand!
 
BravoOne
Posts: 4094
Joined: Fri Apr 12, 2013 2:27 pm

Re: Southwest to Hawaii ---- Theories

Sun Sep 10, 2017 8:39 pm

barney captain wrote:
BravoOne wrote:
barney captain wrote:

SAN, SMF and SJC currently are not designated mx bases, so an open bid was required as it would involve relocation.LAX and OAK are already mx locations - so no need for a bid.



So Barney, how will SWA handle HNL & OGG as they will need ETOPS at that end as well and I'm not sure that contract maint. will pass the union or FAA smell test, BTW AC120-42C is about ready to be launched and there is a lot grumbling at the OEM level. It was posted on the net briefly but has since been removed.


I have no idea - I'm hardly in on the planning.

I also have no idea what "AC120-42C" is - but it sure sounds important.



Barney AC120-42B and soon to be AC120-42C is the FAA bible for ETOPS operations. The B version is available on line now and yes it is "important" :)
 
BravoOne
Posts: 4094
Joined: Fri Apr 12, 2013 2:27 pm

Re: Southwest to Hawaii ---- Theories

Mon Sep 11, 2017 2:26 pm

I see where the FAA granted 180 ETOPS cert for the -8 MAX on Sept 9th, 2017.
 
wnflyguy
Posts: 2013
Joined: Thu Feb 10, 2011 7:58 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 12, 2017 10:52 am

Just saw this morning from a friends email the first few MAX800 all have overhead life rafts compartments. One step closer!

Flyguy
My Wings are clipped just another Retired Airline person. The Ultimate Armchair out of the loop airline industry geek. Aloha Mr Hand!
 
strfyr51
Posts: 5045
Joined: Tue Apr 10, 2012 5:04 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 12, 2017 4:19 pm

usxguy wrote:
Alaska hasn't been adding new Hawaiian markets in a while, United just upgauged a lot of flying, and you have HA adding 32B's to their fleet -- so not sure where there's much room for more growth. This might be one of WN's worst mistakes if they enter Hawai'i.


But then again? It Might NOT be a mistake. Unless one of their airplanes goes tech in Hawaii and they can't get it back to the mainland and that applies to anybody that flies to Hawaii..
 
QANTAS747-438
Posts: 1739
Joined: Mon Jan 22, 2001 7:01 am

Re: Southwest to Hawaii ---- Theories

Tue Sep 12, 2017 5:41 pm

wnflyguy wrote:
Just saw this morning from a friends email the first few MAX800 all have overhead life rafts compartments. One step closer!

Flyguy


So do 50+ of our 700s.
My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
 
737max8
Posts: 642
Joined: Thu Dec 10, 2015 4:13 am

Re: Southwest to Hawaii ---- Theories

Tue Sep 12, 2017 5:43 pm

QANTAS747-438 wrote:
wnflyguy wrote:
Just saw this morning from a friends email the first few MAX800 all have overhead life rafts compartments. One step closer!

Flyguy


So do 50+ of our 700s.


And everyone is forgetting the 737-800.

And what is the MAX800? Never heard of it. New 800 seater for Ryanair?
The thoughts and opinions expressed in my comments do not represent that of any airline or affiliate.
Flown on: 717 733 734 735 736 737 738 739 7M8 744 744ER 752 753 762 763 772 773ER 788 789 A220 A319/20/21 A332 A333 A339 A343 A346 A359 A388
 
barney captain
Posts: 2358
Joined: Tue Nov 06, 2001 5:47 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 12, 2017 8:55 pm

737max8 wrote:
QANTAS747-438 wrote:
wnflyguy wrote:
Just saw this morning from a friends email the first few MAX800 all have overhead life rafts compartments. One step closer!

Flyguy


So do 50+ of our 700s.


And everyone is forgetting the 737-800.

And what is the MAX800? Never heard of it. New 800 seater for Ryanair?


Well played..... :D
Southeast Of Disorder
 
hnl808
Posts: 50
Joined: Thu Aug 03, 2017 2:17 am

Re: Southwest to Hawaii ---- Theories

Mon Sep 18, 2017 10:52 pm

So apparently rumor is that Southwest will be possibly making the much anticipated 'Hawaii' announcement this week in Honolulu. They are the largest corporate sponsor at this week's Global Tourism Summit at the Hawaii Convention Center and are flying in a group of Southwest representatives to the summit. This is the first time Southwest has been a sponsor at this event.

Event runs from September 19 thru the 21st. Let's see what happens...

https://lasvegassun.com/news/2017/sep/13/is-southwest-getting-ready-to-start-flying-to-hawa/
 
chrisair
Posts: 2161
Joined: Fri Sep 01, 2000 11:32 pm

Re: Southwest to Hawaii ---- Theories

Mon Sep 18, 2017 11:14 pm

Assuming I could use my companion pass over to the islands, WN to Hawaii could be a very dangerous thing for me and the girlfriend. Free weekend? Let's go see friends in Maui! :D
 
ADrum23
Posts: 1789
Joined: Fri Jul 14, 2017 11:54 pm

Re: Southwest to Hawaii ---- Theories

Mon Sep 18, 2017 11:33 pm

hnl808 wrote:
So apparently rumor is that Southwest will be possibly making the much anticipated 'Hawaii' announcement this week in Honolulu. They are the largest corporate sponsor at this week's Global Tourism Summit at the Hawaii Convention Center and are flying in a group of Southwest representatives to the summit. This is the first time Southwest has been a sponsor at this event.

Event runs from September 19 thru the 21st. Let's see what happens...

https://lasvegassun.com/news/2017/sep/13/is-southwest-getting-ready-to-start-flying-to-hawa/


I don't think they will do it this week. I think they will wait until next year, when they get more deliveries and break into their new 737 MAX 8's.
 
wnflyguy
Posts: 2013
Joined: Thu Feb 10, 2011 7:58 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 3:14 am

Well this afternoon the rumors were a buzz full excitement that a few key HDQ people including GK are heading to HNL to attend the Conference and speak on the 20th at a special engagement hosted by WN.
Hopefully this all true and Hawaii finally happens.
Last rumor I heard tonight was that WN is ferrying a MAX on Tuesday night from PHX-HNL for a static media display on Wednesday the 20th.
Hopefully this is all true and Hawaii happens!

I believe everything but the Ferry flight.
But since it's not a normal flight WN could technically have Boeing pilots fly it since the MAX is now ETOPS certificate?
Please feel free to chime in on this!
Excited
Flyguy
My Wings are clipped just another Retired Airline person. The Ultimate Armchair out of the loop airline industry geek. Aloha Mr Hand!
 
77H
Posts: 1570
Joined: Mon Sep 19, 2016 11:27 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 4:14 am

hnl808 wrote:
So apparently rumor is that Southwest will be possibly making the much anticipated 'Hawaii' announcement this week in Honolulu. They are the largest corporate sponsor at this week's Global Tourism Summit at the Hawaii Convention Center and are flying in a group of Southwest representatives to the summit. This is the first time Southwest has been a sponsor at this event.

Event runs from September 19 thru the 21st. Let's see what happens...

https://lasvegassun.com/news/2017/sep/13/is-southwest-getting-ready-to-start-flying-to-hawa/


It will be interesting to see what they have in store for the event. I found it interesting that the article you posted states that WN probably won't impact fares much, contrary to the beliefs of many.

I personally can't see them having more than a token presence at any of the big 4 Hawaiian Airports.

Firstly, there just isn't much gate space to be had period at HNL, especially at the times of day WN is most likely to operate. Secondly, airlines like HA and UA have already announced large service increases to the big 4 airports which will take effect long before WN starts service. AA and DL have also implemented service increases on a smaller scale. If WN is a threat to any airline it would be AS as WN is likely to target almost every CA airport AS currently has service from. That being said, AS has is a strong player in CA as is and only growing the the VX merger. They also have a strong following in HI now.

77H
 
hnl808
Posts: 50
Joined: Thu Aug 03, 2017 2:17 am

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 6:46 am

wnflyguy wrote:
Last rumor I heard tonight was that WN is ferrying a MAX on Tuesday night from PHX-HNL for a static media display on Wednesday the 20th.
Hopefully this is all true and Hawaii happens!

I believe everything but the Ferry flight.
But since it's not a normal flight WN could technically have Boeing pilots fly it since the MAX is now ETOPS certificate?
Please feel free to chime in on this!
Excited
Flyguy


All eyes on flightradar! If this ferry flight actually occurs looks like we will know in less than 24 hours.
 
barney captain
Posts: 2358
Joined: Tue Nov 06, 2001 5:47 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 7:32 am

wnflyguy wrote:
Well this afternoon the rumors were a buzz full excitement that a few key HDQ people including GK are heading to HNL to attend the Conference and speak on the 20th at a special engagement hosted by WN.
Hopefully this all true and Hawaii finally happens.
Last rumor I heard tonight was that WN is ferrying a MAX on Tuesday night from PHX-HNL for a static media display on Wednesday the 20th.
Hopefully this is all true and Hawaii happens!

I believe everything but the Ferry flight.
But since it's not a normal flight WN could technically have Boeing pilots fly it since the MAX is now ETOPS certificate?
Please feel free to chime in on this!
Excited
Flyguy


I don't know if the MAX is ETOPS yet or not - but I believe that's not required for a Part 91 ferry flight.
Southeast Of Disorder
 
WPvsMW
Posts: 2252
Joined: Thu Mar 23, 2017 7:30 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 10:21 am

Ferry flights are under FAR Part 91, while ETOPS is required under Parts 121 and 135.
https://www.faa.gov/other_visit/aviatio ... o07004.pdf
so... If WN pulls a Special Flight Permit... ETOPS does not apply.
 
bbcmeng
Posts: 10
Joined: Sat Jun 13, 2015 4:43 am

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 2:08 pm

Also, this week is "Spirit Week" where employees recognize the hospitality they show to their passengers. Each day is a theme with Wednesday being Hawai'i Day where employees can wear Hawai'i style clothing.

Even though I do not feel WN is ready for this leap, many ducks are lined up pretty straight!
 
SeaTran
Posts: 63
Joined: Sat Aug 06, 2005 11:15 am

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 2:55 pm

Crash Ahead For Hawaiian Airlines Stock: Southwest Market Entry May Be Imminent

https://seekingalpha.com/article/410745 ... y-imminent

FOIA requests reveal emails discussing Southwest "corporate announcement" and coordination with Hawaii government.

Announcement may have been scheduled for two weeks ago.

Southwest's entry into Hawaii market could cause HA's earnings to fall dramatically.

Seeking Alpha PRO subscribers received early access to this article

(The author wishes to emphasize their Disclaimer. Please see the bottom of this article)

Hawaiian Airlines' (HA) stock has been on an amazing tear over the past few years, appreciating nearly 7x since the beginning of 2013. EBIT margins, which averaged 4.7% in the ten-year period from 2004 to 2013, skyrocketed to 19.5% in 2016 driven by constrained supply and high demand in the Hawaiian market coupled with a dramatic drop in fuel prices.

HA stock price (Jan 2013 – present)



Source: Bloomberg

HA EBIT margins (2004-2016)



Source: HA, Bloomberg

One of the reasons that Hawaiian Airlines has enjoyed such robust profitability in recent years has been the notable lack of competition from Southwest Airlines (NYSE:LUV) (the largest carrier in California and one of the largest on the US West Coast).

Southwest is known for its low fares and for the disruption it typically causes for competing carriers. When Southwest enters a market, fares and profitability often collapse for incumbent airlines1.

Despite Southwest CEO Gary Kelly announcing on their Q2 2017 earnings call that their entry into the Hawaiian market was a “when” and not “if” question2, analysts – even skeptical ones – seem to dismiss the threat as either small or far in the future. Even recently bearish Stifel, in their July 28 upgrade of HA from “Sell” to “Neutral,” wrote the following (emphasis added):3

“Southwest Risk Still Out There But Not a Huge Concern. We actually found Southwest's commentary today on its call regarding plans for Hawaii as bullish for Hawaiian as we sensed a lack of urgency from CEO Gary Kelly to enter Hawaii. While he made it clear that it's a question of when, not if, Southwest starts flying to Hawaii, it certainly seems unlikely for next year. Further, given the moderate pace with which Southwest has built out its international network, we would expect a similar approach to Hawaii. Lastly, the outlook for competitive capacity increasing into Hawaii and the likely impact from that on fares over the next 12 months will make the market incrementally less attractive to Southwest, in our view.”

– Stifel (7/28/2017)

Unfortunately for HA supporters, we have uncovered government documents that, in our opinion, highlight that Southwest’s entry into the market is likely imminent and may be announced shortly. We believe Southwest’s “Hawaii” team was in Hawaii mere weeks ago meeting with key constituencies. We even have recent emails between Southwest’s spokesperson and the Hawaii Governor’s office discussing the hiring of luau dancers for a “corporate announcement.” We think the only reason that Southwest’s entry hasn’t already been announced is due to Hurricane Harvey. Based on this, we think the “Goldilocks” period that HA has enjoyed is near an end, and that margins and earnings are poised to decline precipitously in the near term.

We believe:

Southwest likely will enter the Hawaiian market by 2018, and a formal announcement could come at any time.
Southwest’s entry likely will cause US to Hawaii yields to collapse.
HA’s margins and earnings likely will fall dramatically due to intense competitive pressures from Southwest, United Airlines (NYSE:UAL) and Island Air, among others.
Aggressive insider selling may indicate that management also thinks the end is near.
As a result of the above, we think that HA earnings could easily fall to $3 per share or less (vs. current 2017 consensus of $5.55). If the stock traded at its ten-year historical average forward P/E multiple of 7.5x, it would be worth c. $20-22 per share, or almost 50% below its current trading price.

We believe that Southwest is likely to enter the Hawaiian market by 2018, and a formal announcement could come at any time

We believe that we have uncovered convincing evidence that Southwest is likely to enter the Hawaiian market and that it will make a public announcement soon. Our evidence is as follows:

Recent and increasing correspondence between Southwest, the Hawaii Tourism Authority, and the Hawaii Governor’s office discussing market entry.
Southwest appears to have a dedicated Hawaii team.
That Hawaii team traveled to Hawaii earlier this year and dined with the Governor of Hawaii, the CEO of Hawaii Tourism USA and the Chairman of the Hawaii Tourism Authority.
Communications staff (e.g. spokespeople) for Southwest appear to be currently coordinating a confidential “corporate announcement” event involving the Governor, Southwest executives and luau dancers.
Through Freedom of Information Act (FOIA) requests, we have obtained correspondence between the Hawaii Tourism Authority [HTA], the Hawaii Governor’s office and Southwest Airlines that could indicate Southwest plans to enter the Hawaii market in short order.

Below is a screenshot of a May 8, 2017 email from Randy Baldemor, the Chief Operating Officer of the HTA, to Mike McCartney, the Chief of Staff to the Governor of Hawaii, introducing him to Jose Luis Sanchez and Brad Hawkins. Mr. Sanchez and Mr. Hawkins are both representatives of Southwest Airlines.



Source: FOIA request to Hawaii Tourism Authority [HTA]

Mr. Sanchez is introduced in the above email as “Southwest’s Senior Director of Governmental Affairs,” whereas Mr. Hawkins’ LinkedIn profile indicates he is “Senior Advisor | Communication” for Southwest4.

Mr. Hawkins’ presence alone on the email exchange may indicate that an announcement from Southwest could be near. We have identified numerous recent occasions where Mr. Hawkins acted as the public spokesman for Southwest5. Mr. Hawkins’ background before Southwest was as a television anchor. We can think of no other reason Mr. Hawkins would be included in these communications other than because he will be participating in an announcement by Southwest that they are entering the Hawaii market.

People (including us) have been on the lookout for any tangible evidence of Southwest’s entry into the Hawaiian market for some time. In a relatively efficient market, this raises an interesting question: why was this important correspondence not identified until now?

We have been searching (primarily via FOIA request) for tangible evidence of Southwest’s entry for many months and, until now, have come up empty. The May 8, 2017 email cited earlier is the first confirmatory evidence we have received.

After receiving this “hit”, we started thinking that there could be other correspondence between Southwest and the HTA that has not been identified in response to FOIA requests. Notably, the Southwest representatives on the email did not use “southwest.com” email addresses — as one might expect — but instead used “wnco.com” email addresses. “WN” is Southwest Airlines’ International Air Transport Association (IATA) identifier6. We conducted a WHOIS request on “wnco.com,” and it clearly shows that the domain is controlled by Southwest7.



Source: ICANN

We doubt that a random government employee tasked with a FOIA request like ours which sought correspondence between the HTA and Southwest would know to check for emails to and from people from the “wnco.com” domain. Even the word “southwest” might not be flagged because it is overly generic. Perhaps the only reason why the initial email we obtained was flagged was that the title of the email was “Southwest Airlines.”

The next step in our research process was obvious: we filed new FOIA requests for communications involving the “wnco.com” domain. These new requests revealed dozens of recent meetings, calls and messages between Southwest, the Hawaii Tourism Authority and the Hawaii Governor’s office. This new information dramatically increases our conviction that Southwest likely will enter Hawaii imminently.

While our original “hit” showed that the first communication between Southwest and Hawaii was in May 2017, it appears that discussions began to accelerate as early as eight months before, in September 2016, after the HTA hosted an Airline Summit attended by Southwest (i.e., discussions appear to have been ongoing for at least a year).

In an October 3, 2016 email, Mr. Hawkins seems particularly thrilled with what was learned at the conference, writing that “It was eye-opening for our team to consider how much of our ‘standard’ playbook could become helpful in a very non-[standard] market.”



Source: FOIA request to Hawaii Tourism Authority

Emails from Mike Sikes (Southwest’s Senior Manager for Commercial Initiatives) are even clearer about Southwest’s intentions. His October 8, 2016 email thanks Randy Baldemor and Noriko Sloan (HTA executives) for a “one on one chat” and says that they will reach out “once we have a better sense of timing of Southwest Airlines operational readiness.” Note that Mr. Sikes does not talk about if Southwest is entering the market, just when they will do so.



Source: FOIA request to Hawaii Tourism Authority

An earlier September 20, 2016 email from Mr. Sikes to Ms. Sloan also expresses this sentiment. He requests an additional meeting slot for Mr. Hawkins to “allow him to start developing our communications message and style for when we are ready to enter the market.” Again, there is no if just a when.



Source: FOIA request to Hawaii Tourism Authority

Mr. Baldemor responds to the Southwest team, thanking them for their “interest in our destination” and the “thorough manner in which you are evaluating possible service here.”



Source: FOIA request to Hawaii Tourism Authority

Emails from February 2017 suggest that conversations progressed further, including a meeting at the Routes Americas conference between Mr. Baldemor, Steven Swan (Southwest’s Senior Director of International Planning and a former employee of Hawaiian Airlines) and Carter Ganss (Southwest’s Senior Director of Business Development) and discussions regarding the drafting of a non-disclosure agreement (NDA) by the HTA. Mr. Baldemor also offers to introduce the Southwest team to the Governor’s office.



Source: FOIA request to Hawaii Tourism Authority

In March 2017, Mr. Ganss responds to Mr. Baldemor and indicates that Southwest already has a team in place for Hawaii. Specifically, he says that Southwest will bring a team of 5-6 people to the HTA Spring Marketing Update, that this team is “directly responsible for execution of Hawaii operations” and wants to “begin building relationships” with “key contacts” in Hawaii. (emphasis added.)



Source: FOIA request to Hawaii Tourism Authority. Formatting is slightly modified for presentation purposes.

The dinner that is casually referenced in the previous email turned out to be a blockbuster. A March 29, 2017 email from Mr. Baldemor provides the guest list for the dinner with the Southwest team. In this email, we learn that the Governor of Hawaii, David Ige, attended the dinner, in addition to many other key players, including: the Chairman of the HTA, the CEO of Hawaii Tourism USA, and the Governor’s Chief of Staff.



Source: FOIA request to Hawaii Tourism Authority

The correspondence continued in May 2017, where Mr. Hawkins refers to the previous dinner in Waikiki and asks Mr. Baldemor to introduce Mr. Sanchez to Mr. McCartney as Southwest continues to “map the landscape” of the Hawaiian market.



Source: FOIA request to Hawaii Tourism Authority

The above email references a person named “Andrew” who attended the dinner with Mr. Hawkins, Mr. Sikes and Mr. Ganss. We believe that this “Andrew” may in fact be Andrew Watterson, who is one of Southwest’s most senior executives and currently serves as Chief Revenue Officer. Before joining Southwest in 2013, Mr. Watterson was the Vice President of Planning and Revenue Management for Hawaiian Airlines8. We hypothesize that Mr. Watterson would know quite a bit about the Hawaii market.



Source: LinkedIn page for Andrew Watterson

Recently (July 2017), conversations appear to have meaningfully accelerated. On July 6, 2017, we get the first hint that Southwest may be planning to announce entry into the Hawaiian market.

Laura Nieto (Southwest’s Director of Community Affairs & Grassroots) sends an email to Kalani Kaanaana (HTA’s Director of Cultural Affairs) and tells Mr. Kaanaana that she “will be working alongside our Team as planning gets underway.” Ms. Nieto also alludes to a potential near-term event, writing that she hopes “we can coordinate an introductory meeting … as we do a site visit and discuss technical and cultural needs for our planned event.” Ms. Nieto then states that she and Mr. Hawkins will be in Hawaii beginning on July 23.


Source: FOIA request to Hawaii Tourism Authority

On July 10, 2017, through an email from Mr. Sikes to Mr. Baldemor, we learn that the Governor’s office has been involved in conversations and that “[t]hings are moving forward nicely.” We further learn that the communication teams are coordinating “future events.” Mr. Sikes then asks for a meeting with John Monahan, the President & CEO of the Hawaii Convention Visitors and Convention Bureau, as “per the Governor’s wish to keep both entities involved and aligned.”



Source: FOIA request to Hawaii Tourism Authority

We must confess that we have buried the lead in our report. What “future events” are referred to in the above email? A July 6, 2017 email from Mr. Hawkins to Cindy McMillan (Communications Director for the Hawaii Governor) highlights, in great detail, a large event that seems to be planned for the near future that involves the Governor, Southwest executives, the media and luau dancers!



Source: FOIA request to Hawaii Governor’s office

While the emails we received contained no exact date of the “corporate announcement” or “planned event,” we believe that a clue in the above email allows us to triangulate. In fact, we believe the event was supposed to occur over two weeks ago — in late August 2017.

Note that Mr. Hawkins’ July 6, 2017 email says that “your local sunrise that day is 6:14am.” In Honolulu, the only remaining dates in the year that have 6:14 am sunrises were August 28th through August 30th (9).



Source: FOIA request to Hawaii Governor’s office

We think that this indicates the announcement would have already been made had Hurricane Harvey not impacted the timing (it hit Southwest’s home state of Texas on August 25). We think that, now that the dust is settling from Harvey, that the announcement could happen at any time.



Source: CNN

To recap, as of late 2016, Southwest had expressed interest in entering the Hawaiian market but those conversations seemed preliminary. They appear to have sent a team to the HTA Conference in Hawaii, but that’s about it. In February and March 2017, things appear to begin to gain momentum, with a meeting at the Routes Americas conference, dinner with the Governor and a larger Southwest team sent to the HTA Spring Marketing Update. In July 2017, things appear to notably accelerate, with a confirmation that planning is getting underway, a Southwest team arriving in Hawaii for meetings, coordination with the Governor’s office, a “corporate announcement” planned and key involvement of spokespeople from Southwest and the HTA. We think the writing is on the wall and the evidence is clear: Southwest’s entry to the Hawaiian market appears imminent.

It is possible that Southwest’s announcement timeline will have to be accelerated with the publication of this report. Previously, we obtained (via FOIA request) a similar chain of correspondence that occurred between Virgin America Airlines (NASDAQ:VA), the HTA and the Hawaii Governor’s office in March 2015, shortly before Virgin America announced that they were entering the Hawaiian market. Those emails between Virgin America and the HTA indicate concern about the news of Virgin American's market entry leaking. The HTA advised that the news could “get picked up by the media prior to the announcement” if the application for the startup of service to the Hawaii Department of Transportation was submitted prior to the formal announcement of service.



Source: FOIA request to Hawaii Tourism Authority


Southwest’s entry into the Hawaii market will cause yields to collapse, in our opinion

Airline industry experts are well aware of a phenomenon known as the “Southwest Effect,” a term first used by the Department of Transportation in 1993. The “Southwest Effect” tends to lead to increases in travel and lower ticket prices. In our opinion, the most important impact of the “Southwest Effect” in Hawaii is that it tends to lead to a dramatic reduction in fares, given that we believe travel demand to Hawaii is relatively inelastic (so passengers are unlikely to increase much). We also note that – with high load factors at HA – yield reductions are likely to have a much greater impact on profitability than any potential offset from increased traffic.

We think that Southwest could easily add at least ten daily flights to Hawaii, to start with. Southwest has large market share in key HA markets of Los Angeles, San Francisco, Oakland, San Jose, Las Vegas, Phoenix, San Diego and Seattle. To illustrate the ease: two flights per day out of Los Angeles, San Francisco and San Jose plus one out of Oakland, Las Vegas, Phoenix, San Diego, Seattle and Portland would sum to twelve flights per day. We believe impact could be particularly great in markets where Southwest has large overall share and HA has large share of US to Hawaii (e.g. Las Vegas, Oakland, Phoenix, San Diego and San Jose).



Source: Diio

In the Hawaii market, there has historically been a tight correlation between changes in load factor and changes in Passenger Revenue per Available Seat Mile (PRASM) (note that HA stopped disclosing US yield in 2015).



Source: HA, HTA, Diio, our estimates

We assume that Southwest adds ten flights per day beginning in mid-2018. Based on this assumption, announced capacity increases from United Airlines, and commentary from other carriers, we think US to Hawaii capacity will increase 10.9% in 2018, and cause HA’s load factor to fall 6.4% in 2018. Based on historical data and our estimates, HA’s PRASM would fall 10.6% in 2018 in such a scenario (red square in chart below).



Source: HA, HTA, Diio, our estimates

Our assumptions may still be too conservative. We reviewed several academic studies that suggest the “Southwest Effect” could have a much greater impact than we currently model.

Study #1: Airlines cut fares dramatically before Southwest enters and continue to reduce fares thereafter

A 2005 study by University of Chicago professors Austan Goolsbee and Chad Syverson published in The Quarterly Journal of Economics suggests that the mere threat of Southwest’s entry into a market causes fares to fall by 24% and that fares fall by 21% once Southwest enters the market and continue falling by “over 29%” by the end of the observation period10.





Source: National Bureau of Economic Research

Study #2: 24% drop in fares when Southwest enters

John Kwoka, an Economics Professor at Northeastern University, found that the presence of Southwest caused a 24% drop in legacy airline fares in 2009-201011.



Source: Bentley University, Fusio


Study #3: Fares are ~20-25% higher without Southwest

An honors thesis by Christine Wang at Northwestern University found that the presence of Southwest on certain routes impacted ticket prices by 20-25%12.



Source: Northwestern University

Despite this academic evidence suggesting our estimates may be overly conservative, our EPS estimate of $2.75 is more than 50% below the current 2017 Bloomberg consensus EPS estimate of $5.72.

HA has historically traded at a forward P/E multiple of 7.5x over the past ten years.



Source: Bloomberg

If we assume an average multiple of our estimated post-Southwest earnings, HA would be worth just $20-22, or 44-48% below the current share price.



Source: Bloomberg, our estimates

While the earnings decline we predict may seem dramatic, we highlight the following counterarguments:

The implied EBIT margin of 11.5% is more than double HA’s long-term average EBIT margin of 4.7%.
$2.75 would represent the fourth-best year ever of earnings for HA.
We assume Southwest stops at 10 flights per day. As illustrated above, the number of flights and the impact on fares could easily be much worse.
Our price target is almost 2.5x the price the shares traded for as recently as December 2013.
In our view, the situation could (and maybe will) be much worse than we project.

Insider selling may support our concerns

Key HA insiders have been aggressively reducing their holdings of HA over the past couple of years, led by CEO Mark Dunkerley. Since the beginning of 2015, Mr. Dunkerley has reduced his share ownership by a whopping 67%, from 833k shares to 272k shares. He has been joined in his selling by Chief Commercial Officer Peter Ingram (-38% since the beginning of 2015), Chief Administrative Officer Ronald Anderson-Lehman (-27% since the beginning of 2016), and SVP of Human Resources Barbara Falvey (-22% since the beginning of 2015).
 
allegiantflyer
Posts: 366
Joined: Mon Mar 12, 2012 6:59 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 6:06 pm

I wasn't expecting WN to announce anything to Hawaii for atleast a year, but it appears this speed up was likely a response to AS beefing up in California,WN wants to hurt the little guy AS. However it could end up backfiring, it is starting to sound like WN is seriously underestimating the following AS has on the islands. But WN fanatics have been crying "Hawaii" for the past 15 years I'm so glad we will not have to hear about that anymore, now for the next 15 years we will see "Rumor: WN to fly to Australia" on the forum
 
flydulles
Posts: 122
Joined: Mon Aug 01, 2016 3:59 pm

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 6:24 pm

wonder where they will serve out of hawaii? san diego?
 
usflyguy
Posts: 1757
Joined: Thu Jan 12, 2012 7:29 am

Re: Southwest to Hawaii ---- Theories

Tue Sep 19, 2017 7:04 pm

flydulles wrote:
wonder where they will serve out of hawaii? san diego?


SMF, SJC, OAK, LAX, SAN...
My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.

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