HONOLULU, May 3, 2000 -- Hawaiian Airlines, Inc. (AMEX and PCX: HA) today announced financial results for the first quarter ended March 31, 2000. The Company reported an operating loss of $4.5 million, compared to an operating profit of $1.1 million for the same period in 1999, and a net loss of $2.6 million, or $0.06 per common share, compared to a 1999 first quarter net loss of $169,000, or $0.01 per common share.
Total operating revenues in the 2000 first quarter increased by 24.0 percent to $136.0 million, as compared to $109.6 million in the first quarter of 1999. Total operating expenses increased by 29.4 percent to $140.5 million, as compared to $108.5 million in the year-earlier period.
Paul J. Casey, Hawaiian Airlines president and chief executive officer, said, "Our growth strategy, supported by aggressive marketing programs and successful pricing strategies, is clearly producing positive results. Considering the fact that the ‘Y2K' phenomenon continued to have a diminishing effect on traffic in January, we are pleased with the company's strong revenue performance. However, we are disappointed with the operating loss for the quarter and the dramatic impact fuel price continued to have on our results. Excluding the impact of fuel, our first quarter operating expenses increased 18.6 percent, which is consistent with our rate of growth."
Hawaii tourism saw a significant rebound in February and March, recording a 5 percent increase in total visitor count for March and a 2 percent increase for the first quarter as a whole over 1999 levels, according to Hawaii Visitor and Convention Bureau statistics. Hawaiian Airlines experienced strong quarterly growth system-wide in number of passengers carried and revenue passenger miles.
“In the months to come, we anticipate additional year-over-year revenue growth with the doubling of our service between San Francisco and Honolulu to twice daily starting June 1, 2000. We also expect that the recent doubling of our non-stop service between Honolulu and Tahiti to twice weekly, and the company's charter contract with Renaissance Cruises for nonstop flights between Los Angeles and Tahiti will contribute additional revenue as well. We are very encouraged by the strong pace of advance bookings for the second and third quarters," Casey said.
Total revenue per available seat mile (RASM) in the first quarter of 2000 increased 4.5 percent to 7.9+, reflecting the company's continuing focus on generating revenue through a balanced management of available capacity and tactical pricing initiatives. Passenger revenues increased 15.4 percent and scheduled operations yield increased 5.9 percent from the first quarter of 1999, due primarily to improved fares in all principal markets. The first quarter of 2000 also reflected the first full quarter of charter revenues from the Renaissance Cruises contract, with charter revenue increasing by nearly $10 million over the first quarter of 1999.
Revenue passenger miles (RPMs) for system-wide operations increased to 1.3 billion RPMs, a 17.1 percent increase over 1999 first quarter levels. Total available seat miles (ASMs) rose 18.7 percent during the quarter to 1.7 billion ASMs. Average system-wide load factor in the first quarter of 2000 decreased 1.0 percentage point to 74.0 percent, as compared to 75.0 percent last year.
Total cost per available seat mile (CASM) increased from 7.5+ in the first quarter of 1999 to 8.1+ in the first quarter of 2000. Increases in operating costs were led by a $14.3 million, or 103.7 percent, rise in fuel cost – the result of a 21.4 percent increase in fuel consumption combined with a 68.4 percent increase in fuel price per gallon during the first quarter. After peaking in March 2000 at 89.6+ per gallon, the cost of fuel per gallon, including taxes and net of hedging, has trended down for the months of April and May 2000, consistent with the jet fuel market.
Consistent with the company's continued growth, other contributors included a $5.9 million, or 18 percent, increase in wages and benefits; a $4.5 million, or 19.1 percent, rise in the cost of maintenance materials and repairs for an expanded fleet of DC-10 aircraft; and a $1.5 million, or 20.3 percent, increase in rentals and landing fees, as a result of the September 1, 1999 reinstatement of State of Hawaii landing fees at Hawaii airports.
The company reported cash and cash equivalents of $82.0 million at March 31, 2000, compared to $63.6 million at December 31, 1999 and $35.7 million at March 31, 1999. Commensurate with the increase in cash and cash equivalents, the company also reported an improvement in the mix of advance bookings, as measured by its air traffic liability, which increased approximately 52 percent at the end of the first quarter of 2000 over year end 1999 levels.
Casey noted that the success of the company's marketing strategies, including new routes, E-Ticket offerings, Internet distribution and technology investments are contributing to the overwhelming growth in demand for the Hawaiian Airlines product.
During the first quarter of 2000, Hawaiian Airlines continued to strengthen its organization, products and services in order to enhance top-line growth:
- On March 2, 2000 Hawaiian Airlines announced that its Board of Directors had approved a definitive agreement with The Boeing Company under which Hawaiian will acquire 13 new Boeing 717-200 aircraft, with rights to purchase seven additional aircraft. The agreement formalized a September 1999 letter of intent and calls for first delivery in February 2001.
- On March 21, 2000 the company announced a Board-approved stock repurchase program authorizing the company to buy up to 5 million shares of its Common Stock from time to time on the open market and in private transactions.
- On February 1, 2000, the company began an enhanced onboard meal service program incorporating the talents of seven highly acclaimed Hawaii chef-restaurateurs to further distinguish Hawaiian's award-winning First Class service.
- On January 12, 2000, Blaine J. Miyasato was promoted to the new position of Vice President - Customer Services to streamline and better align the day to day activities of system-wide airport customer support services with the company's award-winning in-flight services.
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 has earned international awards for its onboard service in First Class and Coach, and has been rated one of the “Top 10 U.S. Airlines” by the readers of Conde Nast magazine for the past eight consecutive years. Additional information about Hawaiian Airlines, including previously issued company news releases, may be accessed on the Internet at www.hawaiianair.com.
Except for historical information contained herein, the matters discussed in this news release contain forward-looking statements that involve risks and uncertainties. The company's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, the effect of changing economic conditions, trends in the airline industry, the ability to control costs and expenses, and other risks detailed in the company's continuing reports filed with the Securities and Exchange Commission.
To view a PDF of condensed balance sheets, click here.