25 October, 2023

Hawaiian Holdings Reports 2023 Third Quarter Financial Results

Hawaiian Holdings Reports 2023 Third Quarter Financial Results
 Delivering for the Future With Launch of Freighter Service and Dreamliner Ticket Sales


Ticket sales started on September 6, 2023, for flights on the Boeing 787-9 Dreamliner, which is expected to enter service on select West Coast routes commencing on April 15, 2024
Hawaiian Holdings, the parent company of Hawaiian Airlines, Inc. this week reported its financial results for the third quarter of 2023.

"I am immensely proud of our team's continued focus on moving our company forward, particularly in a quarter affected by the tragic wildfires in Maui," said Hawaiian Airlines President and CEO Peter Ingram. "Underlying demand remains resilient, our brand and business model are core strengths and the major investments we are making now will create substantial value in 2024 and beyond."

The Company reported that third-quarter revenue was trending positively in July, but the devastating wildfires in Lahaina in West Maui on August 8, 2023 caused a sharp decrease in traffic to Maui. With most areas of the island unaffected by the fires and portions of West Maui reopening to tourism on October 8, 2023, demand for travel to Maui is recovering but remains below historical levels. Hawaiian's third quarter schedule was negatively impacted by the July 25, 2023 announcement from RTX, the parent company of Pratt & Whitney, of anticipated accelerated removals and inspections of a significant portion of the PW1100G-JM engine fleet, which powers Hawaiian's A321neo aircraft. This unanticipated time out of service resulted in, among other things, lower-than-expected capacity growth in the quarter.

Operating revenue was down 1.8% from the third quarter of 2022 on 4.1% higher capacity across Hawaiian's network. Passenger traffic remained strong on Hawaiian's Japan routes in the third quarter of 2023. International revenue increased 90.9% from the third quarter of 2022 on a 43.6% increase in capacity.

Maui Wildfires Relief


In the immediate aftermath of the tragic wildfires that devastated the town of Lahaina in West Maui, Hawaiian increased its schedule to evacuate more than 17,000 displaced visitors and residents within the first 72 hours and to transport vital supplies and first responders. Within the first week of the disaster, Hawaiian carried 54,000 tons of emergency supplies. Hawaiian and its HawaiianMiles members donated millions of miles to the American Red Cross of Hawai'i, providing the nonprofit with the equivalent of 18,000 free seats to carry volunteers and personnel to and from Maui. Hawaiian also donated $150,000 in cash to charities including the Hawai'i Foodbank, the Maui Food Bank and the Hawaii Community Foundation's Maui Strong Fund. And as travel to Maui resumed, Hawaiian led the way with Travel Pono Maui, a video series sharing with visitors what they can expect travelling to Maui now.

Today Hawaiian continues to support ongoing relief efforts through its Malama Maui Desk, which was established to more efficiently help people and organizations seeking flight, cargo or other assistance in the aftermath of the wildfires. Hawaiian has received over 200 individual requests from Hawai'i and across its network to transport donated food and various goods to affected residents as well as passengers providing West Maui support services.


Third Quarter 2023 Highlights
Operations


Commenced service of its A330-300F contract freighter business on October 2, 2023
 

Routes and Network


Announced the resumption of service between Tokyo Haneda Airport, Japan and Kona, Hawai'i, starting on October 29, 2023
Began ticket sales on September 6, 2023, for flights on the Boeing 787-9 Dreamliner, which is expected to enter service on select West Coast routes commencing on April 15, 2024
 

Guest Experience


Designed new in-flight amenity kits in partnership with Noho Home , which are focused on sustainability and rooted in aloha, available starting November 6, 2023
 

Environmental, Social and Corporate Governance


Endowed a scholarship for students studying Information Technology at the University of Hawai'i





Table 1.

Hawaiian Holdings, Inc.

Consolidated Statements of Operations (unaudited)




Three Months Ended September 30,


Nine months ended September 30,



2023


2022


% Change


2023


2022


% Change



(in thousands, except per share data)

Operating Revenue:













Passenger


$   664,866


$   663,107


0.3 %


$  1,858,384


$  1,684,599


10.3 %

Other


62,813


78,047


(19.5) %


188,826


225,634


(16.3) %

Total


727,679


741,154


(1.8) %


2,047,210


1,910,233


7.2 %

Operating Expenses:













Wages and benefits


248,899


206,306


20.6 %


728,512


615,091


18.4 %

Aircraft fuel, including taxes and delivery


200,069


225,999


(11.5) %


564,075


603,873


(6.6) %

Maintenance, materials and repairs


65,057


59,317


9.7 %


169,000


170,934


(1.1) %

Aircraft and passenger servicing


46,225


41,044


12.6 %


131,883


110,490


19.4 %

Depreciation and amortization


34,760


34,347


1.2 %


100,775


102,435


(1.6) %

Commissions and other selling


29,695


32,505


(8.6) %


86,324


81,767


5.6 %

Aircraft rent


26,497


25,921


2.2 %


80,827


77,987


3.6 %

Other rentals and landing fees


46,366


38,370


20.8 %


126,574


110,022


15.0 %

Purchased services


36,568


31,269


16.9 %


108,821


95,713


13.7 %

Special items



6,303


(100.0) %



6,303


(100.0) %

Other


48,460


43,145


12.3 %


132,344


112,884


17.2 %

Total


782,596


744,526


5.1 %


2,229,135


2,087,499


6.8 %

Operating Loss


(54,917)


(3,372)


1,528.6 %


(181,925)


(177,266)


2.6 %

Nonoperating Income (Expense):













Interest expense and amortization of debt
discounts and issuance costs


(22,597)


(23,206)




(68,182)


(72,760)



Interest income


13,685


9,287




43,689


20,283



Capitalized interest


2,306


1,061




5,709


3,173



Gains (losses) on fuel derivatives


3,097


(1,063)




(5,627)


(1,063)



Loss on extinguishment of debt







(8,568)



Other components of net periodic benefit
cost


(1,707)


1,252




(4,907)


3,812



Losses on investments, net


(4,054)


(4,028)




(6,906)


(38,519)



Gains on foreign debt


4,311


9,978




18,745


42,295



Other, net


(644)


(688)




(1,408)


(2,318)



Total


(5,603)


(7,407)




(18,887)


(53,665)



Loss Before Income Taxes


(60,520)


(10,779)




(200,812)


(230,931)



Income tax benefit


(11,800)


(1,510)




(41,500)


(41,010)



Net Loss


$    (48,720)


$      (9,269)




$  (159,312)


$  (189,921)



Net Loss Per Share













Basic


$        (0.94)


$        (0.18)




$        (3.09)


$        (3.70)



Diluted


$        (0.94)


$        (0.18)




$        (3.09)


$        (3.70)



Weighted Average Number of Common
Stock Shares Outstanding:













Basic


51,632


51,388




51,576


51,344



Diluted


51,632


51,388




51,576


51,344



Hawaiian Holdings, Inc.

Consolidated Balance Sheet (unaudited)




September 30, 2023
(unaudited)


December 31, 2022



(in thousands, except shares)

ASSETS





Current Assets:





Cash and cash equivalents


$                110,671


$               229,122

Restricted cash


17,250


17,498

Short-term investments


1,023,534


1,147,193

Accounts receivable, net


97,283


113,862

Income taxes receivable


1,660


70,204

Spare parts and supplies, net


53,817


36,875

Prepaid expenses and other


91,754


63,553

Total


1,395,969


1,678,307

Property and equipment, less accumulated depreciation and amortization of
$1,143,934 and $1,135,262 as of September 30, 2023 and December 31, 2022,
respectively


1,969,556


1,874,352

Other Assets:





Assets held-for-sale


2,813


14,019

Operating lease right-of-use assets


423,706


459,128

Long-term prepayments and other


117,716


100,317

Intangible assets, net


13,500


13,500

Total Assets


$             3,923,260


$            4,139,623

LIABILITIES AND SHAREHOLDERS' EQUITY





Current Liabilities:





Accounts payable


$                198,007


$               196,009

Air traffic liability and current frequent flyer deferred revenue


699,085


590,796

Other accrued liabilities


175,992


182,036

Current maturities of long-term debt, less discount


42,364


47,836

Current maturities of finance lease obligations


9,998


25,789

Current maturities of operating leases


85,214


77,858

Total


1,210,660


1,120,324

Long-Term Debt


1,534,877


1,583,889

Other Liabilities and Deferred Credits:





Noncurrent finance lease obligations


62,768


75,221

Noncurrent operating leases


311,647


347,726

Accumulated pension and other post-retirement benefit obligations


143,058


135,775

Other liabilities and deferred credits


71,967


94,654

Noncurrent frequent flyer deferred revenue


320,657


318,369

Deferred tax liability, net


88,868


130,400

Total


998,965


1,102,145

Commitments and Contingencies





Shareholders' Equity:





Special preferred stock, $0.01 par value per share, three shares issued and
outstanding as of September 30, 2023 and December 31, 2022



Common stock, $0.01 par value per share, 51,633,094 and 51,450,904 shares
outstanding as of September 30, 2023 and December 31, 2022, respectively


516


514

Capital in excess of par value


292,335


287,161

Accumulated income (loss)


(18,556)


140,756

Accumulated other comprehensive loss, net


(95,537)


(95,166)

Total


178,758


333,265

Total Liabilities and Shareholders' Equity


$             3,923,260


$            4,139,623

Hawaiian Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)




Nine months ended September 30,



2023


2022



(in thousands)

Net cash provided by (used in) Operating Activities


$                     2,072


$                 (24,050)

Cash flows from Investing Activities:





Additions to property and equipment, including pre-delivery payments


(213,152)


(29,717)

Proceeds from the disposition of aircraft and aircraft related equipment


19,911


10,743

Purchases of investments


(320,628)


(751,509)

Proceeds from sales and maturities of investments


452,913


756,561

Net cash used in investing activities


(60,956)


(13,922)

Cash flows from Financing Activities:





Repayments of long-term debt and finance lease obligations


(58,681)


(173,298)

Debt issuance costs and discounts



(2,236)

Payment for taxes withheld for stock compensation


(1,134)


(1,842)

Net cash used in financing activities


(59,815)


(177,376)

Net decrease in cash and cash equivalents


(118,699)


(215,348)

Cash, cash equivalents, and restricted cash - Beginning of Period


246,620


507,828

Cash, cash equivalents, and restricted cash - End of Period


$                127,921


$                292,480

Table 2.

Hawaiian Holdings, Inc.

Selected Consolidated Statistical Data (unaudited)




Three months ended September 30,


Nine months ended September 30,



2023


2022


% Change


2023


2022


% Change



(in thousands, except as otherwise indicated)

Scheduled Operations:













Revenue passengers flown


2,828


2,738


3.3 %


8,221


7,345


11.9 %

Revenue passenger miles (RPM)


4,450,305


4,113,172


8.2 %


12,641,181


10,950,031


15.4 %

Available seat miles (ASM)


5,166,464


4,957,011


4.2 %


15,095,334


13,704,779


10.1 %

Passenger revenue per RPM (Yield)


       14.94  ¢


       16.12  ¢


(7.3) %


       14.70  ¢


       15.38  ¢


(4.4) %

Passenger load factor (RPM/ASM)


86.1 %


83.0 %


       3.1   pts.


83.7 %


79.9 %


       3.8   pts.

Passenger revenue per ASM (PRASM)


       12.87  ¢


       13.38  ¢


(3.8) %


       12.31  ¢


       12.29  ¢


0.2 %

Total Operations:













Revenue passengers flown


2,828


2,741


3.2 %


8,223


7,361


11.7 %

Revenue passenger miles (RPM)


4,451,484


4,117,551


8.1 %


12,644,415


10,975,703


15.2 %

Available seat miles (ASM)


5,168,883


4,964,785


4.1 %


15,100,831


13,744,129


9.9 %

Operating revenue per ASM (RASM)


       14.08  ¢


       14.93  ¢


(5.7) %


       13.56  ¢


       13.90  ¢


(2.4) %

Operating cost per ASM (CASM)


       15.14  ¢


       15.00  ¢


0.9 %


       14.76  ¢


       15.19  ¢


(2.8) %

CASM excluding aircraft fuel and non-
recurring items (a)


       11.27   ¢


       10.32  ¢


9.2 %


       11.13   ¢


       10.73  ¢


3.7 %

Aircraft fuel expense per ASM (b)


         3.87  ¢


         4.55  ¢


(14.9) %


         3.74  ¢


         4.40  ¢


(15.0) %

Revenue block hours operated


53,183


51,284


3.7 %


158,058


143,646


10.0 %

Gallons of jet fuel consumed


68,521


63,834


7.3 %


199,735


174,744


14.3 %

Average cost per gallon of jet fuel (actual) (b)


$2.92


$3.54


(17.5) %


$2.82


$3.46


(18.5) %



(a)

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

(b)

Includes applicable taxes and fees.

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