Hawaiian reports 2023 fourth quarter and full year financial results showing losses of more than $100 million.

Hawaiian Holdings, the parent company of Hawaiian Airlines, has this week reported its financial results for the fourth quarter and full year 2023.

"I am grateful to our team who accomplished an extraordinary amount, including realizing foundational investments during a challenging year," said Hawaiian Airlines President and CEO Peter Ingram .  "Demand is solid across our networks, our brand remains strong in Japan as the market recovers, and we have seen steady improvement in travel to Maui.  We expect the combination with Alaska will create an even more competitive combined airline, positioning the Hawaiian Airlines brand to flourish in the years ahead."

As of December 31, 2023, the Company had:

Unrestricted cash, cash equivalents and short-term investments of $908.5 million

Outstanding debt and finance lease obligations of $1.7 billion

Liquidity of $1.1 billion , including an undrawn revolving credit facility of $235 million

Revenue Environment

Following the Maui wildfires, Hawaiian saw a steady recovery of travel from North America to Maui.  Non-Maui routes and international markets ex- Japan continued to perform and demand remained solid.  In international markets, strong U.S. and other point-of sale demand, coupled with an increase in Japan -originating traffic, contributed to a 20.7% point increase in International passenger load factor year-over-year.  Premium products continued to demonstrate strong performance for the fourth quarter and full year 2023.

The Company's overall operating revenue for the fourth quarter 2023 was down 8.5% compared to the fourth quarter of 2022 on 3.3% higher capacity.  In addition to the impact from the Maui wildfires, pandemic-related spoilage and revenue from pent-up travel demand in 2022 drove the year-over-year decline.  The Company's overall operating revenue for 2023 was up 2.8% from 2022 on 8.1% higher capacity.

Other Revenue for fourth quarter 2023 was down 15.9% compared to the same period in 2022, primarily driven by a decrease in cargo revenue.  Cargo activity in 2022 was higher than normal due to lingering pandemic-related effects.  Full year 2023 Other Revenue was down 16.2% compared to 2022, driven by decreases in cargo revenue and contract services.

Fourth Quarter and Full Year 2023 Highlights

Routes and scheduled services

Operated 108% of its 2022 capacity: 96%, 112%, and 172% capacity on its North America , Neighbor Island, and International routes, respectively

Launched ticket sales for new daily nonstop service between Salt Lake City and Honolulu , which will commence on May 15, 2024

Announced expansion of service in Sacramento with four weekly flights to Līhuʻe, Kauaʻi starting May 24, 2024 and three weekly flights to Kona on the Island of Hawaiʻi starting May 25, 2024

 

Awards and Recognition

Ranked highest for economy travel customer satisfaction in Consumer Reports ' 2023 Airline Travel Buying Guide

Named the best domestic airline in Travel + Leisure's 2023 "World's Best Awards" annual reader survey

Rated as one of the top airlines in the U.S. by Condé Nast Traveler readers for the 2023 Readers' Choice Awards

Awarded best new business class in 2023 by TheDesignAir for its new business class product, the Leihōkū Suites

 

Guest experience

Received FAA approval of the Starlink system on the Airbus A321neo, which is currently being installed on that fleet. Hawaiian will be the first major airline to put this technology on-board, and it is expected to be the fastest, most capable inflight connectivity available worldwide, offered free to every guest

Collaborated with Hawaiʻi lifestyle brand Noho Home to design Hawaiian's new in-flight amenity kits and soft goods with a focus on sustainability and rooted in aloha. Amenities are made with responsibly sourced materials and offered to Business Class guests on long-haul flights a la carte to minimize waste

 

Environmental, Social and Corporate Governance

In May 2023 , the Company published its 2023 Corporate Kuleana (Responsibility) Report, providing progress on Environmental, Social and Governance (ESG) priorities, which included a decarbonization roadmap with interim targets to lower greenhouse gas emissions focused on replacing petroleum jet fuel with sustainable aviation fuel (SAF); plans to decrease life-cycle jet fuel emissions per revenue ton mile by 45% by 2035; and efforts to replace 10% of conventional jet fuel with SAF by 2030.  The report also highlights Hawaiian's employee diversity, including the highest percentage of women pilots of any major U.S. airline.

Other activities in 2023 include the following:

Engaged over 1,500 volunteers who donated over 8,500 hours of community service work for more than 200 organizations throughout Hawaiʻi and other markets we serve

Donated $109,500 through the Hawaiian Airlines Foundation as a grant to Kāko'o 'Ōiwi, a nonprofit organization dedicated to advancing the cultural, spiritual and traditional practices of the Native Hawaiian community. The grant funded the construction of a produce washing and packing facility to serve small, family farms in the area

Brought the Holoholo Challenge virtual race series to Kauaʻi which raised almost $25,000 in proceeds benefiting the National Tropical Botanical Garden's McBryde Garden , a 259-acre conservation and research area that is home to the world's largest collection of native Hawaiian flora

Provided wide-ranging support for the Maui Community , including direct gifts of $50,000 each to the Hawaiʻi Foodbank, Maui Food Bank, and Hawaiʻi Community Foundation's Maui Strong Fund, and a donor-matching HawaiianMiles campaign for the American Red Cross Hawaiʻi totaling approximately 140 million HawaiianMiles. Additionally, Hawaiian assisted with the evacuation of displaced residents and visitors and the transportation of first responders to Maui , and also supported relief efforts by carrying over 193,000 lbs. of essential cargo

The Company continues to focus on creating long-term value and positively impacting the people, environment and communities it serves. The Company will publish its fifth annual Corporate Kuleana Report in the spring of 2024.

Merger Agreement

On December 3, 2023 , Alaska Air Group, Inc. and the Company announced that they have entered into a definitive agreement under which Alaska Airlines will acquire Hawaiian for $18.00 per share in cash, for a transaction value of approximately $1.9 billion , inclusive of $0.9 billion of Hawaiian's net debt.  The combined company will unlock more destinations for consumers and expand choice of critical air service options and access throughout the Pacific region, Continental United States and globally.  The acquisition is conditioned on required regulatory approvals, approval by the Company's shareholders, and other customary closing conditions.  It is expected to close in 12-18 months from the announcement date.

Fourth Quarter 2023 - Key Financial Metrics and Results
		GAAP		YoY Change		Adjusted (a)		YoY Change
Net Loss		($101.2M)		($51.0M)		($122.7M)		($98.0M)
Diluted EPS		($1.96)		($0.98)		($2.37)		($1.88)
Pre-tax Margin		(19.0) %		(10.4) pts.		(22.9) %		(18.6) pts.
EBITDA		($71.8M)		($65.7M)		($98.1M)		($123.7M)
Operating Cost per ASM		15.30¢		(0.16)¢		11.77¢		0.88¢
Full Year 2023 - Key Financial Metrics and Results
		GAAP		YoY Change		Adjusted (a)		YoY Change
Net Loss		($260.5M)		($20.4M)		($313.5M)		($103.1M)
Diluted EPS		($5.05)		($0.38)		($6.08)		($2.00)
Pre-tax Margin		(12.1) %		(1.0) pts.		(14.5) %		(4.5) pts.
EBITDA		($103.6M)		($41.8M)		($169.0M)		($138.0M)
Operating Cost per ASM		14.90¢		(0.36)¢		11.29¢		0.51¢

(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.

Hawaiian Holdings, Inc.
Consolidated Statements of Operations
(in thousands, except for per share data) (unaudited)
		Three Months Ended December 31,						Twelve Months Ended December 31,
		2023		2022		% Change		2023		2022		% Change
		(in thousands, except per share data)
Operating Revenue:
Passenger		$   601,621		$   650,841		(7.6) %		$  2,460,005		$  2,335,440		5.3 %
Other		67,453		80,194		(15.9) %		256,279		305,827		(16.2) %
Total		669,074		731,035		(8.5) %		2,716,284		2,641,267		2.8 %
Operating Expenses:
Wages and benefits		223,012		218,045		2.3 %		951,524		833,137		14.2 %
Aircraft fuel, including taxes and delivery		202,059		213,204		(5.2) %		766,133		817,077		(6.2) %
Aircraft rent		28,914		25,859		11.8 %		109,741		103,846		5.7 %
Maintenance materials and repairs		75,296		65,219		15.5 %		244,296		236,153		3.4 %
Aircraft and passenger servicing		44,815		42,060		6.6 %		176,698		152,550		15.8 %
Commissions and other selling		30,808		32,076		(4.0) %		117,132		113,843		2.9 %
Depreciation and amortization		32,840		33,735		(2.7) %		133,615		136,169		(1.9) %
Other rentals and landing fees		44,797		37,122		20.7 %		171,371		147,143		16.5 %
Purchased services		36,001		33,637		7.0 %		144,822		129,350		12.0 %
Special items		10,561		12,500		(15.5) %		10,561		18,803		(43.8) %
Other		51,721		50,365		2.7 %		184,066		163,250		12.8 %
Total		780,824		763,822		2.2 %		3,009,959		2,851,321		5.6 %
Operating Loss		(111,750)		(32,787)		240.8 %		(293,675)		(210,054)		39.8 %
Nonoperating Income (Expense):
Interest expense and amortization of debt discounts and issuance costs		(22,358)		(23,054)				(90,540)		(95,815)
Interest income		13,543		11,858				57,231		32,141
Capitalized interest		3,123		1,070				8,833		4,244
Other components of net periodic benefit cost		(1,707)		1,252				(6,614)		5,065
Losses on fuel derivatives		(6,992)		(1,978)				(12,619)		(3,041)
Loss on extinguishment of debt		—		—				—		(8,568)
Gains (losses) on investments, net		6,304		(4,563)				(602)		(43,082)
Gains (losses) on foreign debt		(7,245)		(15,629)				11,500		26,667
Other, net		100		913				(1,308)		(1,406)
Total		(15,232)		(30,131)				(34,119)		(83,795)
Loss Before Income Taxes		(126,982)		(62,918)				(327,794)		(293,849)
Income tax benefit		(25,800)		(12,758)				(67,300)		(53,768)
Net Loss		$ (101,182)		$    (50,160)				$ (260,494)		$ (240,081)
Net Loss Per Common Stock Share:
Basic		$        (1.96)		$        (0.98)				$        (5.05)		$        (4.67)
Diluted		$        (1.96)		$        (0.98)				$        (5.05)		$        (4.67)
Weighted Average Number of Common Stock Shares Outstanding:
Basic		51,655		51,413				51,596		51,361
Diluted		51,655		51,413				51,596		51,361

 

Table 2.
Hawaiian Holdings, Inc.
Selected Statistical Data
(in thousands, except as otherwise indicated) (unaudited)
		Three Months Ended December 31,						Twelve Months Ended December 31,
		2023		2022		% Change		2023		2022		% Change
		(in thousands, except as otherwise indicated)
Scheduled Operations:
Revenue passengers flown		2,655		2,651		0.2 %		10,876		9,995		8.8 %
Revenue passenger miles (RPM)		4,219,482		3,982,719		5.9 %		16,860,663		14,932,750		12.9 %
Available seat miles (ASM)		5,100,896		4,931,687		3.4 %		20,196,230		18,636,466		8.4 %
Passenger revenue per RPM (Yield)		14.26  ¢		16.34  ¢		(12.7) %		14.59  ¢		15.64  ¢		(6.7) %
Passenger load factor (RPM/ASM)		82.7 %		80.8 %		1.9     pt.		83.5 %		80.1 %		3.4     pt.
Passenger revenue per ASM (PRASM)		11.79   ¢		13.20  ¢		(10.7) %		12.18  ¢		12.53  ¢		(2.8) %
Total Operations:
Revenue passengers flown		2,656		2,655		— %		10,879		10,015		8.6 %
RPM		4,220,584		3,988,798		5.8 %		16,864,998		14,964,500		12.7 %
ASM		5,103,666		4,940,514		3.3 %		20,204,497		18,684,642		8.1 %
Passenger load factor (RPM/ASM)		82.7 %		80.7 %		2.0     pt.		83.5 %		80.1 %		3.4     pt.
Operating revenue per ASM (RASM)		13.11   ¢		14.80  ¢		(11.4) %		13.44  ¢		14.14  ¢		(5.0) %
Operating cost per ASM (CASM)		15.30  ¢		15.46  ¢		(1.0) %		14.90  ¢		15.26  ¢		(2.4) %
CASM excluding aircraft fuel and non-recurring items (a)		11.77   ¢		10.89  ¢		8.1 %		11.29   ¢		10.78  ¢		4.7 %
Aircraft fuel expense per ASM (b)		3.96  ¢		4.32  ¢		(8.3) %		3.79  ¢		4.37  ¢		(13.3) %
Revenue block hours operated		52,961		51,715		2.4 %		211,019		195,361		8.0 %
Gallons of jet fuel consumed		68,756		64,485		6.6 %		268,491		239,231		12.2 %
Average cost per gallon of jet fuel (actual) (b)		$       2.94		$       3.31		(11.2) %		$            2.85		$          3.42		(16.7) %
Economic fuel cost per gallon (b)(c)		$       2.98		$       3.31		(10.0) %		$            2.89		$          3.42		(15.5) %