Hawaiian Holdings, Inc. (Honolulu), parent company of Hawaiian Airlines, Inc. (Honolulu), reported its financial results for the fourth quarter and full year 2013.
- Operating income grew to $34 million in the fourth quarter compared to $12 million in the prior year period. For the full year, operating income grew to $134 million compared to $129 million in the prior year period.
- Pre-tax income of $28 million in the fourth quarter compared to a loss of $6 million in the prior year period. For the full year, pre-tax income of $86 million was flat compared to the prior year period.
- GAAP net income in the fourth quarter of $17 million or $0.31 per diluted share compared to a loss of $3 million in the prior year period or $(0.07) per diluted share. For the full year, GAAP net income of $52 million or $0.98 per diluted share compared to $53 million or $1.01 per diluted share in the prior year period.
- Adjusted net income, reflecting economic fuel expense, in the fourth quarter of $12 million or $0.22 per diluted share compared to $0.1 million in the prior year period or $0.00 per diluted share. For the full year, adjusted net income, reflecting economic fuel expense, of $47 million or $0.88 per diluted share compared to $56 million or $1.06 per diluted share in the prior year period.
- Unrestricted cash and cash equivalents of $423 million compared to $406 million in the prior year period.
Mark Dunkerley, the Company’s President and Chief Executive Officer, commented that “the fourth quarter’s results continued the trend in improving financial performance after a difficult start to the year. Demand remains strong in our markets and we have strategies to mitigate cost pressures. We are looking forward to the year ahead confident in the great job done by our employees taking care of our customers on the ground and in the air. They remain the core asset of our business and the source of great pride among us all.”
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 December 31, 2013 the Company had:
- Unrestricted cash and cash equivalents of $423 million.
- Available borrowing capacity of $67 million under Hawaiian’s Revolving Credit Facility.
- Outstanding debt and capital lease obligations of approximately $806 million consisting of the following:
- $430 million outstanding under secured loan agreements to finance a portion of the purchase price for seven Airbus A330-200 aircraft.
- $154 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.
- $111 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.
- $35 million outstanding under secured floating rate notes for two Boeing 767-300 ER aircraft.
- $76 million of outstanding Convertible Senior Notes.
- Ranked #1 nationally for on-time performance for all reported months in 2013 except for January by the U.S. Department of Transportation Air Travel Consumer Report.
- Ranked the #1 domestic carrier for travel to Hawai’i by Travel + Leisure.
- Successfully implemented multiple upgrades to our Revenue Management and Inventory Systems.
Fleet and financing
- Added five new A330-200 aircraft and returned / retired four Boeing 767-300.
- Took delivery of one ATR 42-500 twin-turboprop aircraft to inaugurate new service to Moloka’i and Lana’i in 2014.
- Executed a purchase agreement with Airbus for 16 new A321neo aircraft for delivery between 2017 and 2020, with purchase rights for an additional nine aircraft. The long-range, single-aisle aircraft will complement Hawaiian’s existing fleet of twin-aisle aircraft used for long-haul flying between Hawai’i and the U.S. West Coast.
- Financed six Airbus A330-200 aircraft deliveries (one delivery in 2013 and five 2014 deliveries) with Enhanced Equipment Trust Certificates (EETC) at a blended rate of 4.13%.
Product and loyalty
- Enhanced inflight experience on Boeing 767-300 aircraft by becoming the only U.S. carrier to offer the Apple iPad mini as a replacement for the prior portable entertainment system.
- Entered into a new credit card agreement with Barclays Card for a new co-branded credit card effective January 1, 2014.
- Announced the introduction of new Extra Comfort economy seating on all A330-200 aircraft beginning in the third quarter 2014.
- Expanded our frequent flyer partnership with American Airlines.
- Entered into new frequent flyer and code-share agreements with China Airlines.
New routes and increased frequencies
- Honolulu to Auckland, New Zealand three-times-weekly service launched in March.
- Honolulu to Sendai, Japan three-times-weekly service launched in June.
- Honolulu to Taipei, Taiwan three-times-weekly service launched in July.
- Announced Honolulu to Beijing, China three-times-weekly service beginning in April 2014, pending government approval.
- Announced the reintroduction of daily non-stop service from Honolulu to Oakland beginning in January 2014, an increase from four-times-weekly. Also, announced seasonal service, during the summer of 2014, between Oakland and Kona, three-times-weekly and between Oakland and Lihu’e, four-times-weekly.
- Announced seasonal service, during the summer of 2014 between Los Angeles and Kona, three-times-weekly and between Los Angeles and Lihu’e, four-times-weekly.
- Announced daily non-stop service from Maui to Los Angeles, beginning in July 2014.
- Announced additional service from Honolulu to Brisbane from three-times-weekly to four-times-weekly, beginning in March 2014.
First Quarter and Full Year 2014 Outlook
The table below summarizes the Company’s expectations for the first quarter ending March 31, 2014 and the full year ending December 31, 2014, expressed as an expected percentage change compared to the results for the quarter ended March 31, 2013 or the year ended December 31, 2013, as applicable (the results for which are presented for reference).
|Cost per ASM Excluding Fuel (cents)||8.28||Up 5% to up 8%|
|Passenger Revenue Per ASM (cents)||11.11||Up 4% to up 7%|
|Operating Revenue Per ASM (cents)||12.37||Up 4.5% to up 7.5%|
|ASMs (millions)||3,965.8||Up 1% to up 3%|
|Gallons of jet fuel consumed (millions)||53.9||Up 0.5% to up 2.5%|
|Cost per ASM Excluding Fuel (cents)||7.88||Up in the low single digits|
|ASMs (millions)||16,785.8||Up 4% to up 7%|
Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 767-33A ER N587HA (msn 33421) taxies at Seattle-Tacoma International Airport.