HONOLULU, March 2, 2000 -- Hawaiian Airlines, Inc. (AMEX and PCX: HA) and The Boeing Company (NYSE: BA) announced today that they have executed a purchase agreement under which Hawaiian Airlines will acquire 13 new Boeing 717-200 aircraft, with rights to purchase seven additional aircraft, formalizing a letter of intent signed by the two parties in September 1999. The new aircraft will completely replace Hawaiian's current short-haul fleet of 15 McDonnell Douglas DC-9-50 aircraft used on the company's interisland routes within Hawaii. All of the new aircraft will be delivered to Hawaiian in 2001, the first in February.
The firm order for 13 aircraft is valued at approximately $430 million at Boeing's list price for the 717. Hawaiian has secured financing through Boeing for the initial acquisition of 13 aircraft. The signed agreement provides for monthly deliveries of the 717 to Hawaiian beginning in February 2001, with two units delivered in June and September 2001.
John W. Adams, chairman of the board of Hawaiian Airlines, called the agreement signing historic and a reflection of the company's commitment to the Hawaii market.
"This unprecedented investment in the future of interisland travel and commerce in Hawaii underscores Hawaiian's 70-year commitment to serving the people of its home state,” Adams said.
Paul J. Casey, president and chief executive officer of Hawaiian Airlines, said the agreement ensures that Hawaii's residents and tourism industry will gain all the benefits of having the newest, most advanced short-haul commercial passenger jets in the world.
“The 717 will become the standard by which all interisland travel will be measured. It is quieter, more comfortable and more reliable than any other aircraft in its class. It's also the most environmentally friendly, with far lower emissions than any comparable aircraft. It will become the preferred way to fly in Hawaii,” Casey said.
Twin BMW Rolls-Royce BR715 engines make the 717 quieter on the outside and inside than other planes in its class. The 717-200 not only meets federal Stage 3 noise requirements, it meets proposed Stage 4 criteria expected to be required in future years. The 717-200's noise levels for takeoff and approach are rated significantly lower than any other interisland jet aircraft in operation. In addition, the 717's BR715 engines generate emissions that are 60 percent below federal standards.
First introduced in 1995 as the MD-95, the Boeing 717 is McDonnell Douglas' successor to the DC-9 series. Though similar in size and shape to the DC-9-50, the 717-200 features some of the same “next-generation” technology used in Boeing's state-of-the-art 777 aircraft, from its “glass cockpit” flight deck to its advanced aerodynamics that contribute to greater fuel efficiency.
Hawaiian's 717s will seat eight passengers in First Class and 115 in Coach.
“The 717 is the perfect airplane for the quick turn-around, high-frequency short haul market,” said Doug Groseclose, Boeing Commercial Airplanes Group vice president – South Asia/Pacific, Africa and Middle East Sales. “We are excited about the value that this newest member of the Boeing family will bring to Hawaiian Airlines and the people of Hawaii.”
Casey added, “Over the past six months, Boeing, BMW Rolls Royce and Hawaiian have worked closely together in planning a smooth introduction of the 717 in Hawaii next year, from spare parts provisioning to engine maintenance to pilot training. The effort that has gone into this introduction is an example of our commitment to take interisland air transportation to a new level of customer satisfaction.”
As a result of the acquisition of the Boeing 717 fleet and the corresponding acceleration of the retirement of its DC-9-50 fleet, Hawaiian will record a pre-tax fleet disposition charge in the fourth quarter of 1999 of approximately $47 million. This non-cash charge represents the write-down of DC-9-50 aircraft and certain related assets to their estimated fair market value.
Founded in 1929 as Inter-Island Airways, Hawaiian Airlines launched the first commercial airline service in Hawaii on November 11, 1929. The company also introduced the first jets in interisland Hawaii service more than 30 years ago.
From its Honolulu hub, Hawaiian serves the Islands of Maui, Kauai, Lanai, Molokai and the Big Island of Hawaii. The nation's 12th largest carrier, Hawaiian also operates a fleet of 13 McDonnell Douglas DC-10 widebody aircraft on 14 flights a day between Hawaii and the U.S. mainland. Its DC-10 South Pacific service links Honolulu with American Samoa and Tahiti.
Hawaiian Airlines has earned numerous international awards for service in recent years and most recently was rated third in Travel & Leisure magazine's 1999 ranking of the Top 10 Domestic Airlines.
The world's largest producer of commercial jetliners, Boeing Commercial Airplanes Group maintains its leadership with intense focus on customers and their requirement for products and services that deliver the highest value. Only Boeing offers 23 airplane models to serve every passenger market from 100 seats to nearly 600 seats, as well as the most complete line of cargo freighters.
Additional information on Hawaiian Airlines, including previously issued company news releases, is available via the airline's Web site at www.hawaiianair.com.
Information provided herein by the Company contains "forward-looking" information, as that term is defined by the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). These cautionary statements are being made pursuant to the provisions of the PSLRA and with the intention of obtaining the benefits of the "safe harbor" provisions of the PSLRA. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements as a result of various factors, including but not limited to risks or uncertainties detailed in the Company's filings with the Securities and Exchange Commission. Additional risk factors include, but are not limited to, successful negotiations with suppliers and vendors other than the aircraft manufacturer, the outcome of union negotiations, general economic conditions, trends in the airline industry, the effect of competition, the ability to control costs and expenses and the ability of the Company to successfully complete its interisland fleet transition. The Company undertakes no obligation to publicly update or revise any forward-looking statements.