* Operating revenue increased 1.5% to $215 million * Hawaiian records industry leading load factor of 87.5% * Cost cutting efforts continue resulting in a 5.5% decline in CASM excluding fuel * Unrestricted cash, cash equivalents and short-term investments of $130.7 million at March 31, 2007 versus $114.5 million at year end 2006HONOLULU, May 2 /PRNewswire-FirstCall/ -- Hawaiian Holdings, Inc. (Amex: HA; NYSE Arca) ("Holdings" or "the Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported a consolidated net loss for the three months ended March 31, 2007 of $11.9 million, or $0.25 per basic and diluted share, on total operating revenue of $215.2 million.
"The first quarter saw a continuation of the same circumstances which weighed on our fourth quarter numbers. Intense competition both across the Pacific and between the Islands of our State and some weakness in demand for travel to Hawaii all put downward pressure on our unit revenues. Nonetheless, we succeeded in controlling our costs with our unit costs excluding fuel declining by 5.5% in the quarter," commented Mark B. Dunkerley, the Company's President and Chief Executive Officer. "Additionally, we are pleased to report that on March 8th we introduced the third of our four 767-300EM aircraft into service following the completion of its modification and overhaul, and on March 16th, we resumed daily service between San Diego, California and Maui."
Mr. Dunkerley continued, "We enjoyed some good and well-earned publicity from being ranked as the best U.S. airline in the annual Airline Quality Review, and I would like to express my thanks to the employees of Hawaiian whose hard work has earned this notable accolade. While our business environment remains difficult, we continue to execute on our corporate strategy and expect to see our unit costs continue to decline in the second quarter."
First Quarter Operating Results
The Company reported an operating loss of $16.1 million in the first quarter of 2007 compared to an operating loss of $4.6 million in the first quarter of 2006. First quarter operating revenue was $215.2 million, a 1.5% increase compared to operating revenue in the first quarter of 2006. Capacity for the quarter increased 14.0% year-over-year to 2.2 billion Available Seat Miles (ASMs), resulting in a Revenue per ASM (RASM) decrease of 11.0% to 9.96 cents. First quarter load factor was essentially flat at 87.5%. Passenger yield (passenger revenue per revenue passenger mile) declined 11.1%, to 10.37 cents from 11.66 cents in the first quarter 2006.
3 Months Ended March 31, 2007 2006 Change Scheduled Operations: Revenue passenger miles (RPM) (a) 1,856.9 1,625.8 14.2% Available seat miles (ASM) (a) 2,123.4 1,858.6 14.2% Passenger revenue per RPM 10.37 cents 11.66 cents (11.1%) Passenger load factor (RPM/ASM) 87.4% 87.5% (0.1)pt Total Operations: Revenue passenger miles (RPM) (a) 1,890.7 1,660.6 13.9% Available seat miles (ASM) (a) 2,161.1 1,896.2 14.0% Passenger load factor (RPM/ASM) 87.5% 87.6% (0.1)pt Operating Revenue per ASM (RASM) 9.96 cents 11.19 cents (11.0%) Operating Cost per ASM (CASM) 10.70 cents 11.43 cents (6.4%) CASM ex-fuel 7.96 cents 8.42 cents (5.5%) (a) In millions.Total operating expenses for the first quarter of 2007 increased 6.8% to $231.3 million, resulting in an operating cost per available seat mile (CASM) of 10.70 cents, down 6.4% versus the same period a year ago on greater capacity. CASM excluding fuel for the first quarter of 2007 was 7.96 cents, a 5.5% decrease versus the same quarter in the prior year.
Wages and benefit expense declined slightly versus a year ago to $58.0 million. Maintenance, materials and repairs expense increased $8.3 million to $25.1 million. The increase in maintenance expenses is primarily attributable to increased engine maintenance expenses, including higher power-by-the-hour (PBH) charges for engine maintenance due to an increase in block hours, the enrollment of additional engines into PBH programs relative to the year earlier period and higher per hour rates, as well as engine overhaul expenses related to a 767 engine not previously covered under a PBH arrangement. Aircraft rent expense declined $3.2 million or 11.8% compared to the first quarter of 2006 as a result of the purchase in December of 2006 of three previously leased Boeing 767-300ER aircraft.
Jet fuel prices in the first quarter of 2007 declined relative to the first quarter of 2006, but remained at high by historical standards. Aircraft fuel costs totaled $59.3 million and represented close to 26% of operating expenses. Hawaiian's average cost per gallon of jet fuel in the first quarter was $1.94 (including taxes, delivery and hedging impacts), down 7.2%, compared to the first quarter of 2006, helping to offset a 14.2% increase in block hours reflecting additional operations by both the Boeing 717 and Boeing 767 fleets. As a result of ongoing fuel consumption initiatives, Hawaiian's first quarter fuel consumption per block hour declined approximately 2% relative to the year earlier period.
The Company reported a first quarter 2007 loss before income taxes of $19.8 million. First quarter 2007 non-operating expenses totaled $3.7 million, as compared to non-operating expenses of $7.5 million in the first quarter of 2006. Higher interest expense in the first quarter of 2007 resulting from the expansion of Hawaiian's term loans and aircraft borrowings in 2006 was largely offset by lower expenses related to fuel hedging activities. Additionally, the prior year period included $3.1 million of expense related to the term loan refinancing.
Liquidity, Capital Resources and Fuel Hedging: * As of March 31, 2007, the Company had unrestricted cash, cash equivalents and short-term investments of $130.7 million, and $39.9 million in restricted cash. * As of March 31, 2007, the Company's debt included $110.5 million in two term loans at the Hawaiian level, $124.0 million in floating rate notes issued in conjunction with the acquisition of three previously leased Boeing 767-300 ER aircraft in December 2006 and additional notes payable of $20.6 million. * As of March 31, 2007, Hawaiian had entered into jet fuel forward contracts to hedge approximately 23% of its fuel requirements for the second quarter of 2007, and 4% and 1%, respectively, for the third and fourth quarters of 2007. The Company's current jet fuel hedge position is outlined in the table below: Average Percentage of Settlement Quarterly Price of Forward Gallons Hedged Consumption Contract (thousands) Hedged Second Quarter 2007 $1.92 7,434 23% Third Quarter 2007 $1.97 1,218 4% Fourth Quarter 2007 $2.00 252 1% First Quarter Highlights and Recent Events * In late April, Hawaiian added Continental's U.S. routes to its frequent flyer benefits. Hawaiian members are now able to earn and redeem HawaiianMiles anytime they fly Continental Airlines in the U.S., including Continental Express flights operated by ExpressJet Airlines and Chautauqua Airlines, as well as select Continental Connection flights operated by CommutAir. * In early April, the U.S. Department of Transportation's monthly Consumer Air Travel Report for February ranked Hawaiian #1 for on-time performance, fewest cancellations and fewest complaints. Hawaiian was also ranked #3 for fewest misplaced bags. * In early April, Hawaiian Airlines received the highest rating of any U.S. airline in the 2007 Airline Quality Rating report. The comprehensive annual study, conducted by the University of Nebraska at Omaha Aviation Institute and the Wichita State University School of Business for the past 17 years, evaluated the nation's 18 largest carriers using a weighted average of 15 elements in four major areas important to consumers when judging quality airline services. * In late March, Hawaiian unveiled its next generation airline website. The new evocative site offers consumers an unsurpassed level of personalized convenience to plan and book travel. * On March 16th, Hawaiian Airlines resumed its daily nonstop year-round service connecting San Diego and Kahului, Maui. * Effective February 16th, Hawaiian appointed Hoyt Zia as Senior Vice President, General Counsel and Corporate Secretary. Investor Conference CallHawaiian Holdings' quarterly earnings conference call is scheduled to begin later today (Wednesday, May 2, 2007) at 5:00 p.m., Eastern Time (USA). The conference call will be broadcast live over the Internet. Investors may listen to the live audio webcast on the investor relations section of the Company's website at www.HawaiianAirlines.com. For those who are not available for the live broadcast, the call will be archived on Hawaiian's investor website.
About Hawaiian Airlines
The nation's top-ranked airline for service in the 2007 Airline Quality Ratings, Hawaiian also led all U.S. carriers in on-time performance for 2004, 2005 and 2006 (including a record 36 consecutive months from November 2003 to October 2006,) and in fewest misplaced bags for 2005 and 2006, as reported by the U.S. Department of Transportation. Consumer surveys by Conde Nast Traveler, Travel + Leisure, and Zagat all rank Hawaiian as the top domestic airline serving Hawaii.
Now in its 78th year of continuous service in Hawaii, Hawaiian is the state's biggest and longest-serving airline, as well as the second largest provider of passenger air service between the U.S. mainland and Hawaii. Hawaiian offers nonstop service to Hawaii from more U.S. gateway cities than any other airline (nine), as well as service to Australia, American Samoa and Tahiti. Hawaiian also provides approximately 100 daily jet flights among the Hawaiian Islands.
Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (Amex: HA; NYSE Arca). Additional information is available at HawaiianAirlines.com.
Forward Looking Statements
The foregoing information contains certain forward-looking statements that reflect the Company's current views with respect to certain current and future events and financial performance. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment which may cause the Company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. Any forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the Company's financial results may be found in the Company's filings with the Securities and Exchange Commission.
Hawaiian Holdings, Inc. Consolidated Statements of Operations (in thousands, except for per share data) (unaudited) Three Months Ended March 31, 2007 2006 Operating Revenue: Passenger $192,557 $189,590 Cargo 6,990 8,088 Charter 2,403 2,274 Other 13,241 12,138 Total 215,191 212,090 Operating Expenses: Aircraft fuel, including taxes and oil 59,294 56,962 Wages and benefits 57,997 58,169 Aircraft rent 24,140 27,358 Maintenance materials and repairs 25,062 16,772 Aircraft and passenger servicing 14,090 11,997 Commissions and other selling 13,384 12,904 Depreciation and amortization 10,226 6,764 Other rentals and landing fees 6,985 5,915 Other 20,143 19,843 Total 231,321 216,684 Operating Loss (16,130) (4,594) Nonoperating Income (Expense): Interest and amortization of debt discounts and issuance costs (6,542) (3,936) Losses due to redemption, prepayment, extinguishment and modification of long-term debt and lease agreements -- (3,072) Interest income 2,821 2,429 Capitalized interest 909 299 Other, net (848) (3,234) Total (3,660) (7,514) Loss Before Income Taxes (19,790) (12,108) Income tax expense (benefit) (7,898) 184 Net Loss $(11,892) $(12,292) Net Loss Per Common Stock Share: Basic $(0.25) $(0.26) Diluted $(0.25) $(0.26) Weighted Average Number of Common Stock Shares Outstanding: Basic 47,153 46,464 Diluted 47,153 46,464 Hawaiian Holdings, Inc. Reconciliation of Non-GAAP Financial Measures (in millions, except for CASM data) (unaudited) Three Months Ended March 31, 2007 2006 GAAP operating expenses $231.3 $216.7 Aircraft fuel, including taxes and oil 59.3 57.0 Adjusted operating expenses $172.0 $159.7 Available Seat Miles 2,161.1 1,896.2 CASM 10.70 cents 11.43 cents Less aircraft fuel 2.74 3.01 CASM - ex-fuel 7.96 cents 8.42 centsSOURCE Hawaiian Holdings, Inc.
CONTACT: Peter Ingram, CFO, +1-808-835-3030,
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