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Southwest Airlines

Southwest to Hawaii: Will there be a 'Southwest Effect'?

Southwest Airlines announced it will start flying from the West Coast to Hawaii next year. Although it did not announce specific routes, you can bet on flights from Los Angeles and Oakland, and maybe from San Diego, San Jose, Portland, Seattle and possibly Burbank if the runway is long enough. But travelers aren't expecting much in the way of new routes; instead, the big question is whether Southwest will bring down the fares.

For decades, the "Southwest Effect" has been conventional wisdom in the airline business: When Southwest enters a new market for the first time, fares on all airlines in that market go down and stay down. It's referenced in even some learned...