Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., reported its financial results for the second quarter of 2023.
“I want to thank our team members who have been taking care of our guests in a dynamic operating environment,” said Hawaiian Airlines President and CEO Peter Ingram. “Demand remains strong throughout our network, and we have recently seen a significant increase in bookings by travelers in Japan, an important geography that has trailed in the recovery of the overall market. Against the backdrop of improving operations and robust demand, I am excited about the major initiatives we’re on track to deliver in the second half of the year.”
|Second Quarter 2023- Key Financial Metrics and Results|
|GAAP||YoY Change||Adjusted (a)||YoY Change|
|Pre-tax Margin||(2.0) %||+5.8 pts.||(4.2) %||+4.1 pts.|
|Operating Cost per ASM||14.29¢||(10.1) %||11.08¢||1.9 %|
|Operating Revenue per |
|(a) See Table 4 for a reconciliation of adjusted net loss, adjusted diluted EPS, adjusted pre-tax margin, adjusted EBITDA, and adjusted operating |
cost per ASM (CASM excluding fuel and non-recurring items) to each of their respective most directly comparable GAAP financial measure.
Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.
Liquidity and Capital Resources
As of June 30, 2023, the Company had:
- Unrestricted cash, cash equivalents and short-term investments of $1.3 billion
- $1.6 billion in liquidity, including its undrawn $235 million revolving credit facility
- Outstanding debt and finance lease obligations of $1.7 billion
Leisure demand remains historically high; Hawaiian’s North America load factor of 90.4% was the highest second quarter load factor for its North America routes since 2017, and Neighbor Island load factor of 75.3% was the highest for the quarter since 2015. In addition to continuing strong US point of sale demand for International travel, Japan-originating traffic increased on Hawaiian’s International routes, contributing to an overall 16.2 point increase in International load factor year over year. Operating revenue was up 2.2% from the second quarter of 2022 on 11.0% higher capacity across Hawaiian’s network. International revenue increased 160.2% from the second quarter of 2022 on a 141.4% increase in capacity.
Second Quarter 2023 Highlights
- Completed the transition of A330 aircraft maintenance from a vendor-managed services agreement to internal resources; self-managed maintenance will allow Hawaiian to exercise greater control over its day-to-day operation and control costs more effectively as the operation grows with the introduction of A330 freighter aircraft
Routes and Network
- Resumed service between Honolulu and Fukuoka, Japan on April 28 with thrice-weekly service
- Initiated weekly service to Rarotonga on May 20, greatly expanding travel opportunities between Hawaiian’s 15 gateways on the US Mainland and the Cook Islands
Awards and Recognition
- Rated the #1 Domestic Airline, for the second consecutive year, in Travel+Leisure’s annual reader survey
- Ranked highest for economy travel customer satisfaction in Consumer Reports‘ 2023 Airline Travel Buying Guide
- Rated Best Domestic Airline for Food in Food & Wine‘s Global Tastemaker Awards
- Unveiled the Boeing 787 Dreamliner interior cabin design and a new business class product, the Leihōkū suites. These 34 seats feature flat beds, privacy doors and shared double suites; the aircraft, expected to enter service in 2024, will immerse all guests in cabin design elements that evoke Hawaiʻi’s rich natural world through bold textures, island-inspired sunrise and sunset lighting and sinuous ocean and wind patterns
- Promoted Brent Overbeek to Executive Vice President and Chief Revenue Officer and Avi Mannis to Executive Vice President and Chief Marketing Officer; they will jointly lead Hawaiian’s commercial strategy
- Appointed Lokesh Amaranayaka as Vice President of Airport Operations
Environmental, Social and Corporate Governance
- Invested in United Airlines Ventures Sustainable Flight Fund, an investment fund which prioritizes investments in new technology, advanced fuel sources and proven producers, all in an effort to help scale the supply of sustainable aviation fuel (SAF)
- Published the 2023 Corporate Kuleana Report, highlighting the Company’s progress on Environmental, Social and Governance priorities, including the Company’s plans to achieve net-zero greenhouse gas (GHG) emissions by 2050, eliminate single-use plastics from cabin service by 2029, and offer more locally sourced food onboard; the report also highlights Hawaiian’s employee diversity, including the highest percentage of women pilots of any major U.S. airline
- Donated 34 million HawaiianMiles to support Moananuiākea, the Polynesian Voyaging Society’s 47-month circumnavigation of the Pacific Ocean on the voyaging canoes Hōkūleʻa and Hikianalia
Third Quarter 2023 Outlook
The table below summarizes the Company’s expectations for the quarter ending September 30, 2023 expressed as an expected percentage change compared to the results for the quarter ended September 30, 2022. Figures include the impacts of the Company’s freighter operation, which are not material.
|Item||Third Quarter 2023 |
|GAAP Equivalent||GAAP Third Quarter 2023 |
|Available Seat Miles (ASMs)||Up 4.5% to up 7.5%|
|Operating Revenue per ASM(RASM)||Down 2.0% to down 5.0%|
|CASM excluding fuel and non-recurring items (a)||Up 7.0% to up 10%||Costs per ASM||Down 0.7% to down 2.8%|
|Gallons of Jet Fuel Consumed||Up 8.0% to up 11.0%|
|Economic Fuel Price per Gallon(a)(b)||$2.67||Average fuel price per gallon, |
including taxes and delivery
|Effective Tax Rate||~21%|
Full Year 2023 Outlook
The table below summarizes the Company’s updated expectations for the full year ending December 31, 2023expressed as an expected percentage change compared to the results for the year ended December 31, 2022. Figures include the impacts of the Company’s freighter operation, which are not material.
|Item||Prior Full Year 2023 |
|Updated Full Year |
2023 Guidance (d)
|GAAP Equivalent||GAAP Full Year |
2023 Guidance (d)
|Available Seat Miles (ASMs)||Up 9.5% to up 12.5%||Up 8.5% to up |
|CASM excluding fuel and non-recurring items (a)||Up 1.0% to up 5.0%||Up 3.0% to up 5.0%||Costs per ASM||Down 1.1% to down |
|Gallons of Jet Fuel Consumed||Up 12.5% to up 15.5%||Up 13.0% to up |
|Economic Fuel Price per Gallon(a)(b)||$2.70||$2.70||Average fuel price |
per gallon, includingtaxes and delivery
|Capital Expenditures (c)||$330M to $380M||$265M to $295M|
|(a) See Table 3 and Table 4 for a reconciliation of CASM excluding fuel and non-recurring items and economic fuel price per gallon to each of |
their respective most directly comparable GAAP financial measures.
(b) Fuel Price per Gallon estimates are based on the July 13, 2023 fuel forward curve.
(c) The updated Capital Expenditures guidance results from the change in the Boeing 787 delivery schedule, including pre-delivery payments
and other adjustments
(d) Third Quarter and Full Year 2023 Outlook does not reflect the potential impact from today’s RTX (parent company of Pratt & Whitney)
disclosure regarding accelerated inspections of their GTF engines.