Hawaiian Airlines CEO irked by Southwest buzz

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"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," said Hawaiian Airlines CEO Peter Ingram.
"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," said Hawaiian Airlines CEO Peter Ingram. Photo Credit: Dave Miyamoto

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 environment."

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."
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Correction: An earlier version of this story misquoted Ray Snisky of Mark Travel.

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