HONOLULU -- Hawaiian Airlines CEO Peter Ingram wants
Southwest to back up its statements about forthcoming Hawaii service with details,
especially concerning fares.
"We get asked a lot about Southwest right now, which
has done a masterful job of getting a lot of column inches in various
publications by announcing very little," he said during a roundtable of
Hawaii tourism executives that convened the morning after the Travel Weekly
Hawaii Leadership Forum last week. "We still don't even have a schedule of
when they're going to fly. We still don't know when they're going to start flying.
They haven't sold a single ticket. Yet they still get a tremendous amount of
attention, and people say, 'How are you going to compete with Southwest?'"
Southwest recently revealed that it will fly to Oahu, Kauai,
Maui and the Big Island, focusing on routes from California. The airline also
plans to "eventually" offer interisland service, said Southwest
president Tom Nealon, who was in Hawaii meeting with community and business
leaders on May 3, about an hour before the start of the Travel Weekly
Roundtable that Ingram attended.
During Nealon's meeting in Hawaii, he reportedly said his
own interisland ticket during his travels was "very expensive."
"We will come in with lower fares, and not introductory
fares. We have the structure to offer low fares," Nealon said, according
to the Associated Press. "It's got to be a price that's competitive and
the lowest price in the market."
Ingram took umbrage with that statement and did research
before arriving at the roundtable, reviewing Southwest's prices for Austin-Dallas
flights in the next week.
"There's not a single ticket available for less than
$227. So, I think they may be surprised what the prices are in this market if
they go on our website and look at what it would cost to fly from Honolulu to
Maui or Honolulu to Kona in the next week. You're not going to see fares that
high. You're going to see a lot of opportunities to buy tickets for less than
$100," Ingram said.
"When we look at it from our perspective, we think
Hawaiian Airlines has the best formula that we've crafted over almost 90 years
of serving Hawaii and various travel needs of people within the state and to
and from Hawaii. We've built a formula that is specifically designed around
having the best possible mix of service, mix of different classes of seats and
opportunities on the airplane. So, we think we can compete effectively in any
Southwest's Nealon said the company is in the process of
getting FAA approval for the new Hawaii routes and expects to start selling
tickets from the West Coast to the Aloha State before the end of the year. In
the two days of trading following Southwest's announcement of plans to enter
the interisland market, Hawaiian Airlines stock dropped from $40.65 to $37 per
share. It was trading at about $35.80 on Monday morning.
Wayblazer chairman Terry Jones, the founding CEO of
Travelocity and founding chairman of Kayak who was also at the roundtable,
called Southwest's reputation as the low-cost alternative a "myth."
"You know why Southwest is not on Orbitz and
Travelocity and all the other OTAs? Because they're not priced
competitive," he said. "In some markets they're cheap, but in many
markets American, Southwest, Delta, they all match."
Responding to Jones, roundtable participant Ray Snisky,
executive vice president of Mark Travel Corp., which private labels Southwest
Vacations, said, "There might be a couple of other reasons why they're not
on the OTAs."
Speaking more broadly to Southwest's entering the
islands, Snisky also said, "I think it points to the great success in the
airline industry right now. I think [Southwest] is going to increase
competition. I think it's going to take Hawaii away from being an aspirational
destination, not from the quality of it, but from the ability to get there, and
it's going to become a lot more commonplace for people to go to Hawaii."
Sitting across the table from Snisky, Jennie Ho, president
of Delta Vacations, agreed that Southwest's entry into Hawaii is not
necessarily a zero-sum game.
"There will be a new equilibrium in terms of supply and
demand, but the market will adjust," she said. "And, there may be
this initial inflation of new customers. It's true there's a lot of history
here that we can see that Southwest brings a new wave of customer demand. The
market grows bigger. It's not just a bigger slice of the same pie."
Correction: An earlier version of this story
misquoted Ray Snisky of Mark Travel.