Morgan Stanley: Southwest could cut flights to Hawaii by 30%


Earlier this month, Southwest Airlines conducted its first Validation Test Flight to Daniel K. Inouye International Airport in Honolulu. This is an important part of the Federal Aviation Administration's certification process that would allow the world's largest low-cost airline to begin serving Hawaii.

According to a recent analyst note from Rajeev Lalwani of Morgan Stanley, Southwest's entry into the Hawaiian market could have a dramatic effect on air travel within the state and on flights to destinations. from the American continent.

Read more: People find hidden cameras on some American Airlines and Singapore Airlines planes. Here is what it is.

"What we have found is that a likely addition of more than 10% capacity on North American routes to a low-cost carrier's introductory rates could result in lower fares." by 30% compared to today, "Lalwani said in the note.

Morgan Stanley's analysis is based on data showing that the current price of a one-way flight from California to Hawaii is about $ 200, while Southwest's supposed promotional fares for flights similar could be $ 140.

Southwest Airlines has always moved the airline market. To such an extent that there is a term for this: the effect of the southwest.

In 2017, researchers at the Darden School of Business at the University of Virginia released a study revealing that when Southwest Airlines entered a market offering non-stop flights, ticket prices dropped by an average of 15%. At the same time, the number of air passengers increases from 28% to 30%.

Source link