Category Archives: Hawaiian Holdings

Hawaiian Holdings reports 2018 third quarter financial results, down to 5 767s

Hawaiian Airlines Boeing 767-3CB ER WL N588HA (msn 33466) LAX (Ron Monroe). Image: 944044.

Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., today reported its financial results for the third quarter of 2018.

Third Quarter 2018 – Key Financial Metrics

GAAP

YoY Change

Adjusted

YoY Change

Net Income

$93.5M

+$21.9M

$96.7M

$(3.0)M

Diluted EPS

$1.84

+$0.50

$1.91

+$0.05

Pre-tax Margin

15.4%

(0.6) pts.

15.9%

(6.3) pts.

(PRNewsfoto/Hawaiian Holdings, Inc.)

“Through back-to-back hurricanes in Hawai’i and a typhoon in Japan, my colleagues minimized disruptions to operations, kept our guests safe, and supported community relief efforts all while delivering our authentic Hawaiian hospitality that is unmatched in the industry,” said Peter Ingram, Hawaiian Airlines president and CEO.  “Our healthy financial and operational performance in this eventful quarter once again demonstrated that the Hawaiian team is second to none.”

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

Shareholder Returns, Liquidity and Capital Resources

The Company returned $37.3 million to shareholders in the third quarter through $31.2 million in shares repurchased and $6.1 million in dividends paid.

On October 19, 2018 the Company’s Board of Directors declared a quarterly cash dividend of 12 cents per share to be paid on November 30, 2018 to all shareholders of record as of November 16, 2018.

As of September 30, 2018, the Company had:

  • Unrestricted cash, cash equivalents and short-term investments of $591 million
  • Outstanding debt and capital lease obligations of $718 million

Third Quarter 2018 Highlights

Commercial

  • Expanded its cargo services with the launch of its All-Cargo Neighbor Island service between Honolulu’s Daniel K. Inouye International Airport (HNL), Lihu’e Airport (LIH) and Hilo International Airport (ITO).  The All-Cargo service, which currently consists of two ATR-72 aircraft, is expected to expand in 2019 with the addition of flights between Honolulu (HNL) and Maui’s Kahului Airport (OGG) and Hawai’i Island’s Kona International Airport (KOA).

Operational

  • Carried more than 3 million guests across its network, a record for the third quarter.

Partnerships

  • Enhanced its comprehensive partnership with Japan Airlines with the implementation of reciprocal frequent flyer benefits for HawaiianMiles and JAL Mileage Bank members effective October 2018.  The enhanced program is the second phase of the comprehensive partnership launched in March 2018 with codeshare flights.

New Routes

  • Announced its second East Coast route with new five-times-a-week non-stop service between Boston’s Logan International Airport (BOS) and Honolulu (HNL) beginning April 2019.

Copyright Photo: Michael Carter.

Fleet and Financing

  • Took delivery of three Airbus A321neo aircraft between July and August, increasing the size of its A321neo fleet to nine aircraft.
  • Retired two of its Boeing 767 aircraft in the third quarter as part of the planned exit from its 767 fleet.  Retired an additional 767 aircraft subsequent to quarter end, decreasing the size of its 767 fleet to five aircraft.
  • Completed a sale-leaseback transaction for one of its Airbus A330-200 aircraft.
  • Subsequent to quarter end, signed a definitive agreement with General Electric for the acquisition of GEnx engines to power its Boeing 787-9 fleet to be delivered starting in 2021.

Fourth Quarter and Full Year 2018 Outlook

The table below summarizes the Company’s expectations for the fourth quarter and full year ending December 31, 2018 expressed as an expected percentage change compared to the recast results for the quarter and year ended December 31, 2017, as applicable.

As a result of discretionary contributions to defined benefit and other postretirement plans made by the Company in the third quarter, and the resulting impact of the Tax Cuts and Jobs Act, the Company expects its effective tax rate for the full year ending December 31, 2018 to be in the range of 21 percent to 23 percent.

Top Copyright Photo: Hawaiian moves one step closer to the retirement of the Boeing 767-300 fleet, now down to five aircraft. Hawaiian Airlines Boeing 767-3CB ER WL N588HA (msn 33466) LAX (Ron Monroe). Image: 944044.

Hawaiian aircraft slide show:

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Hawaiian Airlines updates expected third quarter and full year 2018 metrics

Delivered on June 15, 2018

Hawaiian Airlines, Inc., a subsidiary of Hawaiian Holdings, Inc., has updated its expectations for certain third quarter and full year 2018 financial metrics.

Third Quarter 2018 Outlook

The Company has revised certain of its expectations for the third quarter ending September 30, 2018that were previously provided on July 24, 2018.

Specifically, the Company lowered its expectations for third quarter operating revenue per available seat mile (RASM) as a result of service disruptions, passenger cancellations and booking interruptions stemming from Hurricane Lane that affected the Hawaiian island chain in late August 2018.

The table below summarizes the Company’s revised expectations, expressed as an expected percentage change compared to the results for the third quarter ended September 30, 2017.

Prior Third Quarter

2018 Guidance

Revised Third Quarter
2018 Guidance

Operating revenue per ASM (RASM)

Down 1.5% – Up 1.5%

Flat – Down 2.0%

Full Year 2018 Outlook

The Company has also revised certain of its expectations for the full year ending December 31, 2018that were previously provided on July 24, 2018.

Specifically, the Company lowered its expectations for full year ASMs and gallons of jet fuel consumed following the planned suspension of its thrice-weekly nonstop service between Honolulu’s Daniel K. Inouye International Airport (HNL) and Beijing Capital International Airport (PEK) effective mid-October 2018.

The Company’s expectations for full year operating costs per ASM (CASM) excluding aircraft fuel and special items remain unchanged.

The table below summarizes the Company’s revised expectations, expressed as an expected percentage change compared to the results for the year ended December 31, 2017.

Prior Full Year 2018
Guidance

Revised Full Year 2018
Guidance

Available seat miles (ASMs)

Up 5.5 – 7.5%

Up 5.0 – 7.0%

Gallons of jet fuel consumed (000s)

Up 4.0 – 6.0%

Up 3.5 – 5.5%

Copyright Photo: Hawaiian Airlines Airbus A321-271N WL N212HA (msn 8129) LGB (Michael B. Ing). Image: 943083.

Hawaiian aircraft slide show:

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Hawaiian Holdings reports 2018 second quarter financial results

Delivered on June 30, 2018

Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., today reported its financial results for the second quarter of 2018.

Second Quarter 2018 – Key Financial Metrics

GAAP

YoY Change

Adjusted

YoY Change

Net Income

$79.5M

+$2.6M

$73.3M

$(8.4)M

Diluted EPS

$1.56

+$0.13

$1.44

$(0.08)

Pre-tax Margin

14.8%

(3.7) pts.

13.7%

(5.9) pts.

“Our second quarter performance reflects our continued position as the carrier of choice for Hawai’i,” said Peter Ingram, Hawaiian Airlines president and CEO.  “The Hawaiian team showed their mettle yet again, producing solid financial and operational results in a quarter marked by rising fuel prices, elevated industry capacity, and headline-grabbing volcanic activity on the Big Island of Hawai’i.  We generated more revenue and carried more guests than in any second quarter in our history by executing our plan and running a safe and reliable airline.  I couldn’t be more proud of my colleagues.”

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

Shareholder Returns, Liquidity and Capital Resources

As of June 30, 2018, the Company had:

  • Unrestricted cash, cash equivalents and short-term investments of $593 million
  • Outstanding debt and capital lease obligations of $692 million

The Company returned $8.6 million to shareholders in the second quarter through $6.1 million in dividends and $2.5 million in share repurchases.

On July 20, 2018, the Company’s Board of Directors declared a quarterly cash dividend of 12 cents per share to be paid on August 31, 2018, to all shareholders of record as of August 17, 2018.

Second Quarter 2018 Highlights

Operational

  • Carried more than 3 million guests across its network, a record for the second quarter.

Partnerships

  • Together with Japan Airlines, filed an application with the U.S. Department of Transportation (DOT) and Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) seeking antitrust immunity to create a joint venture that promises significant consumer benefits and the opportunity for service expansion.  The antitrust immunized joint venture will build upon the broad codeshare partnership the two carriers initiated in March 2018.

New Routes and increased frequencies

  • Expanded its routes to Southern California with the launch of new daily non-stop service between Long Beach Airport (LGB) and Honolulu’s Daniel K. Inouye International Airport (HNL).
  • Announced expanded seasonal winter service to International destinations, including:
    • increasing non-stop service between Seoul’s Incheon International Airport (ICN) and Honolulu (HNL) to daily flights between mid-January and early-February 2019; and
    • increasing non-stop service between Sapporo’s New Chitose Airport (CTS) and Honolulu (HNL) with up to five weekly flights during the first half of February 2019.
  • Announced expanded service to Northern California with new daily non-stop flights between Sacramento International Airport (SMF) and Maui’s Kahului Airport (OGG) beginning April 2019.

Product and Loyalty

  • Completed remodeling its Airbus A330 fleet with lie-flat premium seats and increased Extra Comfort capacity.
  • Together with Barclays, Mastercard, and Bank of Hawai’i, launched an enhanced Hawaiian Airlines World Elite Mastercard and Hawaiian Airlines Business Mastercard that allow cardmembers to earn more miles faster and embark on their next vacation sooner through a refreshed rewards structure.

Fleet and Financing

  • Subsequent to quarter end, secured its next long-haul aircraft with the signing of a definitive purchase agreement with Boeing for the purchase of 10 Boeing 787-9 aircraft (below), including purchase rights for an additional 10 aircraft.
  • Took delivery of four Airbus A321neo aircraft between May and June (top), increasing the size of its Airbus A321neo fleet to six aircraft.
  • Took delivery of one ATR 42 turboprop aircraft in June, increasing the size of its passenger turboprop fleet to four aircraft.
  • Entered into two Japanese Yen-denominated debt financings, each collateralized by an Airbus A321neo aircraft.

Third Quarter and Full Year 2018 Outlook

The table below summarizes the Company’s expectations for the third quarter ending September 30, 2018, and the full year ending December 31, 2018, expressed as an expected percentage change compared to the recast results for the quarter ended September 30, 2017, or the full year ended December 31, 2017, as applicable.

For the full year ending December 31, 2018, the Company expects its effective tax rate to be in the range of 24% to 26%.

Third Quarter

GAAP Third Quarter

Item

2018 Guidance

GAAP Equivalent

2018 Guidance

ASMs

Up 7.5 – 9.5%

Operating revenue per ASM

Down 1.5% – Up 1.5%

Cost per ASM excluding fuel and special items (a)

Up 0.5 – 3.5%

Cost per ASM (a)

Up 6.8 – 10.3%

Gallons of jet fuel consumed

Up 5.0 – 7.0%

Economic fuel cost per gallon (b)(c)

$2.10 – $2.20

Fuel cost per gallon (b)

$2.21 – $2.31

Full Year

GAAP Full Year

Item

2018 Guidance

GAAP Equivalent

2018 Guidance

ASMs

Up 5.5 – 7.5%

Cost per ASM excluding fuel and special items (a)

Up 1.0 – 3.0%

Cost per ASM (a)

Up 6.3 – 9.0%

Gallons of jet fuel consumed

Up 4.0 – 6.0%

Economic fuel cost per gallon (b)(c)

$2.05 – $2.15

Fuel cost per gallon (b)

$2.15 – $2.25

(a)

See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding aircraft fuel and special items.

(b)

Fuel cost per gallon estimates are based on the July 12, 2018, fuel forward curve.

(c)

See Table 3 for a reconciliation of GAAP fuel costs to economic fuel costs.

New Revenue Recognition Accounting Standard

As of January 1, 2018, the Company adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, which affects the Company’s accounting for frequent flyer mileage sales, passenger revenue, other operating revenue, and selling costs.  The prior periods presented have been recast to reflect adoption of these new standards.

For additional details on the impact of the adoption of the new standards, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, and the Company’s subsequent periodic filings beginning with its Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

Top Copyright Photo (all others by Hawaiian): Hawaiian Airlines Airbus A321-271N WL N209HA (msn 8186) LGB (Michael B. Ing). Image: 942911.

Hawaiian Airlines aircraft slide show:

Hawaiian Holdings reports fourth quarter and record earnings in 2017

Hawaiian Airlines Boeing 767-3CB ER WL N592HA (msn 33468) SEA (Michael B. Ing). Image: 921922.

Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., reported its financial results for the fourth quarter and full year 2017.

Fourth Quarter 2017 – Key Financial Metrics

GAAP

YoY Change

Adjusted

YoY Change

Net Income

$172.1M

+$170.2M

$57.5M

$(11.3)M

Diluted EPS

$3.29

+$3.25

$1.10

$(0.18)

Pre-tax Margin

16.0%

+15.4 pts.

13.6%

(4.0) pts.

 

Full Year 2017 – Key Financial Metrics

GAAP

YoY Change

Adjusted

YoY Change

Net Income

$364.0M

+$128.6M

$301.1M

+$21.1M

Diluted EPS

$6.82

+$2.46

$5.64

+$0.45

Pre-tax Margin

15.2%

(0.3) pts.

17.6%

(0.8) pts.

“We’re delighted to report record earnings for 2017 after our fourth quarter results cap an extremely strong year for Hawaiian” said Mark Dunkerley, Hawaiian Airlines president and CEO.  “Robust demand in all of our major geographies and moderate industry capacity growth offset the rising price of fuel.  We carried more guests this year than ever before and set new records for fourth quarter and full year revenue.  These results are the product of the tireless efforts of the 6,600 employees who deliver authentic Hawaiian hospitality on the ground and in the air every single day.

Looking ahead, 2018 stands to be a year that Hawaiian enters into the last phase of a strategy mapped out over a decade ago.  With new aircraft, new markets, and product enhancements tailored to the needs of the Hawai’i traveler, we are better equipped to compete today than at any time in our past.  We look forward to the year ahead and all that it has in store.”

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

On October 12, 2017, the Company announced the initiation of a quarterly cash dividend of 12 cents per share, the first of which was paid on November 30, 2017 to all stockholders of record as of November 17, 2017.

In addition, the Company repurchased approximately 2.5 million shares of common stock for approximately $100 million in 2017.  The Company also announced a new $100 million stock repurchase program in effect through December 31, 2019.

As of December 31, 2017 the Company had:

  • Unrestricted cash, cash equivalents and short-term investments of $460 million.
  • Outstanding debt and capital lease obligations of $571 million.

2017 Highlights

Operational

  • Carried a record 11.5 million passengers in 2017, a 4.1% increase over the previous year.
  • Completed new hangar facility which will provide significant efficiencies moving forward.
  • Introduced new uniforms which complements brand refresh that was unveiled earlier in the year.

New routes and increased frequencies

  • North America
    • Started operating new daily non-stop service between Portland International Airport (PDX) and Maui’s Kahului Airport (OGG) in January 2018.
    • Announced new daily non-stop service between San Diego International Airport (SAN) and Kahului (OGG) as well as between Long Beach Airport (LGB) and Honolulu’s Daniel K. Inouye International Airport (HNL) with both expected to start in May 2018.
    • Extended seasonal non-stop service to year-round non-stop service between Los Angeles International Airport (LAX) and Kaua’i’s Līhu’e Airport (LIH).
    • Commenced summer seasonal service with daily non-stop flights between OaklandInternational Airport (OAK) and Līhu’e (LIH) and thrice weekly flights between Los Angeles (LAX) and Kona International Airport (KOA).
    • Announced extended service between Los Angeles (LAX) and both Kona (KOA) and Kahului (OGG), between Oakland (OAK) and both Līhu’e (LIH) and Kona (KOA), and between San Francisco International Airport (SFO) and Honolulu (HNL).
  • International
    • Announced expansion of non-stop service between New Zealand’s Auckland Airport (AKL) and Honolulu (HNL) starting in March 2018.
    • Announced expanded seasonal summer flights to include daily non-stop service between Narita International Airport (NRT) and Honolulu (HNL).
  • Neighbor Islands
    • Launched daily round trip service between Maui’s Kapalua Airport (JHM) and both Honolulu (HNL) and Kahului (OGG), and between Līhu’e (LIH) and Kona (KOA).

Partnerships

  • Announced a new partnership with Japan Airlines (JAL) that provides for extensive code sharing, lounge access and frequent flyer program reciprocity, taking effect on March 25, 2018 (subject to government approval). Also announced the intention to establish a joint venture with JAL designed to provide even more choices, convenience and enhancements to the traveling public to/from Japan and beyond to multiple Asian markets.

Fleet and financing

  • Completed a sale-leaseback transaction covering three Boeing 767-300 aircraft as part of the planned exit from its Boeing 767-300 fleet.
  • Took delivery of its first two Airbus 321neo aircraft, its 24th Airbus 330-200 aircraft, and its first ATR 72 turboprop aircraft in an all-cargo configuration.
  • Entered into an agreement in January 2018 to purchase three Boeing 767-300s which it previously leased and will subsequently sell later this year in line with plans to retire its Boeing 767-300 fleet by the end of 2018.

People

  • Ratified a 63-month contract with its pilots represented by the Airline Pilots Association (ALPA).
  • Contributed $150.6 million during the year to employee benefit plans, comprised of a one-time payment of $18.5 million to fully fund and terminate the Hawaiian Airlines, Inc. Salaried & IAM Merged Pension Plan, a one-time payment of $101.9 million to settle a portion of the post-65 medical plan obligation in connection with the ratification of a contract amendment with the Air Line Pilots Association, representing its pilots, and a contribution of approximately $30.2 million, $25.5 million above the minimum required, to further reduce pension obligations.

Product and loyalty

  • Unveiled brand refresh in May 2017 which included an updated logo and aircraft livery.
  • Announced the introduction of remodeled Airbus 330-200 aircraft to its non-stop service between Sapporo’s New Chitose Airport (CTS) and Honolulu (HNL) starting in February 2018.

First Quarter and Full Year 2018 Outlook

The table below summarizes the Company’s expectations for the first quarter ending March 31, 2018 and the full year ending December 31, 2018, expressed as an expected percentage change compared to the pro forma results for the quarter ended March 31, 2017 or the year ended December 31, 2017, as applicable.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, and created a new topic (ASC 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASC 606 will replace most existing revenue recognition guidance in GAAP when it becomes effective.  ASC 606 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017.  The Company has elected to adopt the full retrospective transition method as of January 1, 2018, resulting in the restatement of all prior periods on the date of adoption. Metrics in the guidance tables below that have been impacted by ASC 606 are shown as both originally stated and on an unaudited pro forma basis.

Copyright Photo: Hawaiian Airlines is preparing to retire its last Boeing 767-300 by the end of this year. Hawaiian Airlines Boeing 767-3CB ER WL N592HA (msn 33468) SEA (Michael B. Ing). Image: 921922.

Hawaiian Airlines aircraft slide show:

Hawaiian to purchase the assets of Island Air for ‘Ohana by Hawaiian

Airline Color Scheme - Introduced 2013

Hawaiian Holdings, Inc., the parent of Hawaiian Airlines, has agreed to purchase the AOC and other assets of bankrupt Island Air for $750,000.

According to Honoluu Star Advertiser, the decision to acquire the AOC will allow ‘Ohana for Hawaiian to become a stand alone airline subsidiary. Curently, the three ‘Ohana ATR 42-500s are operated under contract by Empire Airlines.

‘Ohana by Hawaiian flights are operated by Empire Airlines and fly between:

  • Honolulu (HNL) and Molokai (MKK)
  • Honolulu (HNL) and Lanai (LNY)
  • Kahului (OGG) and Kona (KOA)
  • Kahului (OGG) and Molokai (MKK)
  • Kahului (OGG) and Hilo (ITO)
  • Lanai (LNY) and Molokai (MKK)

The ‘Ohana turboprop aircraft features a livery designed by Hilo-based artist Sig Zane and his son Kūha’o.

The aircraft are named after a significant wind on each of the islands that `Ohana by Hawaiian serves: Holo Kaomi of Paomaʻi, Lāna’i; Kaiāulu of Wai’anae, O’ahu; and Hikipua of Hālawa, Moloka’i.

Copyright Photo: Ohana by Hawaiian-Empire Airlines ATR 42-500 N804HC (msn 623) HNL (Ivan K. Nishimura). Image: 922268.

Route Map:

Video:

 

Hawaiian reports 3Q net income of $74.6 million

The first Airbus A321neo for Hawaiian

Hawaiian Holdings, Inc., the parent company of Hawaiian Airlines, Inc., reported its financial results for the third quarter of 2017.

Third Quarter 2017 – Key Financial Metrics

GAAP

YoY Change

Adjusted

YoY Change

Net Income

$74.6M

($27.9M)

$102.6M

$(0.5)M

Diluted EPS

$1.39

($0.52)

$1.92

$—

Pre-tax Margin

16.6%

(7.8) pts.

22.8%

(1.8) pts.

“The third quarter’s excellent results add to the great year we are having,” said Mark Dunkerley, Hawaiian Airlines president and CEO.  “Apart from the helpful environment characterized by low fuel prices, manageable industry capacity and strong demand for the Hawaii vacation, our team is doing a terrific job improving the company and widening the gap between us and our competitors.”

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

Liquidity and Capital Resources

On October 12, 2017, the Company announced the initiation of a quarterly cash dividend of 12 cents per share to be paid on November 30, 2017 to all stockholders of record as of November 17, 2017.

In addition, the Company repurchased approximately 1.1 million shares of common stock for approximately $46.2 million in the third quarter, which leaves $49.5 million remaining under its share repurchase program.

As of September 30, 2017, the Company had:

  • Unrestricted cash, cash equivalents and short-term investments of $619 million
  • Outstanding debt and capital lease obligations of $506 million

Third Quarter 2017 Highlights

People

  • Contributed $134.6 million during the quarter to employee benefit plans, comprised of a one-time payment of $18.5 million to fully fund and terminate the Hawaiian Airlines, Inc. Salaried & IAM Merged Pension Plan, a one-time payment of $101.9 million to settle a portion of the post-65 medical plan obligation in connection with the ratification of a contract amendment with the Air Line Pilots Association, representing its pilots, and a contribution of approximately $14.2 million, $12.7 million above the minimum required, to further reduce pension obligations.

Operational

  • Ranked #1 nationally for on-time performance for the months of June, July, and August 2017 as reported in the U.S. Department of Transportation Air Travel Consumer Report.

Partnerships

  • Announced a new partnership with Japan Airlines (JAL) that provides for extensive code sharing, lounge access and frequent flyer program reciprocity, taking effect on March 25, 2018 (subject to government approval). Also announced the intention to establish a joint venture with JAL designed to provide even more choices, convenience and enhancements to the traveling public to/from Japan and beyond to multiple Asian markets.

Increased frequencies

  • Announced the expansion of non-stop service between Honolulu’s Daniel K. Inouye International Airport (HNL) and New Zealand’s Auckland Airport (AKL) with up to five non-stop flights weekly beginning March 2018.

Product and loyalty

  • Continued remodeling the A330 fleet with the addition of lie flat premium seats and increased Extra Comfort capacity. Also announced the introduction of remodeled A330 aircraft to its non-stop service between Honolulu’s Daniel K. Inouye International Airport (HNL) and Sapporo’s New Chitose Airport (CTS) starting February 2018.

Fleet and financing

  • Took delivery of its 24th A330-200 in September.
  • Took delivery of its first ATR 72 turboprop aircraft in an all-cargo configuration in September.

Fourth Quarter and Full Year 2017 Outlook

The table below summarizes the Company’s expectations for the fourth quarter and full year ending December 31, 2017, expressed as an expected percentage change compared to the results for the quarter and full year ended December 31, 2016, as applicable.

The Company has revised its guidance range for economic fuel cost per gallon for the full year ending December 31, 2017 due to higher than expected year-to-date fuel costs and the forward fuel price curve as of October 9, 2017. The Company is also providing a guidance range for operating revenue per ASM and has adjusted its guidance ranges for cost per ASM excluding fuel and special Items, ASMs, and gallons of jet fuel consumed for the full year ending December 31, 2017.

Fourth Quarter

GAAP Fourth Quarter

Item

2017 Guidance

GAAP Equivalent

2017 Guidance

Cost per ASM excluding fuel and special items (a)

Up 3.5% to up 6.5%

Cost per ASM (a)

Down 10.3% to down 13.5%

Operating revenue per ASM

Down 1.0% to up 2.0%

ASMs

Up 4.0% to up 6.0%

Gallons of jet fuel consumed

Up 5.0% to up 8.0%

Economic fuel cost per gallon (b)(c)

$1.75 to $1.85

Fuel cost per gallon (b)

$1.72 to $1.82

 

Full Year

GAAP Full Year

Item

2017 Guidance

GAAP Equivalent

2017 Guidance

Cost per ASM excluding fuel and special items (a)

Up 6.0% to up 7.0%

Cost per ASM (a)

Up 3.6% to up 5.5%

Operating revenue per ASM

Up 5.0% to up 6.0%

ASMs

Up 3.0% to up 4.0%

Gallons of jet fuel consumed

Up 5.5% to up 6.5%

Economic fuel cost per gallon (b)(c)

$1.65 to $1.75

Fuel cost per gallon (b)

$1.64 to $1.74

Top Copyright Photo: The first Hawaiian Airbus A321neo is seen at the Airbus plant in Hamburg, Germany. Hawaiian Airlines Airbus A321-271N WL D-AYAF (N202HA) (msn 7917) XFW (Gerd Beilfuss). Image: 939629.

Hawaiian Airlines:

(a)

See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding aircraft fuel and special items.

(b)

Fuel cost per gallon estimates are based on the October 9, 2017 fuel forward curve.

(c)

See Table 3 for a reconciliation of GAAP fuel costs to economic fuel costs.

Hawaiian reports second quarter adjusted net income of $37.5 million

Hawaiian Holdings, Inc, (Hawaiian Airlines) (Honolulu) has reported the financial results of its second quarter:

Hawaiian logo-1

  • GAAP net income of $48.8 million or $0.79 per diluted share.
  • Adjusted net income, reflecting economic fuel expense and excluding loss on extinguishment of debt, of $37.5 million or $0.61 per diluted share, an increase of $15.1 million or $0.26 cents per diluted share year-over-year.
  • Adjusted pre-tax margin of 10.7% compared to 6.4% in the prior year period.
  • Unrestricted cash, cash equivalents and short-term investments of $606 million.
  • Lowered leverage ratio to 3.4x.

“We are pleased with the results for the quarter,” said Mark Dunkerley, Hawaiian Airlines president and chief executive officer. “Strong demand across our network, coupled with low fuel prices, more than compensated for the adverse impacts of the strengthening US dollar, the significant reduction in most fuel surcharges and the high levels of industry capacity growth from North America. Our financial performance for the second half of the year seems set to be a continuation of what we’ve seen so far in 2015. In this environment, the company expects to generate free cash flow, strengthen its balance sheet and improve its profit margins. As ever, the whole team has done a great job of looking after our customers, enhancing our reputation, and burnishing our brand. They have my thanks.”

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, 2015 the Company had:

  • Unrestricted cash, cash equivalents and short-term investments of $606 million.
  • Outstanding debt and capital lease obligations of approximately $947 million consisting of the following:
  1. $689 million outstanding under secured loan agreements to finance a portion of the purchase price for 11 Airbus A330-200 aircraft.
  2. $127 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.
  3. $100 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.
  4. $27 million outstanding under floating rate notes to finance the acquisition of two Boeing 767-300 ER aircraft.
  5. $4 million of outstanding convertible senior notes.

In the second quarter, the Company repurchased $4 million (principal balance) of its convertible senior notes outstanding. Repurchases to date have totaled $82 million (principal balance) or 95%, of the originally issued principal amount, thereby eliminating the need for the Company to issue 10.4 million shares when the notes may have otherwise converted to common stock.

In addition, during the second quarter the Company repurchased 0.8 million shares of its common stock for approximately $18 million under its previously announced $100 million stock repurchase program.

Second Quarter 2015 Highlights

Operational

  • Ranked #1 nationally for on-time performance for the months of March, April and May 2015.
  • Ranked as one of the top domestic airlines by Travel + Leisure for 2015.

Product and loyalty

  • The comprehensive interior retrofit of the Company’s neighbor island fleet remains on schedule for completion in the fourth quarter of 2015 with 12 of 18 Boeing 717 aircraft completed to date.

Fleet and financing

  • Added an A330-200 aircraft under lease financing and retired a Boeing 767-300 at the end of its lease.
  • Updated the fleet plan and entered into a six-year lease agreement for one A330-200 with a delivery date of summer 2016 and accelerated the planned retirement date of certain of its Boeing 767-300 aircraft.
  • Announced the purchase of three ATR 72 turbo-prop aircraft in an all-cargo configuration for expansion of its cargo service.

Schedule

  • Los Angeles to Kona, three-times-weekly, and Los Angeles to Lihu’e, four-times-weekly, summer seasonal service reintroduced in May.
  • Oakland to Kona, three-times-weekly and Oakland to Lihu’e, four-times-weekly, summer seasonal service reintroduced in May.
  • Los Angeles to Maui second daily seasonal summer service reintroduced in May.
  • Announced year round service from Los Angeles to Lihu’e, three-times-weekly, beginning in January 2016.

Read the full report: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A330-243 N396HA (msn 1488) taxies to the runway at Seattle-Tacoma International Airport (SEA).

Hawaiian Airlines aircraft slide show: AG Airline Slide Show

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