Southwest zeroes in on Hawaii

canyonblue

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Southwest zeroes in on Hawaii

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[size=-1]By Scott McCartney[/size]
[size=-1]WALL STREET JOURNAL[/size]
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Aloha, Southwest Airlines. The land-locked discount airline is likely to begin selling tickets to Hawaii soon -- taking another important step toward being a full-service airline.

In addition to acquiring leases on six gates and a maintenance hangar from ATA Holdings Corp.'s ATA Airlines in its bankruptcy reorganization, Southwest also agreed to code-share with ATA. That provision, which lets the two airlines funnel passengers to each other and sell seats on each other's planes, could prove to be the most important part of the $117 million deal.

For the first time, Southwest will be able to offer flights to congested airports it shied away from in the past as well as to popular long-haul destinations for which its small Boeing 737s were ill-suited. Using ATA as a surrogate, Southwest is about to gain access to New York's La Guardia Airport and Washington's Reagan National Airport. And Southwest will close one of the big gaps in its blanket-the-U.S. route strategy, according to people familiar with Southwest's plans, by offering Waikiki.

Hawaii is an important destination for airlines, one that helps separate the discounters from the big network airlines. Competitors have often derided Southwest's frequent-flier program as less appealing to travelers because it didn't offer Hawaii. Never mind that you might never find a seat to Hawaii on other programs on a date you'd want to go. It's the promise that's attractive -- the chance that you might get a free ticket to paradise is a whole lot more appealing than a free ticket to Providence.

For consumers, this is more than just another way to get to Hawaii cheaply, or a new use for the Southwest frequent-flier tickets accumulating in your drawer. When this deal goes through, it will be part of a coming of age for Southwest, and send a strong message that the airline intends to be more than just a short-hop jolly elf.

Under longtime Chairman Herbert Kelleher, Southwest tried to avoid direct clashes with bigger airlines and grew rapidly by flying under the radar. Kelleher preferred secondary airports to avoid hand-to-hand combat, and eschewed big airline hubs like Denver, Pittsburgh and Minneapolis.

But under new Chief Executive Gary Kelly, Southwest has been willing to take chances and go after weak network carriers directly. There's not much virgin territory left for Southwest, so it has attacked bankruptcy-court denizen US Airways Group Inc. in Philadelphia, for example, and is building a much-bigger hub, with 25 gates, at Chicago Midway that will make life tougher for the big boys at Chicago O'Hare, UAL Corp.'s United Airlines and AMR Corp.'s American Airlines.

Southwest has also challenged American in Dallas by working to get federal restrictions repealed on Dallas Love Field, Southwest's home airport there. And President Colleen Barrett has been looking at big-airline service enhancements, like assigned seating.

That may not happen anytime soon, but Southwest has sent a message that it wants its growth to continue, and it realizes that to do that, it has to move more into big-boy airline turf.

It's not that Kelleher isn't still the key strategic planner -- he is. It's just that Southwest has entered a new phase: It's financially stronger than bigger airlines, and bigger than many of the faster-growing discounters. It was time to ramp up its growth, and with airlines large and small slashing costs and getting more competitive, Southwest may have to fight harder to win battles in the future. So it's flexing its muscle and growing up.

Southwest has looked at flying to Hawaii itself in its new longer-range 737s, much as Aloha Airlines, whose parent, Aloha Airgroup Inc., recently filed for Chapter 11, does. But that isn't as appealing economically as other mainland opportunities Southwest sees. For Hawaii, you really need a bigger plane to make it work.

Enter ATA, which flies bigger planes. ATA flies nonstop to Honolulu from Los Angeles, San Francisco, Phoenix and Seattle, and to Maui from Phoenix, San Francisco and Los Angeles. It offers one-stop, direct flights from Chicago. Southwest said it will begin its code-sharing from Chicago, and expand it in the future to Las Vegas, Seattle, Phoenix, Los Angeles and Orlando, Fla.

Southwest hasn't announced its specific code-sharing plans with ATA yet -- that will come soon. But a person familiar with its plans says Hawaii, along with destinations such as New York and Washington, will be part of Southwest's future.

A Southwest spokeswoman says the airline is working hard on the code-share aspect of the deal. "We haven't made any announcements at this point as to the cities and destinations we might serve. However, it is our goal to have the code-share agreement finalized and the flights available for sale in early 2005," she said. The airline expects to code-share on up to 10 cities with ATA, but pairing only flights that have workable connections.
 

Whale Rider

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Kool Avtar Canyonblue! SWA jet looks like its in HNL.:)
 

English

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canyonblue said:
Southwest has looked at flying to Hawaii itself in its new longer-range 737s, much as Aloha Airlines, whose parent, Aloha Airgroup Inc., recently filed for Chapter 11, does. But that isn't as appealing economically as other mainland opportunities Southwest sees. For Hawaii, you really need a bigger plane to make it work.

A bigger plane? No, really?

:rolleyes:
 

Whale Rider

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Boeings new "Super Efficient" 7E7 Dreamliner would be perfect for SWA's transpacific crossing. We'll see if SWA breaks the mould. :)
 
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