How will AA respond to southwest entering Hawaii
#32
Join Date: Mar 2008
Location: Fort Lauderdale, FL
Posts: 3,360
#34
Join Date: Jul 2002
Location: Virginia, USA
Posts: 4,492
I suppose it depends on what level AA wants to compete with WN for this market. If they want to go after the lowest fare segment then I suppose a race to the bottom fare war is likely. But there are a lot of WN pax who pay extra for certain perks such as early boarding. If AA lowered its premium fares instead of its coach prices those WN pax who bring in significant incremental revenue might be tempted to spend it on First Class rather sitting in WN coach.
#35
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,490
Hawaii is a regular leisure destination for me, as there is a plethora of sub $400 RT nonstops to all islands from SAN. If I lived east of the Mississippi, or perhaps Dallas / Houston, I would go to the Caribbean instead.
#36
Join Date: Dec 2014
Location: New York City + Vail, CO
Programs: American Airlines Executive Platinum, Marriott Bonvoy Ambassador Elite
Posts: 3,215
Theres a lot of factors at play here and you cant look at any one single variable in a vacuum. AA wants people to pay the premium to go from BE to E, by making the spread too large, they know they will lose out on revenue and their R/Python/SAS models should price the markup accordingly.
#37
Join Date: Aug 2017
Location: Stilllwater OK (SWO)
Programs: AAdvantage ExecPlat, World of Hyatt Globalist, plain "member" of Marriott, IHG, enterprise, etc.
Posts: 1,837
Count me in the bucket of people skeptical that southwest will be much of a threat.
For one thing, fares to Hawaii are usually pretty fair (given the distance) on AA metal (or anyone else's for that matter). It's a pretty competitive market. This isn't anything like those cases where Southwest busts those routes where AA's running a premium charge due to a lack of competition.
Southwests success typically lies on a couple of things that don't apply here -- The first is that it runs many direct flights from mid-continent cities to key touristy destinations like Las Vegas and Orlando. One of the main reasons that people in OKC, for example, love southwest is because they don't have to connect in DFW (or somewhere else) for their once every three year trip to these type of destinations. Same for Omaha, same for Cleveland, etc etc. A handful of CA-HI flights doesn't really play to any sort of schedule advantage. Also, I am somewhat skeptical that Southwest's core passenger group (infrequent middle-middle income passengers) will quite as easily fill planes to Hawaii as the much cheaper destinations it excels at like Orlando and Las Vegas, but maybe there is enough CA-HI demand regardless just based on population (in my part of the country, Hawaii may be a once in a lifetime destination that many never afford; all the while Las Vegas is a once a year trip for many over a long weekend with your 'buds' or 'girlfriends' to party and gamble).
For one thing, fares to Hawaii are usually pretty fair (given the distance) on AA metal (or anyone else's for that matter). It's a pretty competitive market. This isn't anything like those cases where Southwest busts those routes where AA's running a premium charge due to a lack of competition.
Southwests success typically lies on a couple of things that don't apply here -- The first is that it runs many direct flights from mid-continent cities to key touristy destinations like Las Vegas and Orlando. One of the main reasons that people in OKC, for example, love southwest is because they don't have to connect in DFW (or somewhere else) for their once every three year trip to these type of destinations. Same for Omaha, same for Cleveland, etc etc. A handful of CA-HI flights doesn't really play to any sort of schedule advantage. Also, I am somewhat skeptical that Southwest's core passenger group (infrequent middle-middle income passengers) will quite as easily fill planes to Hawaii as the much cheaper destinations it excels at like Orlando and Las Vegas, but maybe there is enough CA-HI demand regardless just based on population (in my part of the country, Hawaii may be a once in a lifetime destination that many never afford; all the while Las Vegas is a once a year trip for many over a long weekend with your 'buds' or 'girlfriends' to party and gamble).
#38
Moderator: American AAdvantage
Join Date: May 2000
Location: NorCal - SMF area
Programs: AA LT Plat; HH LT Diamond, Matre-plongeur des Muccis
Posts: 62,948
WN and AA are pretty differentiated airlines and passengers.
WN coach with Rockwell Collins Meridian seats with 31-32 seat pitch (exit row seats slightly more), unassigned seats (though there seems to be possible change in the air on this), free baggage allowance, more flexible ticket changes. Snacks, no meals.
AA offers lie flat Business / First and Premium Economy seats on most widebody service, 31-32 pitch and MCE in coach. Narrow bodies will offer Business / First seats, Coach with 30 Meridian and MCE seats. Meal service, no free baggage allowance without status or credit card for Coach passengers. Changeable fares are expensive, other fares incur significant change fees.
Other than increased capacity to Hawaii, I dont predict any near major changes. Fares from some departure points may drop, others where theres no competition wont, just as now.
Ill continue to purchase premium fares based on fare price and flight convenience. Occasionally that has meant HA, more often AS; we havent flown AA to Hawaii in eons.
WN coach with Rockwell Collins Meridian seats with 31-32 seat pitch (exit row seats slightly more), unassigned seats (though there seems to be possible change in the air on this), free baggage allowance, more flexible ticket changes. Snacks, no meals.
AA offers lie flat Business / First and Premium Economy seats on most widebody service, 31-32 pitch and MCE in coach. Narrow bodies will offer Business / First seats, Coach with 30 Meridian and MCE seats. Meal service, no free baggage allowance without status or credit card for Coach passengers. Changeable fares are expensive, other fares incur significant change fees.
Other than increased capacity to Hawaii, I dont predict any near major changes. Fares from some departure points may drop, others where theres no competition wont, just as now.
Ill continue to purchase premium fares based on fare price and flight convenience. Occasionally that has meant HA, more often AS; we havent flown AA to Hawaii in eons.
#39
FlyerTalk Evangelist
Join Date: May 2004
Location: DFW/DAL
Programs: AA Lifetime PLT, AS MVPG, HH Diamond, NCL Platinum Plus, MSC Diamond
Posts: 21,422
I fly southwest a lot (A List Prefered) and not being in a middle seat is only guaranteed if you have status or pay for early check in. Unlike AA, status on Southwest does not transfer to the other people on the same PNR. Ive been low A and my kids were in the Bs.
Southwest hasnt announced if/when they will be flying from LAX to Hawaii, but they did announce SAN was one of the first cities.
I have also never been on a WN plane where people weren't saving seats for people in later groups
#40
Suspended
Join Date: Sep 2006
Programs: AAdvantage PP
Posts: 13,913
Theres a lot of factors at play here and you cant look at any one single variable in a vacuum. AA wants people to pay the premium to go from BE to E, by making the spread too large, they know they will lose out on revenue and their R/Python/SAS models should price the markup accordingly.
#42
Join Date: Dec 2014
Location: New York City + Vail, CO
Programs: American Airlines Executive Platinum, Marriott Bonvoy Ambassador Elite
Posts: 3,215
The spread has certainly seem to have gotten large over time. It used to be maybe $50. I'm seeing differences on domestic routes of $200 or more. The bottom line AA isn't going to fly you to HNL (or whatever other HI market WN enters) for $149 OW and give you main cabin. Most of those tickets on WN will be limited and require advance purchase and flying on slower days of Tuesdays and Wednesdays.
#43
Join Date: Feb 2009
Location: USA
Programs: Chase Sapphire Reserve, WFBF
Posts: 1,573
I suppose it depends on what level AA wants to compete with WN for this market. If they want to go after the lowest fare segment then I suppose a race to the bottom fare war is likely. But there are a lot of WN pax who pay extra for certain perks such as early boarding. If AA lowered its premium fares instead of its coach prices those WN pax who bring in significant incremental revenue might be tempted to spend it on First Class rather sitting in WN coach.
#45
Join Date: Jul 2011
Posts: 2,302