HONOLULU –- Hawaiian Airlines, Inc., today announced its audited financial results for the fiscal year ending December 31, 2004, reporting an operating profit of $71.1 million on revenue of $764.0 million. By comparison, Hawaiian reported an operating profit of $77.5 million on revenue of $697.7 million for 2003.
Hawaiian Airlines Trustee Joshua Gotbaum said, “With rising fuel costs and increasing competition, 2004 was a very tough year for airlines. Nonetheless, the people of Hawaiian Airlines performed magnificently, setting new standards for service, reliability, and financial performance. That same performance will be necessary in the tough times ahead.”
Gotbaum added that the brunt of rising fuel costs and increased competition were felt more heavily as the year wore on, and are continuing into 2005. He noted that more than 95 percent of Hawaiian's operating profit for 2004 was realized in the first eight months of the year.
Hawaiian's overall operating expenses for 2004 increased by 11.7 percent to $692.9 million, with fuel costs skyrocketing by 40.1 percent to $135.9 million compared to 2003. Labor costs increased by 5.5 percent to $227.3 million for the year.
Along with operating expenses, Hawaiian also recognized $129.5 million in reorganization expenses for 2004. These primarily consisted of $110.6 million in one-time non-cash claims to settle leases with Boeing Capital Corporation for three Boeing 767-300 and 11 Boeing 717-200 aircraft, and with Ansett for a B767-300 rejected by Hawaiian in 2003.
Under generally accepted accounting principles, reorganization-related expenses are reported as a non-operating expense. The aircraft lease settlements converted ongoing cash obligations into unsecured claims.
Taking into account reorganization-related expenses and an income tax provision of $16.8 million, Hawaiian recorded a net loss of $75.4 million in 2004. This compares with a net loss of $49.5 million for 2003.
The complete financial report for 2004 will be available online at HawaiianAirlines.com.
Becoming A National Leader
For Hawaiian Airlines, 2004 was a year in which Hawaii's largest and longest-serving carrier became recognized as one of the nation's best. Hawaiian maintained profitability, improved service, and led the nation in performance and reliability.
Based on reports issued by the U.S. Department of Transportation, Hawaiian led America's airlines in service for 2004, finishing #1 for punctuality, #2 for both baggage handling and boarding reliability, and in the top five for fewest consumer complaints.
Moreover, Hawaiian was the nation's best airline at attracting customers, leading all carriers with a systemwide load factor of 85.7 percent (source: Aviation Daily).
Hawaiian continued to innovate to make travel more enjoyable and hassle-free for customers in 2004. It became the world's first carrier to introduce a mobile skycap service, BaggageDirect, so that travelers are no longer forced to lug their bags to the airport and through security. Hawaiian was the first transpacific carrier to introduce digEplayer, a laptop personal entertainment system. Hawaiian also reorganized its airport operations, improved its Web Check-In, and added significantly more Self-Check-In Hele On machines to ticket lobbies throughout its route system, thereby speeding up lines and, in some cases, eliminating them entirely.
Mark Dunkerley, Hawaiian's president and chief operating officer, said, “Our good operational performance in 2004 leaves us well-placed to distinguish our service from that of our competitors in a market of increasing competitive intensity. As always, there remains further room for improvement and we shall not lose sight of the need to innovate.”
About Hawaiian Airlines
Hawaiian Airlines, the nation's number one on-time carrier, is recognized as one of the best airlines in America. Readers of two prominent national travel magazines, Condé Nast Traveler and Travel + Leisure, have both rated Hawaiian as the top domestic airline serving Hawaii in their most recent rankings, and the fifth best domestic airline overall.
Celebrating its 76th year of continuous service, Hawaiian is Hawaii's biggest and longest-serving airline, and the second largest provider of passenger air service between Hawaii and the U.S. mainland. Hawaiian offers nonstop service to Hawaii from more U.S. gateway cities than any other airline. Hawaiian also provides approximately 100 daily jet flights among the Hawaiian Islands, as well as service to Australia, American Samoa and Tahiti.
Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (AMEX and PCX: HA). Since the appointment of a bankruptcy trustee in May 2003, Hawaiian Holdings has had no responsibility for the management of Hawaiian Airlines and has had limited access to information concerning the airline. Additional information is available at www.HawaiianAir.com.