11-09-2017, 12:01 PM
"Southwest may find that its 737s are too large to work inside Hawaii economically, Mesa CEO Jonathan Ornstein said on Tuesday. "I think it's going to be hard to make that work," he said, citing "finite demand" in the local markets, even if fares were to drop."
Not necessarily. Passengers are only part of the equation. The B717s that Hawaiian flies inter island has limited air cargo capacity- so much so that Hawaiian is trying to add all-cargo aircraft to their fleet. It's possible to modify 737s to carry fewer passengers and more cargo (like Alaska has done) but I doubt that is a course Southwest wants to pursue, especially considering that Alaska is getting away from that model, after demonstrating there are better alternatives. Ornstein probably wasn't considering "milk runs", which Alaska has had much success with over decades. And it's almost comical to hear him decry the 737 model when the Mesa model of smaller aircraft didn't work in this market. I'm not sure why they are quoting a failed business as being an "expert" in what works. I think all they could really weigh in on is what doesn't work, because that's where their experience is.
ETA: Alaska has serviced Petersburg to Wrangell flights and vice versa (30 miles) with 737s... for at least 15 years.
"While Southwest would face off against Hawaiian Airlines, a deeply entrenched competitor which enjoys a virtual monopoly in the state, it does have a secret weapon. Andrew Watterson, the Southwest executive who oversees revenue and is in charge of cracking the Hawaii nut financially, worked at Hawaiian for three years and knows the market well."
Unlike Island Air which got part of their fleet repossessed, Southwest doesn't need any of it's Hawaii routes to make money or even break even to continue operations. That is the "real" secret weapon. But having an insider probably doesn't hurt.
Not necessarily. Passengers are only part of the equation. The B717s that Hawaiian flies inter island has limited air cargo capacity- so much so that Hawaiian is trying to add all-cargo aircraft to their fleet. It's possible to modify 737s to carry fewer passengers and more cargo (like Alaska has done) but I doubt that is a course Southwest wants to pursue, especially considering that Alaska is getting away from that model, after demonstrating there are better alternatives. Ornstein probably wasn't considering "milk runs", which Alaska has had much success with over decades. And it's almost comical to hear him decry the 737 model when the Mesa model of smaller aircraft didn't work in this market. I'm not sure why they are quoting a failed business as being an "expert" in what works. I think all they could really weigh in on is what doesn't work, because that's where their experience is.
ETA: Alaska has serviced Petersburg to Wrangell flights and vice versa (30 miles) with 737s... for at least 15 years.
"While Southwest would face off against Hawaiian Airlines, a deeply entrenched competitor which enjoys a virtual monopoly in the state, it does have a secret weapon. Andrew Watterson, the Southwest executive who oversees revenue and is in charge of cracking the Hawaii nut financially, worked at Hawaiian for three years and knows the market well."
Unlike Island Air which got part of their fleet repossessed, Southwest doesn't need any of it's Hawaii routes to make money or even break even to continue operations. That is the "real" secret weapon. But having an insider probably doesn't hurt.