Achieves Best Performance Since 1986 Despite Difficult Fourth Quarter
HONOLULU, March 5, 1997 -- Hawaiian Airlines, Inc. (ASE and PSE: HA) today reported financial results for the fourth quarter and year ended December 31, 1996.
Hawaiian reported operating revenues of $384.5 million for the year, up 11 percent from the $346.9 million reported for 1995. Operating profit for the year was $2.0 million, reversing an operating loss of $1.9 million in 1995. The Company reported a net loss for 1996 of $1.5 million, or $0.05 per share, including $766,000 of extraordinary gains from the early retirement of debt, compared to a net loss of $5.5 million, or $0.59 per share, for the prior year. Operating profit for the year, achieved despite difficult market conditions in the fourth quarter, represents Hawaiian's first annual profit from operations since 1986.
Operating revenues for the fourth quarter totaled $93.2 million versus $92.6 million for the same period in 1995. The Company reported a 1996 fourth quarter operating loss of $6.1 million and a net loss of $3.9 million or $0.10 per share, versus an operating profit of $659,000 and a net loss of $124,000 or $0.01 per share, a year ago.
Performance in the fourth quarter of 1996 ended a string of six consecutive quarters of operating profitability, as a 4.8 percent decrease in westbound visitors to Hawaii and a 27.3 percent rise in the company's average fuel cost per gallon combined to cause the operating loss. The quarter also included higher than expected engine maintenance expense for Hawaiian's interisland fleet. Decreased demand for travel to Hawaii during the fourth quarter, caused in part by aggressive competition for travel dollars in other markets, has continued into the first quarter of 1997. Hawaii Visitors and Convention Bureau (HVCB) preliminary statistics for the month of January 1997 reflect a 2.6 percent decrease in westbound visitor arrivals from the previous January.
Bruce R. Nobles, Hawaiian's president and chief executive officer, said, "While conditions have improved somewhat in the first quarter, continuing softness in travel demand and high fuel prices are expected to also impact first quarter 1997 results. However, the impact of these market factors on the fourth quarter should not overshadow what Hawaiian accomplished in 1996. The Company's turnaround is evident in our return to operating profitability for the year and an operational and financial restructuring has given this airline a strong balance sheet. Our addition later this year of state-of-the-art information systems technology will further enhance the company's revenue management capabilities. Hawaiian is very well positioned to reach its growth objectives going forward."
As reported on February 27, Nobles has announced his resignation from Hawaiian Airlines effective March 31, 1997. Paul J. Casey, a career airline executive based in Hawaii, will succeed him.
Hawaiian continued to strengthen its market position in each of its key markets throughout 1996. Based on the company's preliminary enplanement figures, Hawaiian increased its share of the Hawaii interisland market by an estimated one percentage point, while the total market increased 0.6 percent. The figures also show Hawaiian improved its share in the West Coast-Hawaii market, garnering a 15.9 percent increase in passengers carried for an estimated 22 percent share of passengers traveling between the West Coast and Hawaii. HVCB figures show that visitor arrivals from the West Coast / Pacific region increased only 0.9 percent for the year.
Hawaiian carried 5.1 million revenue passengers in 1996, an increase of 4.6 percent from 4.9 million in 1995. Systemwide revenue passenger miles (RPMs) increased 6.8 percent to 3.8 billion compared to the prior year and total available seat miles (ASMs) increased 9.7 percent over 1995. Average systemwide load factor decreased 2.1 percentage points for the year, to 74.9%.
Hawaiian Airlines, Hawaii's first and largest airline, provides scheduled and charter air transportation of passengers, cargo and mail among the islands of Hawaii and between Hawaii and six West Coast gateway cities and two destinations in the South Pacific. The carrier was recently rated for the sixth consecutive year among the top 10 U.S. airlines by readers of Conde Nast Traveler magazine and among the top five by readers of Travel & Leisure magazine.