The first quarter of 2001 included a $3.6 million favorable adjustment to a previously recorded DC-9 fleet restructuring charge. Excluding this favorable adjustment, the company would have reported an operating loss of $2.9 million and a net loss of $3.2 million or a loss of $0.10 per common share in the first quarter of 2001.
Despite a reduction of seven percent in scheduled capacity as measured by Available Seat Miles (ASMs) in the first quarter of 2002, compared with the same period last year, passenger traffic as measured by Revenue Passenger Miles (RPMs) remained at last year's levels, resulting in an improvement in scheduled passenger load factor of 5.7 points to 78.4 percent. As a result, scheduled passenger revenues for the quarter were essentially flat year-over-year at $113.0 million compared to $113.8 million in the year-earlier period. Total revenues for the quarter declined $9.9 million to $138.1 million, due principally to an $8.8 million decline in charter revenues associated with charter client Renaissance Cruises' ceasing operations in September of 2001.
Operating expenses increased 6.4 percent to $156.8 million, driven mainly by a $8.2 million or 18.8 percent increase in wages and benefits, and $3.3 million in one-time costs related to the proposed merger transaction that was abandoned by the parties late in the first quarter. The increase in wages and benefits primarily reflects the first full quarter of operations under new labor contracts that became effective during 2001, as well as crew training and other costs associated with the introduction of new Boeing 767-300ER aircraft.
Paul J. Casey, vice chairman, chief executive officer and president, said, “As expected, we saw the continued effects of 9/11 in our operations with the loss of substantial charter revenues associated with the shut-down of Renaissance Cruises last year. However, our core business showed continued resiliency with scheduled passenger revenues holding steady despite a reduction in capacity.
“We are further encouraged by the pace of bookings for summer, including those in our new Sacramento and Ontario markets, and by the positive early response to our new Phoenix service, which starts in October,” he said.
Aircraft rentals increased by $11.5 million in the first quarter of 2002, reflecting the company's complete replacement of its narrowbody fleet of aging DC-9 aircraft with new Boeing 717-200 aircraft and the beginning of its replacement of its widebody fleet of DC-10 aircraft with new Boeing 767-300ER aircraft. This increase was more than offset by corresponding decreases in aircraft maintenance and fuel expense, primarily as a result of operational efficiencies generated by the company's new fleet. Maintenance expense decreased by $4.0 million or 15.8 percent and fuel expense, after giving effect to $2.9 million in fuel hedging losses during the quarter, decreased by $ 9.6 million or 31.6 percent.
The company reported unrestricted cash and cash equivalents of $93.6 million at March 31, 2002, compared to $102.9 million at December 31, 2001 and $85.2 million at March 31, 2001.
Hawaii tourism, as expressed by total visitor arrivals, declined 11.0 percent during the first quarter of 2002 compared to 2001 levels, according to Hawaii State Department of Business, Economic Development and Tourism (DBEDT) statistics. Hawaiian Airlines experienced a 4.4 percent decrease year-over-year in scheduled passengers carried during the first quarter against a 7.2 percent decline in scheduled capacity (ASMs).
The following events occurred during the first quarter of 2002:
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 seven 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, has been consistently rated one of the “Top 10 U.S. Airlines” by readers of Conde Nast Traveler and Travel & Leisure for the past several consecutive years and was named the top U.S. carrier for “Premium” class service in the 2001 Zagat Survey. 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.
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