Why Hawaiian Airlines’ Response to Southwest Is a Huge Mistake (and One You Should Avoid)

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This article originally appeared in Inc. on December 11, 2017



The CEO of Hawaiian Airlines, Mark Dunkerley, announced this past Tuesday that Hawaiian Airlines is considering a basic economy class–a no-frills ticket for a very low price–fares as a response to the looming threat of Southwest Airlines entering the Hawaii market.

At face value you can see why lower prices might be a reasonable response to an airline famous for its lower fares–but it actually reveals a poor mindset about competition. The best way to face your competition is to focus on your category superconsumers–the highest profit, highest passion customers in your category–to figure out a way to grow the pie, not shrink it.

This may seem obvious, but many companies and startups don’t realize their growth strategy is predicated on stealing shares with lower prices or similar products–which often ends up losing money in the end. There are three specific lessons Hawaiian Airlines should have followed–and are critical for all startups to get right:

 

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