HONOLULU, November 6, 1997 -- Hawaiian Airlines, Inc. (ASE and PSE: HA) today announced its results for the third quarter and nine months ended September 30, 1997. The Company reported third quarter 1997 net income of $1.4 million, or $0.03 per share, compared to net income, before an extraordinary gain, of $1.4 million, or $0.04 per share, in the third quarter of 1996. Operating income for the three months increased 14% to $5.3 million, or 5.0% of revenues, in 1997 from $4.6 million, or 4.5% of revenues, in 1996.
The third quarter 1997 results represent the second consecutive quarter of net profits and reflect year-over-year gains in several key performance measures, including operating revenues, revenue passenger miles flown and average load factor. For the period, scheduled passenger revenues increased to $88.8 million in 1997 compared to $86.3 million in 1996. The increase was due to additional Transpacific passenger revenues, reflecting more aggressive pricing actions by the Company to stimulate travel demand. The Transpacific increase was achieved despite continued softness in the visitor market throughout the State of Hawaii. Overseas charter revenues rose 11% to $8.1 million for the third quarter from $7.3 million a year ago.
For the nine months ended September 30, 1997, the Company reported net income of $245,000, or $0.01 per share, compared to $2.0 million, or $0.07 per share, before an extraordinary gain, during the same period in 1996. Operating income for the first nine months of 1997 was $2.7 million, compared to $8.1 million in 1996. Scheduled passenger revenues totaled $254.3 million in the first nine months of 1997 compared to $247.6 million for the same period in 1996. Overseas charter revenues increased 36% to $28.7 million in the first nine months of 1997 from $21.2 million in the year ago 1996 period.
In the third quarter of 1997, Revenue and Cost per Available Seat Mile levels rose to 7.74+ and 7.35+, respectively, and compared favorably to the 7.73+ and 7.39+ reported in the third quarter of 1996. Third quarter 1997 Revenue per Available Seat Mile and Cost per Available Seat Mile levels show significant improvement from earlier 1997 quarterly periods as a result of greater passenger revenues and lower fuel costs.
Paul J. Casey, President and Chief Executive Officer, said, "This quarter we continued to focus on improving our profitability. We initiated marketing strategies aimed at boosting profit margins in our Transpacific and Interisland operations, an effort advanced by the recent implementation of our automated yield management system. Accordingly, we expect to begin seeing revenue and operating enhancements in future quarters."
Excluding the non-cash amortization of excess reorganization value (ERV), an intangible asset resulting from the Company's financial restructuring in 1994, earnings per share would have been $.09 for the third quarter of 1997 and $.10 year-to-date versus the reported amounts of $.03 and $.01.
Casey continued, "Looking forward, we are encouraged by the recommendations of the State of Hawaii's Economic Revitalization Task Force to stimulate tourism and improve the overall business environment in Hawaii. Building on the success of our established code share agreement with Northwest Airlines, we also expect to begin realizing long-term benefits in 1998 from the code sharing and marketing alliance agreements signed earlier this year with American Airlines and Continental Airlines."
Hawaiian Airlines, Hawaii's first and largest airline, provides scheduled and chartered air transportation of passengers, cargo and mail, serving the Hawaiian islands, six West Coast gateway cities and two destinations in the South Pacific. The carrier was recently awarded the prestigious President's Award for innovation in coach class service by the International In-Flight Food Service Association, and has been rated one of the "Top 10 U.S. Airlines" by the readers of Conde Nast Traveler magazine for the past six consecutive years.