Hawaii/Mainland service

[Dan Roman]

Seeing as some SWA folks were crowing about coming to Hawaii......

http://www.bizjournals.com/pacific/blog/2013/08/hawaiis-not-attractive-market-to.html

Guess not. There was a debate on here awhile ago on this subject and some thought low fares trump good service (Hawaiian, despite lower seat mile costs, actually gets a slightly higher yield from tickets than the competition). As Allegiant proved, low fares do not guaranty success , they got their ass handed to them in Hawaii.
Hawaii is simply not a market that you can offer low fares and presto, be successful.

 

[redflyer65]

Wow Dan. You're starting to sound like the General.


Very old news. Your article is two months old to begin with and Southwest corporate decision to hold off on Hawaii pre-dates that article by 2-3 months, easily.

Gary has said we will go to Hawaii. He said he won't make any further statements beyond that until he makes the announcement of new service. Just so you have some solid SW info.

 

[Dan Roman]

Wow Dan. You're starting to sound like the General.
.

How the hell did you find out about our OGG to LUB service!??? That's supposed to be a secret!

Your being very sensitive there Red. We needed some new threads on here and I am simply pointing out some harsh realities about the west coast to Hawaii market. It would be an expensive proposition for SWA to come here and with 737's they would be at a competitive disadvantage. Alaska has filled the void there for routes were the 737 can fly and have scaled that back as that market has been saturated. Hawaiian will be introducing A321 neos also. So the simple fact is SWA would be fighting a big battle for a small piece of pie. Finally, the current SWA type service simply would probably not do that well to Hawaii. Not a slam, you have a great following on the mainland for what you provide, but the Hawaii market is, in fact different. For example, People are not likely to want to leave their flight to Hawaii as being something that they have to board early to get a good seat on. So far quite a few airlines have offered all coach cheap flights to Hawaii over the years, they have all failed. Also, SWA only has one hub that you could reach Hawaii from with a profitable passenger load, OAK. LAS and PHX are too far for a 737.

 

[dalad]

Wow Dan. You're starting to sound like the General.


Very old news. Your article is two months old to begin with and Southwest corporate decision to hold off on Hawaii pre-dates that article by 2-3 months, easily.

Gary has said we will go to Hawaii. He said he won't make any further statements beyond that until he makes the announcement of new service. Just so you have some solid SW info.

You better figure out how to fly to the Caribbean Lake. Filing Havana as an alternate? Really?

 

[redflyer65]

How the hell did you find out about our OGG to LUB service!??? That's supposed to be a secret!

Your being very sensitive there Red. We needed some new threads on here and I am simply pointing out some harsh realities about the west coast to Hawaii market. It would be an expensive proposition for SWA to come here and with 737's they would be at a competitive disadvantage. Alaska has filled the void there for routes were the 737 can fly and have scaled that back as that market has been saturated. Hawaiian will be introducing A321 neos also. So the simple fact is SWA would be fighting a big battle for a small piece of pie. Finally, the current SWA type service simply would probably not do that well to Hawaii. Not a slam, you have a great following on the mainland for what you provide, but the Hawaii market is, in fact different. For example, People are not likely to want to leave their flight to Hawaii as being something that they have to board early to get a good seat on. So far quite a few airlines have offered all coach cheap flights to Hawaii over the years, they have all failed. Also, SWA only has one hub that you could reach Hawaii from with a profitable passenger load, OAK. LAS and PHX are too far for a 737.

Sensitive? Not really. Just calling an old decision by Southwest just that.

I have nothing against Hawaiian or Alaska for pursing there model and hopefully a nice profit. I hope both airlines do well (and it appears they both are). I get the part about Hawaii not working out for everybody. Probably why we aren't going there yet. SW is all about going to destinations to make a profit, if they can't do that...they usually stay away. Which is good for my profit sharing account.

Dalad,

I'm sure we will be able to navigate the Caribbean just fine. Thanks for the concern.

 

[dalad]

Sensitive? Not really. Just calling an old decision by Southwest just that.

I have nothing against Hawaiian or Alaska for pursing there model and hopefully a nice profit. I hope both airlines do well (and it appears they both are). I get the part about Hawaii not working out for everybody. Probably why we aren't going there yet. SW is all about going to destinations to make a profit, if they can't do that...they usually stay away. Which is good for my profit sharing account.

Dalad,

I'm sure we will be able to navigate the Caribbean just fine. Thanks for the concern.

Did that really happen? Was told by an FAA type and some AT guys. Just wondering.... Dispatchers do make mistakes.

 

[dalad]

I don't see why SWA doesn't start service from BOS to SNN, DUB, and KEF. At least in the summer.

 

[redflyer65]

The international growth will be interesting to see as it unfolds. The next schedule that comes out the first of December will show the SW routes. I don't expect anything new initially (same AirTran cities), but after the system is up (July '14) and running SW will only be limited by route length. Caribbean, Mexico and Central America (along with northern S.America) will all be in play.

Europe obviously isn't in the cards right now D, but who knows.

 

[HighSpeedClimb]

OAK. LAS and PHX are too far for a 737.

I guess it's our imagination that AS is flying a 737 from oak to Hawaii as did Aloha and ATA in the day. With Hawaiian's profit margin as thin as it is with a monopoly interisland, you better hope SWA doesn't fly to HI and perform tags interisland. Those tiny profits would wilt away

 

[Torpid]

I guess it's our imagination that AS is flying a 737 from oak to Hawaii as did Aloha and ATA in the day. With Hawaiian's profit margin as thin as it is with a monopoly interisland, you better hope SWA doesn't fly to HI and perform tags interisland. Those tiny profits would wilt away

Did you notice that there is a period after OAK?

 

[Dan Roman]

Did you notice that there is a period after OAK?

I don't thinking reading comprehension is his strong suit!

 

[Dan Roman]

I guess it's our imagination that AS is flying a 737 from oak to Hawaii as did Aloha and ATA in the day. With Hawaiian's profit margin as thin as it is with a monopoly interisland, you better hope SWA doesn't fly to HI and perform tags interisland. Those tiny profits would wilt away

This wasn't meant to start a "my airline makes more than yours deal" but since you seem to be so inclined....Hawaiian is doing fine, in the last 5 years we have generated over $400 million in unrestricted cash, established 10 new International routes and some qtrs have actually had some of the highest operating margin in the industry (we actually beat SWA for a couple qtrs) This 3rd qtr was actually one of the best in the airlines history. Simply put, for years Hawaiian did in fact, barely hang in there. That is no longer the case, they have spent millions investing in the airline, cutting edge technology and a modern fleet while still generating millions of dollars of cash.
Also you clearly don't understand the inter-island market with your comment about SWA flying "tags".
Nice try, you failed and not just in your reading comprehension about OAK vs the cities that are out of range to operate a 737 from.

 

[HighSpeedClimb]

I don't thinking reading comprehension is his strong suit!

Ok ok, you got me on the period after OAK, I'll give you that after posting when consuming a few beers. Note to self.... But ur stock dumped from 8.20 to 7.70 after ur 3Q results. Yields are thin, even with 90% of the interisland market share. What would ur profits have been had you not charged for bags? I think your other markets in Asia are keeping you just above losing money. I think HA has a great product but someone else with a great feed network can do it cheaper while making money, that's all. Relax, as long as you are happy.
Ciao

 

[Dan Roman]

Ok ok, you got me on the period after OAK, I'll give you that after posting when consuming a few beers. Note to self.... But ur stock dumped from 8.20 to 7.70 after ur 3Q results. Yields are thin, even with 90% of the interisland market share. What would ur profits have been had you not charged for bags? I think your other markets in Asia are keeping you just above losing money. I think HA has a great product but someone else with a great feed network can do it cheaper while making money, that's all. Relax, as long as you are happy.
Ciao

Rule of three....No posting for 3 hours after consuming 3 beers or 3 Starbucks....

$40 million profit on $600 mil revenue is very good. Not sure what the bag charge has to do with it? It's a part of revenue just like the actual ticket is a part of revenue. The airline industry has morphed into what, oddly enough, PeopleExpress started. Only charging for what you use. Ticket only is cheapest. Bags, a little more, etc. Interesting enough, Hawaiian still serves free meals in coach. Kind of their own version of marketing along the line of SWA's free bags. Most perceive HA as the "generous" airline because of our enhanced cabin service, but we still collect millions in bag fees without any harm to our competitiveness. Our stock had run up to to a 52 week high prior to the qtr results (it was no secret it was going to be good) what you are describing is normal profit taking.
Hawaiian has strong code share in Asia with ANA and Korean. Virgin Blue in Australia. Virgin Atlantic. Virgin America and JetBlue on the mainland and others. We are not in any alliance because I'm told it's too limiting, they like the flexibility of being able to code share with whoever fits our route structure. Less limiting that way apparently. Whatever success Hawaiian has is a result of being "Hawaiian". Merged into anyone else and it would be worth a lot less.

The bottom line is though, Hawaiian went through years and years of barely hanging on. In the 90's Aloha was in MUCH better financial shape than HA. The Chapter 7 bankruptcy of airlines music has stopped playing and those of us left all have chairs is my take and Hawaiian is nothing like what it was. They spend millions in investing in the infrastructure of the airline and they have generated $100's of millions in cash while expanding faster than any other airline currently is (five years to Captain, some widebody). Back to the original point you made, we would hardly be vulnerable to SWA entering the market, There will always be numerous airlines that fly between the west coast and Hawaii and Hawaiian will always be the big dog in that market. Bur competition does drive down yields, hence we do in fact make our largest profits on some of the International routes, we also are losing on some as they have yet to mature. We have finally gotten to the point were we are diversified enough to not be dependent on any one market.

Sorry if I sound so long winded, but there is a lot of ignorance about Hawaiian based on our past struggles that are no longer relevant (no offense but you perception that SWA could fly "tags" on transpac is grossly naive and just not possible with an ETOPS 737, nor could it put a dent in our inter-island flying)
:beer:

 

[Dan Roman]

And again, sorry about the long winded reply. Some folks have an interest in Hawaiian and that's who it's for. If you like living in Hawaii there is no better job, but Hawaii and Hawaiian is not for everyone.

 

[SWA Bubba]

......
Our stock had run up to to a 52 week high prior to the qtr results (it was no secret it was going to be good) what you are describing is normal profit taking.:beer:
......

Dan's right about this. This is fairly common, and happens to Southwest all the damn time. The stock price will creep up and up, leading to the day when quarterly results are announced, and then when we announce a profit, the stock drops a bit. Our stock has been climbing a lot lately (as have most airline stocks), and has been pushing its 52 week high up and up for the last month or two. However, today's the day when we announce our Q3 results, so you might look for that later today.

Bubba

Bubba