Southwest mulls island-hopping from Oahu and Hawaiian tanks

Bloomberg

Southwest Airlines Co. intends to offer island-hopping flights within Hawaii after it ramps up service to the state from California, boosting the competitive threat to Hawaiian Airlines.
Inter-island flights will “eventually” be added to complement new service from the US mainland, Southwest said in a statement.
The carrier named San Jose, San Diego, Sacramento and Oakland as the first California cities that will get nonstop flights to Hawaii.
The lucrative inter-island market is a mainstay for Hawaiian, which derives about 94 percent of its in-state revenue from the five largest routes in that network. Encroachment on those flights by Southwest would be “a fairly significant headwind for Hawaiian,” Joseph DeNardi, a Stifel Financial Corp. analyst, has said.
Hawaiian said it’s ready for the challenge, citing its 170 daily flights between islands.
A last-minute ticket on its popular Honolulu-Kona route would be cheaper than a Southwest fare between Austin, Texas, and Houston, a trip of similar length, said Peter Ingram, Hawaiian’s chief executive officer.
“Southwest’s PR strategy has been to toss out tidbits without much detail, so it’s unclear what kind of service or operation they are committing to,” Ingram said in an emailed statement. “We are not afraid of competition.”
Hawaiian Holdings Inc. dropped 6.5 percent to $38.25 at the close in New York, the biggest decline in six months. Southwest was little changed at $52.24.
The Dallas-based airline, which plans to start ticket sales for flights to Hawaii later this year, is awaiting regulatory approval to begin the routes from California to airports in Honolulu, Maui, Kauai and Keahole.