American, United, Delta, Alaska Airlines and Hawaiian Airlines all offer service to and from Hawaii, and analysts will be watching to see if Southwest's entry has any effect on prices.
Southwest Airlines, the USA carrier known for its lack of seating assignments, short routes and no-frills service late Wednesday announced it plans to start selling tickets for service to Hawaii next year, answering a question that investors and its loyal customers have asked the carrier. In addition, Southwest said it is considering nonstop flights to neighbor islands. That certification measures how far an aircraft can be safely away from land and over water if one engine gives out.
"Hawaii is an important place for Southwest Airlines because so many people count on us to take them everywhere they want to go reliably and affordably", Chairman and CEO Gary Kelly said in an announcement to employees in southern California. And with a major carrier adding flights to Hawaii in 2018, this may be a good time to start.
Southwest Chief Revenue Officer Andrew Watterson, who worked for Hawaiian Airlines as vice president of planning and revenue management from 2011-2013, told the Honolulu Star-Advertiser that the company was purposely ambiguous about when flights would begin to and from Hawaii because that will depend on when ETOPS authorization is received.
Southwest has long flown more passengers to and from California than any other airline, but Alaska, which acquired Virgin America previous year, has been trying to poach many of those customers.
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In the last earnings report the EPS was $2.22 and is expected to be $1.93 for the current year with 28,407,000 shares outstanding. Currently, 363.6 million total shares are owned by the public and among those 360.39 million shares have been available to trade.
"We anticipate fares will drop", he said. "For much of California, Hawaii is closer than Florida so it would make sense for us to go there".
The low-priced carrier made the announcement Wednesday evening, ending years of speculation.
Watterson said the airline, which is the first operator for the Boeing 737 MAX 8 aircraft, will use those 175-seat planes for Hawaii service. The airline plans to have over ten MAX aircrafts in service by the end of this year.
Southwest Airlines is now the third-busiest carrier in the US, and a study by the University of Virginia this year found that Southwest still has the power to force its rivals to lower fares to stay competitive. The airline is expected to bring its low-fare, bags-fly-free, no-fee model to the marketplace.