Southwest closer to launching Hawaii flights: impact on unique markets

As Southwest Airlines inches closer to launching flights to, from and within the Hawaiian islands, there's no shortage of speculation about how the airline's entry into the market will affect overall dynamics.

Southwest is launching flights at a time when current operators between the US and Hawaii cite a period of overcapacity in the market, and there's no doubt the pricing pressure created by that excess supply will continue once Southwest firms up its initial schedule and injects promotional fares onto those routes.

Although Southwest could shake up the inter-island market from a commercial perspective, Hawaiian Airlines has already weathered numerous competitors in the market and obviously has a strong local following. In the short term, passengers will benefit from solidly lower fares until a new competitive equilibrium settles in.