Hawaiian reports a GAAP net loss of $36.8 million in the second quarter

Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., reported its financial results for the second quarter of 2022.

“Strong demand in our domestic markets has been joined by an encouraging recovery from our international gateways in the second quarter” said Peter Ingram, Hawaiian Airlines President and CEO.  “As we move into the summer travel peak every indication suggests a continuation of these positive trends.  I am extremely proud of our team who continue to deliver the industry’s best reliability and service as we pursue our mission to connect people with aloha.”

Financial Results

Second Quarter 2022

  • The Company reported a GAAP net loss of $(36.8) million, and an adjusted net loss of $(46.1) million.
  • The Company reported GAAP EPS of $(0.72), and adjusted EPS of $(0.90).
  • The Company reported EBITDA of $12.9 million, and adjusted EBITDA of $1.1 million.
Second Quarter 2022 Highlights

Revenue Environment

The Company continued to enjoy strong demand throughout its domestic network and is seeing a solid recovery in its international network.  The Company’s premium products performed exceptionally well during the quarter, with both business/first class revenue and Extra Comfort revenue exceeding 2019 levels.  The Company’s overall operating revenue was down 2.9% from second quarter 2019 as its international network is still rebuilding.

Other revenue was up 26.6% compared to the second quarter of 2019 driven by a record quarter of cargo revenue and sales of HawaiianMiles.

Routes and Network

In April 2022 the Company announced it was resuming three-times-weekly nonstop service between Auckland, New Zealand and Honolulu, Hawai’i starting July 2, 2022 and a seasonal increase in frequency between Seoul, South Korea and Honolulu for the summer of 2022.

In May 2022 the Company announced its plan to resume service between Honolulu’s Daniel K. Inouye International Airport (HNL) and Tokyo Haneda Airport (HND) beginning August 1. The Company also announced an increase in weekly flights between HNL and Narita Airport (NRT) and Osaka’s Kansai Airport (KIX) beginning in August.

During the second quarter of 2022, the Company operated at 87% of its 2019 second quarter system capacity, comprised of 115%, 80% and 31% capacity on its North America, Neighbor Island and International routes, respectively.

Liquidity and Capital Resources

As of June 30, 2022, the Company had:

  • Unrestricted cash, cash equivalents and short-term investments of $1.5 billion
  • $1.8 billion in liquidity, including its undrawn $235 million revolving credit facility
  • Outstanding debt and finance lease obligations of $1.8 billion
  • Air traffic liability of $784 million

Operational Excellence

The Company maintained its #1 national ranking for On-Time Performance for the 18th consecutive year in 2021, as reported in the U.S. Department of Transportation (DOT) Air Travel Consumer Report.

In July 2022, Travel + Leisure named Hawaiian Airlines Best Domestic Airline.

Environmental, Social and Corporate Governance

In May 2022, the Company issued its 2022 Corporate Kuleana (Responsibility) Report, providing updates on Environmental, Social and Governance performance and priorities, including new commitments to replace single-use plastics in cabin service by 2029 and to locally source 40% of food and beverage for its Hawai’i-based catering operations by 2025.

In May 2022, the Company announced a strategic partnership with REGENT to support the initial design of its next-generation 100-person capacity all-electric seaglider known as the Monarch.

In June 2022, the Company announced a plan to jointly study the commercial viability of locally produced sustainable aviation fuels to replace all or a percentage of traditional fossil fuel-based jet fuel with fuel that is made with sustainable feedstocks.

In July 2022, the Company appointed Wendy Beck and Craig Vosburg to its Board of Directors.

Third Quarter 2022 Outlook

The Company expects its capacity for the quarter ending September 30, 2022 to be down approximately 5% to down 8% compared to the third quarter of 2019, mostly driven by the delay of the full restoration of its Japan network.

The Company expects its total revenue for the quarter ending September 30, 2022 to sequentially improve from the second quarter and be between down 3.5% to up 0.5% compared to the third quarter of 2019.

The Company expects its CASM excluding fuel and non-recurring items for the quarter ending September 30, 2022 to be consistent with the second quarter at up approximately 8% to 12% compared to the third quarter of 2019.

The Company’s outlook for adjusted EBITDA for the quarter ending September 30, 2022 is $15 million to $75 million.

The table below summarizes the Company’s expectations for the quarter ending September 30, 2022 expressed as an expected percentage change compared to the results for the quarter ended September 30, 2019.

Item

Third Quarter 2022
Guidance

GAAP Equivalent

GAAP Third Quarter
2022 Guidance

ASMs

Down 5% to 8%

Total Revenue

Down 3.5% to up 0.5%

Costs per ASM excluding fuel and non-
recurring items (a)

Up 8% to 12%

Costs per ASM (a)

up 22% to 25%

Gallons of Jet Fuel Consumed

Down 7% to 10%

Fuel Price per Gallon (b)

$3.50

Adjusted EBITDA (c)

$15 million to $75
million

Net Income (c)

(a)

See Table 3 for a reconciliation of GAAP operating expenses to operating expenses excluding fuel and non-recurring items.

(b)

Fuel Price per Gallon estimates are based on the July 14, 2022 fuel forward curve.

(c)

The Company is not providing a reconciliation of adjusted EBITDA to GAAP net income, the most directly comparable GAAP measure, as it is unable, without unreasonable efforts, to calculate certain special and non-recurring charges, which could have a significant impact on the GAAP measure.

Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.

Full Year 2022 Outlook

The table below summarizes the Company’s expectations for the full year ending December 31, 2022 expressed as an expected percentage change compared to the results for the year ended December 31, 2019. Costs per ASM excludes any adjustments for labor agreements that are currently amendable or become amendable in 2022.

Item

Full Year 2022
Guidance

GAAP Equivalent

GAAP Full Year 2022
Guidance

ASMs

Down 11% to 8%

Costs per ASM excluding fuel and non-
recurring items (a)

Up 12% to 15%

Costs per ASM (a)

Up 23% to 25.5%

Gallons of Jet Fuel Consumed

Down 14% to 11%

Fuel Price per Gallon (b)

$3.36

Effective Tax Rate

~19.5%

Capital Expenditures

$105 million to $125
million

(a)

See Table under “Non-GAAP Reconciliation” for a reconciliation of GAAP costs per ASM to costs per ASM excluding fuel and non-recurring items.

(b)

Fuel Price per Gallon estimates are based on the July 14, 2022 fuel forward curve.

Hawaiian Airlines aircraft photo gallery: