HONOLULU — It’s the $110 million question: whether to charge for checked bags and flight changes.
Hawaiian Airlines has resisted changing its approach since Southwest Airlines entered the Hawaii market in March with its “bags fly free” and no-change-fee policies.
The state’s largest carrier has nearly 110 million reasons not to drop those revenue producers after generating $84.7 million in bag fees and $24.7 million in change fees in 2018, according to new data released by the U.S. Department of Transportation. Hawaiian has now topped the $100 million threshold in those two categories for four straight years.
Colorado-based aviation consultant Mike Boyd said both airlines likely will hold their ground and stay with what they do best.
“Southwest Airlines is making hundreds of millions of dollars by not charging for change fees because people like me fly with them rather than somebody else because of that,” Boyd said. “The management of Hawaiian will look at that, and they’ll do what they think is best for Hawaiian. But Hawaiian today is not an airline to mess with competitively.”
Hawaiian said it has no plans to alter its product.
“We provide unmatched value to Hawaii residents and visitors who enjoy our Hawaiian hospitality, including complimentary meals, superior product and leading punctuality,” Hawaiian spokesman Alex Da Silva said in an email. “Our 7,300-employee ohana knows our island home the way no competitor does, and we tailor every aspect of our business to serve the needs of travelers to, from and within our islands.”
Southwest, likewise, said it is happy with its current policies.
“There is no active work (or even consideration) to change the core tenets of Southwest’s customer-friendly policies of Bags Fly Free and No Change Fees,” Southwest spokesman Brad Hawkins said. “We’re thrilled with the response on both flights within the state and on mainland routes to our purposed philosophy of extending value and comfort to all.”
Hawaiian, which transported a record 11.8 million passengers in 2018, has in recent years fought off Island Air, go! and Aloha Airlines in the interisland market — a segment that Southwest is now gradually invading with $29 one-way flights between Honolulu and Kahului, and Honolulu and Kona.
Hawaiian also has withstood challenges from mainland carriers United Airlines and Alaska Airlines, which both have expanded service to Hawaii in recent years, and Allegiant Airlines, which came and went in the blink of an eye.
“Do not underestimate Hawaiian Airlines in terms of their strategy and their direction going forward,” Boyd said. “Hawaiian is a very tough competitor for Southwest. They have larger airplanes, and their in-flight service is a little bit more comprehensive and their name is Hawaiian. On Hawaiian you can select your seat and there are onboard amenities. On Southwest you get a bag of pretzels. Southwest is a great airline but so is Hawaiian. This is great for the consumer.”
Hawaiian Airlines, which raised checked-bag fees by $5 in November, now charges $30 for a first checked bag and $40 for a second checked bag on mainland flights. Those numbers are in line with most airlines. Hawaiian’s interisland checked-bag fees didn’t change and remain at $25 and $35, respectively, or $15 and $20 for HawaiianMiles members.
Overall, the 11 reporting U.S. airlines took in $4.89 billion in baggage fees in 2018, up 7% from $4.58 billion in the previous year. Airlines’ reservation and change fees (Southwest does not charge fees to cancel or change flights) fell 5.6% to $2.7 billion from $2.86 billion in 2017.