The pressure is heating up for Hawaiian Airlines (NASDAQ: HA) after Southwest Airlines (NYSE: LUV) started servicing inter-island routes in 2017 in addition to the newly added long-haul trips from the west coast to the Hawaii Islands in 2019. Servicing passengers throughout seven countries, Hawaiian Airlines relies upon Hawaii travelers to fill most of the capacity -- making the airline vulnerable as competing airlines fight for Hawaii travel capacity.
As most large U.S.-based airlines are now servicing Hawaii routes in one form or another, investors are left wondering if Hawaiian Airlines can stay competitive if this becomes a race to the bottom on fare prices and offerings, lowering Hawaiian Airlines' ability to attract customers -- potentially slowing revenue growth.
Hawaiian Airlines' antitrust immunity application was turned down by the Department of Transportation (DOT) in October. Teaming up in marketing programs with Japan Airlines would allow for competitive pricing and schedules against competitors. The agreement would allow Hawaiian to reach 34 locations throughout Japan in addition to 11 locations in Asia that are outside of Japan -- widening its reach.