* Operating profit of $25.6 million, up $12.9 million versus prior year
* Operating revenue increased 17.5% to $273 million
* CASM excluding fuel declined by 5.7% to 7.07 cents
* Unrestricted cash, cash equivalents and short-term investments of
$167 million at September 30, 2007
HONOLULU, Oct. 30 /PRNewswire-FirstCall/ -- Hawaiian Holdings, Inc.
(Amex: HA) ("Holdings" or "the Company"), parent company of Hawaiian Airlines,
Inc. ("Hawaiian"), today reported consolidated net income for the three months
ended September 30, 2007 of $19.6 million, or $0.42 per basic share and $0.41
per diluted share, on total operating revenue of $272.5 million. This result
compares to net income of $7.8 million, or $0.16 per basic and diluted share
for the three months ended September 30, 2006."We were pleased to see strong seasonal demand for Hawaii vacations, good cost control and some astute judgment by our revenue management department coincide in the third quarter to generate better results than a year ago," commented Mark Dunkerley, the Company's President and Chief Executive Officer. "Demand for travel to Hawaii proved resilient during the summer travel season, and thanks to the industry leading service and operational performance delivered by our employees we continued to attract a disproportionate share of passengers. The competitive pressures we face did not ease during the period and so we are particularly pleased to have controlled our costs so tightly and to have been able to manage our transpacific revenue so well."
Mr. Dunkerley continued, "Our competitive environment remains challenging, the seasonal fall off in demand for Hawaii vacations during the winter will inhibit our ability to manage transpacific yields as efficiently as we did during the summer, and the rising price of fuel impacts our costs so we continue to focus management attention on the rest of our cost base. A number of important cost saving initiatives have been implemented and we are looking forward to enjoying the fruits of these developments as we move forward."
Third Quarter Operating Results
The Company reported operating income of $25.6 million in the third quarter of 2007 compared to operating income of $12.7 million in the third quarter of 2006. Third quarter 2007 operating revenue was $272.5 million, a 17.5% increase compared to the third quarter of 2006. Capacity for the quarter increased 17.2% year-over-year to 2.4 billion Available Seat Miles (ASMs), resulting in Revenue per ASM (RASM) of 11.32 cents up slightly from 11.28 cents in the third quarter a year ago. Third quarter load factor increased to 87.7% from 86.1% in the same period a year ago. Passenger yield (passenger revenue per revenue passenger mile) declined slightly to 11.89 cents from 12.00 cents in the third quarter of 2006.
Hawaiian Holdings, Inc.
Selected Statistical Data
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 Change 2007 2006 Change
Scheduled
Operations:
Revenue
passenger
miles
(RPM)
(a) 2,083.9 1,738.4 19.9% 5,926.2 5,025.7 17.9%
Available
seat
miles
(ASM)
(a) 2,373.2 2,017.7 17.6% 6,773.8 5,787.9 17.0%
Passenger
revenue
per
RPM 11.89 cents 12.00 cents (1.0%) 11.18 cents 11.95 cents (6.4%)
Passenger
load
factor
(RPM/ASM) 87.8% 86.2% 1.6 pt. 87.5% 86.8% 0.7 pt.
Passenger
revenue
per
ASM
PRASM) 10.44 cents 10.34 cents 0.9% 9.78 cents 10.38 cents (5.8%)
Total
Operations:
Revenue
passenger
miles
(RPM)
(a) 2,111.2 1,768.8 19.4% 6,015.9 5,119.7 17.5%
Available
seat
miles
(ASM)
(a) 2,408.2 2,054.7 17.2% 6,881.1 5,895.7 16.7%
Passenger
load
factor
(RPM/ASM) 87.7% 86.1% 1.6 pt. 87.4% 86.8% 0.6 pt.
Operating
Revenue
per
ASM
(RASM) 11.32 cents 11.28 cents 0.3% 10.64 cents 11.34 cents (6.2%)
Operating
Cost
per
ASM
(CASM) 10.26 cents 10.67 cents (3.8%) 10.51 cents 11.05 cents (4.9%)
CASM
ex-
fuel 7.07 cents 7.50 cents (5.7%) 7.54 cents 7.97 cents (5.4%)
(a) In millions.
Total operating expenses for the third quarter of 2007 increased 12.7%
year-over-year to $247.0 million, resulting in an operating cost per available
seat mile (CASM) of 10.26 cents, down 3.8% versus the same period a year ago
on greater capacity. CASM excluding fuel for the third quarter of 2007 was
7.07 cents, a 5.7% decrease versus last year's third quarter.Aircraft fuel costs increased 18.0% year-over-year to $76.8 million and represented over 31% of operating expenses. Hawaiian's average cost per gallon of jet fuel increased 1.2% year-over-year in the third quarter to $2.27 (including taxes, delivery and hedging impacts), while block hours increased 13% primarily reflecting increased 767 operations.
Wages and benefit expense increased 2.6% versus a year ago to $53.6 million. Maintenance, materials and repairs expense increased $4.0 million to $21.1 million. The increase in maintenance expense is primarily due to a year-over-year increase in the level of Boeing 767 heavy maintenance activity and higher power-by-the-hour (PBH) charges for engine maintenance due to the inclusion of additional Boeing 767 engines in the PBH program, an increase in block hours flown, and higher per hour rates. Aircraft rent expense declined 9.7% compared to the third quarter of 2006 as a result of the December 2006 purchase of three previously leased Boeing 767-300 ER aircraft, while higher depreciation expenses reflect the ownership of these aircraft and four Boeing 767-300 EM aircraft brought into service during 2006 and 2007. Other expenses increased $3.6 million driven due in part to steady-state and transition expenses related to the transfer of reservations, accounting and information technology activity to third party vendors in conjunction with Hawaiian's ongoing cost reduction initiatives.
Third quarter 2007 non-operating expenses totaled $3.7 million, as compared to non-operating income of $0.6 million in the third quarter of 2006 due primarily to higher interest expense related to the financing of Hawaiian's aircraft acquisitions in 2006.
Liquidity, Capital Resources and Fuel Hedging:
* As of September 30, 2007, the Company had unrestricted cash, cash
equivalents and short-term investments of $167.4 million, and
$47.8 million in restricted cash.
* As of September 30, 2007, the Company's debt included $106.0 million
in two term loans at the Hawaiian level, $120.0 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 $18.5 million.
* As of September 30, 2007, Hawaiian had entered into jet fuel and
heating oil forward contracts to hedge approximately 25% of its fuel
requirements for the fourth quarter of 2007 and 14% for the first
quarter of 2008. The Company's hedge position as of September 30,
2007 is outlined in the table below:
HEATING OIL FUTURES
Average Percentage
Heating Oil of
Contract Gallons Quarterly
Price Hedged Consumption
per Gallon (thousands) Hedged
Fourth Quarter 2007 $2.07 4,872 15%
First Quarter 2008 $2.02 3,696 12%
JET FUEL FUTURES
Average Jet Percentage
Fuel of
Contract Gallons Quarterly
Price Hedged Consumption
per Gallon (thousands) Hedged
Fourth Quarter 2007 $2.17 3,276 10%
First Quarter 2008 $2.21 714 2%
Third Quarter Highlights and Recent Events
* Hawaiian announced approval from the U.S. Department of Transportation
(DOT) to provide nonstop flights between Honolulu and Manila in the
Philippines. When its service begins in 2008, Hawaiian will be the
only U.S. carrier providing nonstop service between Hawaii and the
Philippines.
* In August, Hawaiian Airlines ranked as the top domestic airline
serving Hawaii in Travel + Leisure magazine's 2007 World's Best
Awards -- the ninth consecutive year Hawaiian has earned this
distinction.
* In early August, the U.S. Department of Transportation's monthly
Consumer Air Travel Report for June ranked Hawaiian #1 for on-time
performance, fewest cancellations and fewest misplaced bags for the
second straight month, In June, 92.9 percent of Hawaiian's flights
arrived on time, surpassing the industry average by 24.8 percentage
points. It was Hawaiian's 41st month out of the previous 44 as the
nation's most punctual airline.
* In August, Hawaiian announced an agreement to become the 'Official
Airline of the Seattle Seahawks.' For the 2007 NFL season, Hawaiian
will fly the Seahawks to their games in Phoenix, San Francisco,
Pittsburgh, Cleveland, St. Louis, Philadelphia, Charlotte and Atlanta.
The Company also announced an agreement to carry the Oakland Raiders
to all of their 2007 away games for the eighth consecutive season.
Investor Conference CallHawaiian Holdings' quarterly earnings conference call is scheduled to begin later today (Tuesday, October 30, 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). 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 Nine Months Ended
September 30, September 30
2007 2006 2007 2006
Operating Revenue:
Passenger $247,728 $208,660 $662,443 $600,405
Cargo 8,111 7,884 22,555 23,802
Charter 2,607 2,512 7,223 6,737
Other 14,061 12,778 39,649 37,472
Total 272,507 231,834 731,870 668,416
Operating Expenses:
Aircraft fuel, including taxes and
oil 76,821 65,096 204,279 181,274
Wages and benefits 53,585 52,243 171,528 166,469
Aircraft rent 24,629 27,268 73,208 81,790
Maintenance materials and repairs 21,122 17,130 69,420 52,164
Aircraft and passenger servicing 13,172 12,163 41,109 35,920
Commissions and other selling 14,056 11,184 42,436 36,390
Depreciation and amortization 11,958 7,156 33,353 20,881
Other rentals and landing fees 7,521 6,393 21,324 18,458
Other 24,091 20,505 66,390 57,952
Total 246,955 219,138 723,047 651,298
Operating Income 25,552 12,696 8,823 17,118
Nonoperating Income (Expense):
Interest and amortization of debt
discounts and issuance costs (6,397) (3,886) (19,353) (12,354)
Losses due to redemption,
extinguishment and modification
of long-term debt - (1,030) - (32,134)
Interest income 2,729 3,518 7,924 8,984
Capitalized interest - 1,344 1,309 2,603
Other, net (64) 683 (1,875) (5,069)
Total (3,732) 629 (11,995) (37,970)
Net Income (Loss) Before Income
Taxes 21,820 13,325 (3,172) (20,852)
Income tax expense (benefit) 2,243 5,565 (6,916) 10,065
Net Income (Loss) $19,577 $7,760 $3,744 $(30,917)
Net Income (Loss) Per Common Stock
Share:
Basic $0.42 $0.16 $0.08 $(0.66)
Diluted $0.41 $0.16 $0.08 $(0.66)
Weighted Average Number of
Common Stock Shares Outstanding:
Basic 47,153 47,171 47,153 47,141
Diluted 47,259 47,251 47,339 47,141
Hawaiian Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures
(in millions, except for CASM data) (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
GAAP operating
expenses $247.0 $219.1 $723.0 $651.3
Aircraft fuel,
including taxes
and oil 76.8 65.1 204.3 181.3
Adjusted operating
expenses $170.1 $154.0 $518.8 $470.0
Available Seat
Miles 2,408.2 2,054.7 6,881.1 5,895.7
CASM 10.26 cents 10.67 cents 10.51 cents 11.05
Less aircraft
fuel 3.19 3.17 2.96 3.07
CASM - ex-fuel 7.07 cents 7.50 cents 7.54 cents 7.97
SOURCE Hawaiian Holdings, Inc.CONTACT: Peter Ingram, CFO of Hawaiian Airlines, +1-808-835-3030,
peter.ingram@hawaiianair.com; or Investor Relations, Allyson Pooley,
apooley@icrinc.com, or Andrew Greenebaum, agreenebaum@icrinc.com, both of ICR,
Inc., +1-310-954-1100, for Hawaiian Airlines; or Media, Keoni Wagner, VP
Public Affairs of Hawaiian Airlines, +1-808-838-6778,
keoni.wagner@hawaiianair.com