Category Archives: Hawaiian Airlines

Hawaiian loses $60.7 million in the first quarter

Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., today reported its financial results for the first quarter of 2021.

First Quarter 2021 – Key Financial Metrics
	GAAP	YoY Change	Adjusted	YoY Change
Net Loss	($60.7M)	$83.7M	($190.6M)	($156.6M)
Diluted EPS	($1.23)	$1.91	($3.85)	($3.11)
Pre-tax Margin	(42.2)%	(10.9) pts.	(132.4)%	(124.4) pts.

“We reached an important inflection point during the first quarter on our path to recovery with an encouraging rebound in demand, despite the challenges that the COVID-19 pandemic continues to impose on our business. Bookings in North America improved materially as we began to realize the pent up demand for leisure travel after a year of lockdown,” said Peter Ingram , Hawaiian Airlines President and CEO. “I am grateful to my colleagues who continue to connect people with aloha in the face of historic uncertainty. I am more optimistic each day about our progress as we rebuild our network and capitalize on the resilience of Hawai’i as a post-pandemic vacation destination.”

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

First Quarter 2021

Financial Results

For the first quarter of 2021, the Company reported a net loss of $60.7 million , and adjusted net loss of $190.6 million .

The Company reported total revenue of $182 million , down 72% compared to the first quarter of 2019, on 49% lower capacity. After a slow start to the year, the Company experienced a rebound in close-in demand in North America in March 2021.

The Company reported total operating expenses of $255.4 million , and operating expenses excluding non-recurring items of $402.7 million , down 33% compared to the first quarter of 2019.

Routes and Network

Throughout the first quarter of 2021, the State of Hawai’i continued its Safe Travels program, which allows guests to avoid quarantine with evidence of a negative COVID-19 test, subject to certain additional county-specific requirements.

The Company continued to rebuild as well as expand its network primarily in North America . During the first quarter, the Company operated an average of 51% of its first quarter system 2019 capacity, comprised of 73%, 38% and 12% of North America , Neighbor Island and International 2019 capacity levels, respectively.

In March and April of 2021, the Company launched four new North America routes. Starting in the summer of 2021, the Company will expand frequencies on the less than daily routes.

Daily service between Kahului , Maui (OGG) and Long Beach (LGB), which started March 9, 2021 .
Twice weekly service between Honolulu’s Daniel K. Inouye International Airport (HNL) and Orlando International Airport (MCO), which started March 11, 2021 .
Five-times-weekly service between Honolulu’s Daniel K. Inouye International Airport (HNL) and Ontario International Airport (ONT), which started March 16, 2021 .
Twice weekly service between Honolulu’s Daniel K. Inouye International Airport (HNL) and Austin-Bergstrom International Airport (AUS), which started April 21, 2021 .

In April 2021 , the Company announced it will initiate four-times-weekly service between Kahului , Maui (OGG) and Phoenix Sky Harbor International Airport (PHX) starting in May 2021 .

Liquidity and Capital Resources

As of March 31, 2021, the Company had:

Unrestricted cash, cash equivalents and short-term investments of $1.9 billion , up $1.0 billion from December 31, 2020
Outstanding debt and finance lease obligations of $2.1 billion , up $852 million from December 31, 2020
Air traffic liability of $687 million , up $154 million from December 31, 2020

The Company further enhanced its liquidity position during the first quarter of 2021, including:

In February 2021 , Hawaiian completed a private placement by Hawaiian Brand Intellectual Property, Ltd., an indirect wholly owned subsidiary of Hawaiian, and HawaiianMiles Loyalty, Ltd., an indirect wholly owned subsidiary of Hawaiian, of an aggregate of $1.2 billion principal amount of 5.75% senior secured notes due 2026.
In March 2021 , the Company completed an at-the-market equity offering (“ATM program”) of shares of its common stock. The Company issued an aggregate of 5.0 million shares through the ATM program, raising net proceeds of $109 million , of which $68 million was raised in the first quarter of 2021.
As of March 31, 2021 , the Company has received $147.3 million in grants and $20.2 million in loans pursuant to the Payroll Support Program Extension Agreement (the “PSP Extension Agreement”) with the U.S. Department of the Treasury.

In February 2021 , the Company repaid in full the $45 million loan from the U.S. Department of Treasury under the Economic Relief Program pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). This debt extinguishment resulted in the recognition of a non-operating loss of $4 million.

In February 2021 , the Company repaid $235 million of borrowings under its revolving credit facility, of which the full amount is available to the Company.

In the second quarter of 2021, the Company expects to receive approximately $25.1 million pursuant to the PSP Extension Agreement and approximately $179.7 million in Payroll Support Program funds pursuant to a Payroll Support Program 3 Agreement (“PSP3”) with the U.S. Department of Treasury under the American Rescue Plan Act of 2021.

As of March 31, 2021 , the Company had $2.1 billion in liquidity, including the undrawn portion of its revolver. This figure does not include the $205 million of additional PSP Extension Agreement and PSP3 funding that the Company expects to receive in the second quarter. The Company is confident it has the liquidity to weather the remaining near-term effects of the pandemic and is not currently looking to raise additional capital.

Guest Experience

The Company continues to adapt its policies and services to better meet the needs of its guests. In April 2021 , the Company announced that HawaiianMiles – the currency of its award-winning loyalty program – will no longer expire. This policy comes in addition to the elimination of change fees and the extension of status for Hawaiian’s elite members.

In the first quarter, the Company joined the State of Hawai’i Pre-Clear Program, allowing its guests in both domestic and participating international markets ( Japan and Korea) who are entering the state of Hawai’i to validate their pre-travel testing status at their departure airport and avoid lines upon arrival in Hawai’i.

Starting June 1, 2021 , the Company will bring back more of its signature onboard services, including drink service, complimentary Koloa Breeze cocktails, and a curated assortment of alcoholic beverages and snacks for purchase, in addition to the complimentary meals it has served throughout the pandemic, while maintaining the highest standards of safety for its guests and guest-facing team members.

The Company continues its enhanced cleaning procedures and guest-facing protocols to minimize the risk of transmission of COVID-19. Understanding that health and safety are still critical concerns for our guests, the Company will continue to focus on effective measures such as:

Frequent cleaning and disinfecting of counters and self-service check-in kiosks in airports.
Ensuring hand sanitizers are readily available for guests at airports it serves.
Requiring guests and guest facing employees to wear a face mask or covering, with guests required to wear masks from check-in to deplaning (except when eating or drinking on board).
Performing enhanced aircraft cleaning between flights and during overnight parking.

Awards and Recognition

The Company maintained its #1 national ranking for On-Time Performance for the 17th consecutive year in 2020 as well as in January and February of 2021, as reported in the U.S. Department of Transportation (DOT) Air Travel Consumer Report.

Second Quarter 2021 Outlook

The Company expects to continue to rebuild its network in the second quarter, and expects significant sequential improvement in revenue compared to the first quarter, primarily driven by strength in North America. The Company expects a sequential increase in operating expenses, excluding non-recurring items, driven by the increase in capacity as compared to the first quarter.

The table below summarizes the Company’s expectations for the second quarter ending June 30, 2021 , expressed as an expected percentage change compared to the results for the quarter ended June 30, 2019 , as applicable.

Item	Second Quarter 2021 Guidance	GAAP Equivalent	GAAP Second Quarter 2021 Guidance
ASMs	Down 30 to 33%
Total Revenue	Down 45 to 50%
Operating Expenses, excluding non-recurring items (a)	Down 20 to 24%	Operating Expenses (a)	Down 35 to 39%
Interest Expense	$30 million
Adjusted EBITDAR (b)	($70) million to ($20) million
Effective Tax Rate	~21%
Fuel Price per Gallon	$1.75


(a) See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding non-recurring items.
(b) The Company is not providing a reconciliation of adjusted EBITDAR 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 2021 Outlook

The Company expects its capital expenditures for the full year of 2021 to be between $50 and $60 million.

Top Copyright Photo: Hawaiian Airlines Airbus A330-243 N386HA (msn 1302) LAX (Michael B. Ing). Image: 952315.

Hawaiian aircraft slide show:

Hawaiian Airlines lands in the Lone Star State

Hawaiian Airlines on April 22 celebrated the inauguration of its twice-weekly nonstop service between Austin-Bergstrom International Airport (AUS) (above) and Honolulu’s Daniel K. Inouye International Airport (HNL). Hawai’i’s hometown carrier introduced its in-house music and dance group, The Hawaiian Airlines Serenaders, to the “Live Music Capital of the World” as it welcomed guests aboard its first flight to Hawai’i.

Flight HA81 departs Austin on Thursday and Sunday at 10:10 a.m. with a 1:30 p.m. scheduled arrival in Honolulu, allowing guests to check in to their accommodations and begin exploring O’ahu or connect to any of Hawaiian’s four Neighbor Island destinations. The flight from Honolulu to Austin, HA82, departs on Wednesday and Saturday at 10 a.m. and arrives at 10:10 p.m.

Hawaiian will increase AUS-HNL service to three weekly flights from May 28 through Aug. 13 to meet summer travel demand.

In recognition of the inaugural service coinciding with Earth Day, Hawaiian encouraged guests heading to Hawai’i to travel pono – responsibly – by gifting them a reusable utensil kit, part of the airline’s new eco-minded collection of products that that launched this week.

Above Copyright Photo: Fernandez Imaging.

Top Copyright Photo: Fernandez Imaging.

Hawaiian Airlines begins ticket sales for nonstop Phoenix-Maui Flights

Hawaiian Airlines has begun ticket sales for nonstop service between Phoenix (PHX) and Maui (OGG). Hawaiian’s four-times-weekly flights – the only daytime service connecting Phoenix and Kahului – will be offered May 21 through Aug. 15, making it convenient for Arizonans to visit the Valley Isle in time for the Memorial Day holiday and the summer travel season.

Flight HA57 will depart Phoenix at 7 a.m. on Tuesday, Thursday, Saturday and Sunday , arriving in Kahului at 10:25 a.m. The flight from Kahului to Phoenix, HA58, departs at 10:40 a.m. on Monday, Wednesday, Friday and Saturday, with a 7:25 p.m. arrival.

Hawaiian’s summer Phoenix – Maui flights complement Hawaiian’s daily nonstop service to Honolulu, which the carrier originally launched in 2002. Hawaiian today operates the most nonstop flights between the US. Mainland and Maui , including via Los Angeles, Long Beach, Oakland, Portland, San Diego, Seattle, San Francisco, San Jose, and Sacramento.

Hawaiian Airlines launches Ontario-Honolulu service

Hawaiian Airlines on March 17 inaugurated five-times-weekly nonstop service to Honolulu (HNL) from Ontario (ONT), giving Inland Empire travelers a convenient way to experience the carrier’s award-winning hospitality on their way to a Hawai‘i vacation. Hawaiian’s Ontario-Honolulu service – which will be offered daily starting May 24 to meet summer demand – expands options for Greater Los Angeles residents who have enjoyed the airline’s nonstop flights to the Hawaiian Islands from Los Angeles (LAX) and Long Beach (LGB).

The Hawaiian Airlines Serenaders performed for guests at Ontario International Airport

Guests boarding Hawaiians’ inaugural flight to Honolulu received flower lei and were treated to Hawaiian music and dance. Flight HA73 departs Ontario at 9:05 a.m. on Monday, Wednesday, Friday, Saturday and Sunday, with a 12:20 p.m. scheduled arrival time in Honolulu, giving guests ample time to settle into their accommodations and begin exploring O‘ahu or to connect to any of Hawaiian’s four Neighbor Island destinations. The flight from Honolulu to Ontario, HA74, departs at 1:05 p.m. and arrives at 9:35 p.m. on Tuesday, Thursday, Friday, Saturday and Sunday.

Jeff Helfrick, vice president of airport operations at Hawaiian Airlines and Keoni Martin participate in a blessing of HA73

Hawaiian, the nation’s most punctual airline for 17 straight years, will service the ONT-HNL route with its modern Airbus A321neos, a quiet and fuel-efficient aircraft with 16 luxurious leather recliners in First Class, 44 Extra Comfort seats and 129 Main Cabin seats.

Hawaiian Airlines aircraft photo gallery:

Hawaiian Airlines aircraft slide show:

Hawaiian connects Hawaii nonstop with Florida

Hawaiian Airlines has made this announcement:

Floridians yearning for a Hawai‘i vacation can now conveniently travel from the Sunshine to the Aloha state with Hawaiian Airlines’ new, twice-weekly nonstop service between Orlando (MCO) and Honolulu (HNL). Hawai‘i’s hometown carrier this morning welcomed guests with flower lei, and Hawaiian music and dance as they boarded the first scheduled commercial flight connecting Florida and Hawai‘i.

Hawaiian will increase MCO-HNL service to three weekly flights from June 1 through Aug. 10 to meet summer travel demand.

Dancers and musicians performed at the inaugural ceremony for HA85 at Orlando International Airport

Prior to the start of Hawaiian’s service, Orlando was one of the largest U.S. travel markets to the Hawaiian Islands without nonstop flights. A sought-after destination for Hawai’i residents visiting its world-renowned attractions, Orlando becomes Hawaiian’s third Eastern gateway city – along with New York (JFK) and Boston (BOS).

Flight HA85 departs Orlando on Tuesday and Saturday at 8:15 a.m. with a 2:05 p.m. scheduled arrival in Honolulu, allowing guests to check in to their accommodations and begin exploring O‘ahu or connect to any of Hawaiian’s four Neighbor Island destinations. The flight from Honolulu to Orlando, HA86, departs on Thursday and Sunday at 5:15 p.m. and arrives at 7 a.m. the next day. Hawaiian’s increased seasonal summer schedule will include additional departures from MCO on Thursdays and from HNL on Tuesdays.

HA85 departed MCO with a water cannon salute to mark the inaugural service

Hawaiian Airlines starts Long Beach-Maui service

Hawaiian Airlines on March 10 began nonstop service between Long Beach (LGB) and Kahului, Maui (OGG), welcoming Southern California travelers onboard with flower lei and the convenience of a second daily flight to Hawai‘i.

Hawai‘i’s hometown airline became the first carrier to connect Long Beach to the Hawaiian Islands when it started Honolulu service in the summer of 2018.

Photo credit: Long Beach Airport

Hawaiian’s Airbus A321neo departing Long Beach Airport for Maui’s Kahului Airport.

Flight HA72 departs Long Beach daily at 8:35 a.m. with a 12:35 p.m. scheduled arrival time on Maui, giving guests ample time to settle in their accommodations and enjoy their first afternoon on the Valley Isle. The flight from Maui to Long Beach, HA71, departs at 12:45 p.m. and arrives at 8:05 p.m.

Photo credit: Long Beach Airport

Hawaiian Airlines’ guests received fresh lei and gifts while boarding the inaugural LGB-OGG flight Wednesday morning.

Hawaiian Airlines aircraft photo gallery:

Hawaiian Airlines aircraft slide show:

Hawaiian Airlines maintains its on-time performance record for 17th consecutive year

Hawaiian Airlines made this announcement:

In a year that tested the airline industry, Hawaiian Airlines held on to its top spot as the nation’s most punctual carrier. For the 17th consecutive year, Hawaiian has enjoyed the best on-time performance record with 87.5 percent of its flights arriving on time last year, according to the U.S. Department of Transportation. Hawaii’s hometown airline began its on-time performance streak in 2004.

“I couldn’t be prouder of our team members for overcoming the most challenging year in our industry’s history to ensure our guests continued to enjoy our leading on-time reliability,” said Peter Ingram, president and CEO at Hawaiian Airlines. “My mahalo goes out to each member of our ‘ohana for their dedication to our guests during these exceptionally trying times.”

In 2020, as a result of suppressed demand and travel restrictions caused by the COVID-19 pandemic, Hawaiian operated a reduced flight network and suspended most of its international routes. As the state of Hawai‘i reopens for travel, Hawaiian has gradually resumed nonstop service connecting the islands with 16 U.S. gateway cities, more than any other airline, and restarted flights between Honolulu and Japan and South Korea. In March and April, Hawaiian will launch four new North America routes, including nonstop service between Honolulu and Austin, Ontario, Calif. and Orlando, as well as daily nonstop service between Long Beach and Maui.

The U.S. DOT’s monthly Air Travel Consumer Report ranking the nation’s 16 largest air carriers is available online at www.dot.gov/individuals/air-consumer/air-travel-consumer-reports.

Did you know HA once operated DC-3 one-day tours? A look back:

In 1963, Hawaiian Airlines began one-day tours of the three major islands. The first such excursion by any airline, passengers could peer through 5-foot panoramic windows of a DC-3 Viewmaster (below).

Hawaiian Airlines aircraft photo gallery:

Hawaiian Airlines aircraft slide show:

Hawaiian to add Austin, Ontario and Orlando

Hawaiian Airlines has made this announcement:

Hawaiian Airlines is bringing Hawai‘i closer to three more U.S. mainland cities: Austin, Texas; Ontario, Calif.; and Orlando, Fla. Travelers will be able to enjoy the carrier’s award-winning hospitality onboard nonstop flights from those airports to Honolulu beginning next year. Hawai‘i’s hometown airline will also expand service at Long Beach (LGB) with daily nonstop flights to Kahului, Maui (OGG), starting March 9, 2021.

Beginning March 11, 2021 Hawaiian will offer two weekly flights between Honolulu (HNL) and Orlando International Airport (MCO). Orlando, in Central Florida, one of the largest U.S. travel markets to Hawai‘i without nonstop service and a popular destination for Hawai’i residents visiting its world-renowned attractions, will join Boston (BOS) and New York (JFK) as Hawaiian’s third Eastern gateway city.

All guests will enjoy island-inspired complimentary meals and the roominess and superior comfort of Hawaiian’s 278-seat Airbus A330 aircraft, which feature 18 First Class lie-flat leather seats arranged in a 2-2-2 configuration tailored for couples, families and honeymooners, as well as business travelers. Hawaiian’s A330s are also equipped with 68 of its popular Extra Comfort premium economy seats providing more legroom and enhanced amenities, in addition to 192 Main Cabin seats.

Travelers on Hawaiian’s nonstop flights to Honolulu from Orlando and Austin will be able to enjoy a premium experience in the comfort of the airline’s lie-flat seating on the First Class cabin of its Airbus A330 aircraft.

In California, Hawaiian will connect Honolulu and Ontario International Airport (ONT) with five weekly nonstop flights beginning March 16. The airline will serve the route with Airbus A321neos, a quiet and fuel-efficient aircraft with 16 luxurious leather recliners in First Class, 44 Extra Comfort seats and 129 Main Cabin seats. Ontario will complement Hawaiian’s existing service at Los Angeles (LAX) and growing presence at Long Beach.

Hawaiian will welcome travelers from Ontario, Calif., to Honolulu and from Long Beach to Maui with nonstop flights operated by its quiet and fuel-efficient Airbus A321neo aircraft.

On April 21, 2021 Austin will become the first south-central and 16^th U.S. city in Hawaiian’s network, with two weekly Airbus A330 flights linking Hawai‘i with the capital of Texas and the “Live Music Capital of the World.” Hawai‘i is a popular destination among travelers from the Central Texas region, and in particular from Austin, the fastest-growing U.S. metro area in 2019.

Travelers planning a Hawai‘i vacation can visit Hawaiian’s “What to Expect” website to learn about the latest state of Hawai‘i entry requirements and its Safe Travels program. As a state of Hawai‘i trusted testing partner, Hawaiian is offering its guests dedicated, pre-travel COVID-19 testing services that guarantee processing times within 24-36 hours so they can receive negative results prior to departure and be exempted from quarantine.

Below is the full schedule for Hawaiian’s new routes:

Long Beach (LGB)-Kahului, Maui (OGG)

Flight	Route	Departs Daily	Arrives Daily	Start Date
HA72	OGG-LGB	12:45 p.m.	8:05 p.m.	March 9
HA71	LGB-OGG	8:35 a.m.	12:35 p.m.	March 10

Orlando (MCO)-Honolulu (HNL)

Flight	Route	Days of Week	Departs	Arrives	Start Date
HA86	HNL-MCO	Thu/Sun	5:15 p.m.	7 a.m. (+1 day)	March 11
HA85	MCO-HNL	Tue/Sat	8:15 a.m.	2:05 p.m.	March 13

Ontario (ONT)-Honolulu (HNL)

Flight	Route	Days of Week	Departs	Arrives	Start Date
HA74	HNL-ONT	Tue/Thu/Fri/Sat/Sun	1:05 p.m.	9:35 p.m.	March 16
HA73	ONT-HNL	Mon/Wed/Fri/Sat/Sun	9:05 a.m.	12:20 p.m.	March 17

Austin (AUS)-Honolulu (HNL)

Flight	Route	Days of Week	Departs	Arrives	Start Date
HA82	HNL-AUS	Wed/Sat	10 a.m.	10:10 p.m.	April 21
HA81	AUS-HNL	Thu/Sun	10:10 a.m.	1:30 p.m.	April 22

Hawaiian Airlines aircraft photo gallery:

Hawaiian Airlines aircraft slide show:

Hawaiian Airlines offers HawaiianMiles redemption for COVID-19 mail-in test kit

Hawaiian Airlines has became the first U.S. carrier to allow members in its loyalty program to redeem miles for a pre-travel COVID-19 test. HawaiianMiles members across the United States can redeem 14,000 HawaiianMiles to order a mail-in test kit by Vault Health, a state of Hawai‘i trusted testing partner.

The redemption offer will be available to HawaiianMiles members for a limited time only. Members who choose to redeem their miles for a test kit will receive a confirmation email which includes a link to order the COVID-19 mail-in test kit from the Vault Health website.

“Our at-home supervised saliva COVID test provides a safe, convenient and reliable result delivered pre-travel,” said Vault Health Founder and CEO Jason Feldman. “We are excited to work with Hawaiian Airlines who continues to innovate on behalf of their customers making travel easier and safer for everyone.”

The test kit, which is available for travelers of all ages including children, will be mailed to guests who will self-collect their saliva sample with assistance from a testing supervisor in a video call. The kit is then express shipped to a lab, which will process and analyze the sample and provide travelers their results electronically within 24 hours of receiving the sample for an overall turnaround time under 72 hours.

Hawaiian Holdings loses $97.1 million in the third quarter, delays 787 Dreamliner deliveries

Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., today reported its financial results for the third quarter of 2020.

Third Quarter 2020 – Key Financial Metrics
	GAAP	YoY Change	Adjusted	YoY Change
Net Income	($97.1M)	($177.2M)	($172.7M)	($254.1M)
Diluted EPS	($2.11)	($3.81)	($3.76)	($5.48)
Pre-tax Margin	(189.0)%	(203.4) pts.	(321.4)%	(336) pts.

“The COVID-19 pandemic and State of Hawai’i quarantines continued to have a dramatic effect on our business in the third quarter,” said Peter Ingram, Hawaiian Airlines President and CEO. “Despite these monumental challenges, my colleagues throughout the business have done an incredible job adapting to the evolving environment. We have taken action to reduce expenses, preserve cash, bolster our liquidity and care for our guests, positioning us to begin the recovery process in earnest with the introduction of the State of Hawai’i’s pre-travel testing regime in the fourth quarter.”

Liquidity and Capital Resources

As of September 30, 2020, the Company had:

Unrestricted cash, cash equivalents and short-term investments of $979 million
Outstanding debt and finance lease obligations of $1,299 million
Air traffic liability of $515 million

Third Quarter 2020

The State of Hawai’i was under mandatory 14-day self-quarantine for all incoming travelers throughout the third quarter of 2020, and for neighbor island travel starting from August 11, 2020 and as a consequence, the Company operated an extremely limited schedule during the third quarter.

During the quarter, the Company implemented both permanent and extended voluntary leave programs with each of its workgroups, and prepared for involuntary reductions effective October 1, 2020. In total, the Company reduced its workforce by approximately 2,400 employees, or more than 32 percent of all employees, of which almost 2,100 were through voluntary means.

To increase liquidity, the Company closed on approximately $421 million of new financing during the quarter, including:

Raising approximately $114 million through the sale and leaseback of two Airbus A321neo aircraft
Raising approximately $262 million through the issuance of Enhanced Equipment Trust Certificates backed by two Airbus A330 aircraft and six Airbus A321neo aircraft
Drawing approximately $45 million of the $420 million available through the Economic Relief Program (“ERP”) loans offered under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”)

As of September 30, 2020, the Company has received $240.6 million in grants and $60.3 million in loans pursuant to the CARES Act Payroll Support Program (“PSP”), of which $38 million was received in the third quarter.

In October 2020, the Company executed an amendment with the U.S.Treasuryincreasing the total amount of the ERP loan from $420 million to $622 million, of which $577 million is undrawn; the Company has until March 2021 to determine how much of the remaining ERP funds to borrow.

Guest Experience

During the third quarter, the Company announced the following guest experience improvements:

Eliminated change fees on all domestic and international flights in order to provide guests with travel flexibility across its network
Launched a program to offer guests pre-travel COVID-19 testing through mail-in test kits and proprietary drive-through testing labs in select U.S. mainland gateways

In addition, the Company continued its enhanced cleaning procedures and revised guest-facing procedures as part of its health and safety program, which is aligned with current recommendations from leading public health authorities.

The Company currently has limited capacity to 70 percent on its flights through December 15, 2020.

Fourth Quarter 2020

The State of Hawai’i launched a pre-travel testing program for travelers entering the State on or after October 15, 2020. Travelers who choose to participate in the program can bypass the State’s mandatory 14-day quarantine with proof of a negative COVID-19 test from one of the State’s approved testing partners.

The Company expects its fourth quarter 2020 capacity to be approximately 70 percent below the capacity flown during the same period last year. As a significant portion of the Company’s costs are fixed, operating expenses are not expected to decline in proportion to the capacity decline.

In October 2020, the Company reached an agreement with Boeing to push back the timing of 787-9 deliveries under its purchase agreement for 10 aircraft. The Company now expects to take delivery of 787-9 aircraft from 2022 to 2026 with its first aircraft to be delivered in September 2022.