Is Hawaiian Feeling the Heat From United, Southwest?

Photo: Hawaiian Airlines

With Hawaiian Airlines’ brand and livery updates, as well as new services, new airplanes on the way, and stellar on-time stats, flyers may think the airline has nothing to worry about in terms of competition. However, could larger airlines sweep in unnoticed and take a large chunk of the niche provider’s profit?

Just this month, United Airlines announced increased service on 11 routes connecting the continental United States and Hawai’i, making it now the airline with the most flights between the mainland and Islands. Starting Dec. 20, United will increase service to Hawai’i from Chicago, Denver, Los Angeles and San Francisco. It also will maintain current nonstop service from other destinations, including Houston; Newark; Washington, D.C.; Guam; and Tokyo. In addition to increased service that allows travelers to access a new selection of Hawaiian cities other than the current United destination of Honolulu, the airline is also offering new in-flight amenities, including 180-degree flat-bed seats on flights originating in Chicago, Denver, Houston, Newark and D.C.

It’s only expected that United’s loyal following will keep on booking the airline all the way to Hawai’i, but other travelers, particularly those within the budget-travel realm, may be looking to another new airline to fulfill their needs. Southwest Airlines has been looking at the Hawaiian market for a while now, but just recently announced the market as higher priority. It’s expected the budget airline will send its latest Boeing 737-800s and the 737 MAX 8 to Hawai’i, as it simultaneously begins retiring some of its older aircraft. However, while United is more of a pressing threat to Hawaiian Airlines, the Southwest threat is more longterm in nature, as the airline may not even launch flights to the Islands until later this decade.

Despite all this, Hawaiian Holdings, the parent name for Hawaiian Airlines, has seen market jumps thanks to airfare pricing and cheaper fuel, something investors should be pleased with. According to Cowen analyst Helane Becker, “Hawaiian continues to benefit from modest competitive capacity growth in their most important market, which is the U.S. West Coast to Hawai’i.” Additionally, rumors have been spreading of a potential Hawaiian-JetBlue merger, though the benefits for JetBlue seem to be small. Other aviation experts speculate an upcoming transaction similar to the Virgin American/Alaska deal.

Only time will tell if Hawaiian Airlines will feel significant pain from the United service expansion and Southwest’s impending market entrance. One thing, however, is for sure — with increased competition between airlines comes increased benefits for travelers in a leisure oriented marketing, as they can take advantage of better airfare deals and more amenities from airlines fighting for a much-coveted consumer base.