The results for the quarter ended
"Our third quarter results were remarkably similar to our results last year though for entirely different reasons," commented
"Looking ahead to the fourth quarter, we continue to face better prospects than most of our competitors and we hope that the level of demand will strengthen more rapidly than the price of oil allowing us to remain profitable.
"As the company celebrates its 80th anniversary, we remain focused on keeping our attention rooted on the formula for success in the airline industry; delivering customer service excellence and controlling costs. In this endeavor, we are truly fortunate to work among outstanding colleagues in every branch of the organization," concluded Mr. Dunkerley.
Third Quarter Financial Results
The Company reported operating income of
Third quarter 2009 operating revenue was
Total operating expenses for the third quarter of 2009 decreased 9.8% year-over-year to
Aircraft fuel costs decreased 47.9% year-over-year in the third quarter to
The Company believes that economic fuel expense is the best measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period. The Company defines economic fuel expense as GAAP fuel expense plus (gains)/losses realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period. For the three months ended
Hawaiian's year-over-year increase in Wages and Benefits of
Third quarter 2009 non-operating expense totaled
Liquidity, Capital Resources and Fuel Hedging
-- As ofCompany HighlightsSeptember 30, 2009 the Company had: -- Unrestricted cash, cash equivalents and short-term investments of$302.9 million , and$29.8 million in restricted cash. --$83.5 million outstanding under two term loan facilities,$101.9 million outstanding under floating rate notes issued in conjunction with the acquisition of threeBoeing 767-300 ER aircraft inDecember 2006 , and additional notes payable of$28.6 million . --$45.6 million of Capital Lease obligations primarily associated with four 717-200 aircraft. -- A summary of the Company's fuel derivatives contracts as ofOctober 16, 2009 is included as Table 6.
--Investor Conference CallHawaiian Airlines was ranked as the nation's #1 carrier for on-time performance as reported by theU.S. Department of Transportation's (DOT) Air Travel Consumer Report for the months of July and August. Hawaiian has posted the nation's leading on-time performance numbers for every month in 2009. -- In celebration of its 80th anniversary of service,Hawaiian Airlines held a special homecoming ceremony in October to welcome back the actual airplane that started it all for the company 80 years ago - a 1929 Bellanca CH-300 Pacemaker. -- In September,Hawaiian Airlines announced expanded service in summer 2010 with the addition of three daily flights toHawaii fromCalifornia and debut of the A330 on itsLos Angeles route. -- In September,Hawaiian Airlines announced that it would begin charging a$10 fee for the first checked bag on interisland flights. -- In September,Hawaiian Airlines expanded its code-sharing agreement withKorean Airlines , offering its customers nonstop service betweenHawaii and Korea, as well as connecting service on flights within Korea and five other destinations inAsia . -- In August,Hawaiian Airlines announced that it had filled more than 100 positions for aircraft mechanics, service representatives, contract agents, ramp agents, maintenance and cleaning personnel in recent months, and by early 2010, an additional 170 jobs will be added, including 25 new pilots and up to 30 flight attendants, to accommodate Hawaiian's expansion when the first A330 joins the fleet next April.
About
Hawaiian is the nation's highest-ranked carrier for service quality and performance for 2008 in the 19th annual Airline Quality Rating study. Hawaiian has also led all U.S. carriers in on-time performance for each of the past five years (2004-2008) and has been an industry leader in fewest misplaced bags during that same period (#1 from 2005-2007, #2 in 2008) as reported by the
Hawaiian will mark 80 years of continuous service in
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. These risks and uncertainties include, without limitation, economic volatility, including a continued decline in the U.S. and global economies; the price and availability of aviation fuel; competition in the transpacific, interisland and South Pacific/
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
Table 1.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, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Operating Revenue: Passenger $269,199 $312,028 $779,983 $837,554 Cargo 16,346 10,775 46,403 27,553 Other 20,082 17,115 59,868 45,222 ------ ------ ------ ------ Total 305,627 339,918 886,254 910,329 ------- ------- ------- ------- Operating Expenses: Aircraft fuel, including taxes and oil 68,427 131,233 173,287 345,646 Wages and benefits 68,399 61,646 202,636 183,905 Aircraft rent 25,603 24,041 77,837 71,176 Maintenance materials and repairs 37,111 23,950 94,091 83,285 Aircraft and passenger servicing 15,340 13,859 44,570 41,845 Commissions and other selling 15,112 10,394 48,827 46,710 Depreciation and amortization 13,408 11,922 39,185 35,696 Other rentals and landing fees 12,074 10,470 38,327 27,583 Litigation settlement - - - (52,500) Other 26,427 25,094 76,119 73,211 ------ ------ ------ ------ Total 281,901 312,609 794,879 856,557 ------- ------- ------- ------- Operating Income 23,726 27,309 91,375 53,772 ------ ------ ------ ------ Nonoperating Income (Expense): Interest and amortization of debt discounts and issuance costs (5,140) (4,777) (15,160) (15,257) Interest income 1,203 1,913 3,666 5,773 Gains (losses) on investments 555 - 2,226 - Gains (losses) on fuel derivatives (3,310) (9,182) 1,813 5,269 Other, net (64) (668) (14) (532) --- ---- --- ---- Total (6,756) (12,714) (7,469) (4,747) ------ ------- ------ ------ Income Before Income Taxes 16,970 14,595 83,906 49,025 Income tax expense (benefit) (13,700) 8,558 2,209 8,558 ------- ----- ----- ----- Net Income $30,670 $6,037 $81,697 $40,467 ======= ====== ======= ======= Net Income Per Common Stock Share: Basic $0.60 $0.13 $1.58 $0.85 ===== ===== ===== ===== Diluted $0.58 $0.12 $1.57 $0.81 ===== ===== ===== ===== Weighted Average Number of Common Stock Shares Outstanding: Basic 51,437 47,828 51,595 47,571 ====== ====== ====== ====== Diluted 52,764 52,078 52,195 49,883 ====== ====== ====== ======
Table 2.Hawaiian Holdings, Inc. Pro-forma Net Income and Diluted Net Income Per Share Excluding One-time Tax Benefits (in thousands, except for per share data) Three months ended Nine months ended September 30, 2009 September 30, 2009 ------------------ ------------------ Diluted Diluted Net earnings Net earnings income per share income per share ------ --------- ------ --------- (in thousands, except for per share data) As reported - GAAP $30,670 $0.58 $81,697 $1.57 Less: Estimated one-time tax benefits (20,000) (0.38) (15,000) (0.29) ------- ----- ------- ----- Excluding one-time tax benefit $10,670 $0.20 $66,697 $1.28 ======= ===== ======= =====
Table 3.Hawaiian Holdings, Inc. Selected Statistical Data Three Months Ended September 30, -------------------------------- 2009 2008 Change ---- ---- ------ Scheduled Operations*: Revenue passenger miles (RPM) (a) 2,128.1 1,956.1 8.8% Available seat miles (ASM) (a) 2,506.1 2,435.6 2.9% Passenger revenue per RPM 12.65 cents 15.95 cents (20.7%) Passenger load factor (RPM/ASM) 84.9% 80.3% 4.6 pt. Passenger revenue per ASM (PRASM) 10.74 cents 12.81 cents (16.2%) Total Operations: Revenue passenger miles (RPM) (a) 2,128.7 1,959.3 8.6% Available seat miles (ASM) (a) 2,507.3 2,441.4 2.7% Passenger load factor (RPM/ASM) 84.9% 80.3% 4.6 pt. Operating Revenue per ASM (RASM) 12.19 cents 13.92 cents (12.4%) Operating Cost per ASM (CASM) 11.24 cents 12.81 cents (12.3%) CASM - excluding litigation settlement 11.24 cents 12.81 cents (12.3%) CASM - excluding litigation settlement and aircraft fuel 8.51 cents 7.43 cents 14.5% Nine Months Ended September 30, ------------------------------- 2009 2008 Change ---- ---- ------ Scheduled Operations*: Revenue passenger miles (RPM) (a) 6,139.0 5,920.6 3.7% Available seat miles (ASM) (a) 7,332.9 7,097.9 3.3% Passenger revenue per RPM 12.71 cents 14.15 cents (10.2%) Passenger load factor (RPM/ASM) 83.7% 83.4% 0.3 pt. Passenger revenue per ASM (PRASM) 10.64 cents 11.80 cents (9.8%) Total Operations: Revenue passenger miles (RPM) (a) 6,140.5 5,932.6 3.5% Available seat miles (ASM) (a) 7,335.0 7,114.2 3.1% Passenger load factor (RPM/ASM) 83.7% 83.4% 0.3 pt. Operating Revenue per ASM (RASM) 12.08 cents 12.80 cents (5.6%) Operating Cost per ASM (CASM) 10.84 cents 12.04 cents (10.0%) CASM - excluding litigation settlement 10.84 cents 12.78 cents (15.2%) CASM - excluding litigation settlement and aircraft fuel 8.48 cents 7.93 cents 6.9% (a) In millions. *Scheduled operations excludes charter operations.
Table 4.Our pro forma net income and diluted net income per share reflecting economic fuel expense for the three months endedHawaiian Holdings, Inc. Economic Fuel Expense (in thousands, except per-gallon amounts) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2009 2008 Change 2009 2008 Change ---- ---- ------ ---- ---- ------ Raw fuel expense $68,427 $131,233 (47.9%) $173,287 $346,030 (49.9%) Realized (gains) losses on settlement of fuel derivative contracts (682) 498 NM 10,494 (12,751) NM ---- --- -- ------ ------- -- Economic fuel expense $67,745 $131,731 (48.6%) $183,781 $333,279 (44.9%) Fuel gallons consumed 35,434 34,280 3.4% 103,558 100,221 3.3% ------ ------ --- ------- ------- --- Economic fuel cost per gallon $1.91 $3.84 (50.2%) $1.77 $3.33 (46.7%) ===== ===== ===== ===== ===== =====
Table 5.Hawaiian Holdings, Inc. Pro-forma Net Income and Diluted Net Income Per Share Reflecting Economic Fuel Expense (in thousands, except per-share data) Three months ended September 30, -------------------------------- 2009 2008 ---- ---- Diluted Diluted earnings earnings Net income per share Net income per share ---------- --------- ---------- --------- As reported - GAAP $30,670 $0.58 $6,037 $0.12 Less: mark-to-fair value gains(losses) on undesignated fuel contracts (3,992) (0.08) (8,684) (0.17) ------ ----- ------ ----- Reflecting economic fuel expense $34,662 $0.66 $14,721 $0.29 ======= ===== ======= ===== Nine months ended September 30, ------------------------------- 2009 2008 ---- ---- Diluted Diluted earnings earnings Net income per share Net income per share ---------- --------- ---------- --------- As reported - GAAP $81,697 $1.57 $40,467 $0.81 Less: mark-to-fair value gains (losses) on undesignated fuel contracts 12,307 0.24 (7,098) (0.14) ------ ---- ------ ----- Reflecting economic fuel expense $69,390 $1.33 $47,565 $0.95 ======= ===== ======= =====
Table 6.Hawaiian Holdings, Inc. Fuel Derivative Contract Summary As ofOctober 16, 2009 Weighted Average Percentage Ceiling Ceiling of Price Price Gallons Quarter's (per Range Hedged Consumption gallon) (Per Gallon) (Thousands) Hedged --------- ------------ ----------- ------------ Fourth Quarter 2009 ------------------- Crude Oil $1.69 $1.97 - $1.20 16,968 54% First Quarter 2010 ------------------- Crude Oil $1.83 $2.04 - $1.60 12,222 39% Second Quarter 2010 ------------------- Crude Oil $1.95 $2.11 - $1.73 7,392 23% Third Quarter 2010 ------------------- Crude Oil $2.01 $2.13 - $1.92 2,394 8% Percentage Weighted Floor of Average Price Gallons Quarter's Floor Range Hedged Consumption Price (Per Gallon) (Thousands) Hedged --------- ------------ ----------- ------------ Fourth Quarter 2009 ------------------- Crude Oil $1.08 $1.51 - $0.92 7,644 24% First Quarter 2010 ------------------- Crude Oil $1.21 $1.53 - $0.96 4,410 14% Second Quarter 2010 ------------------- Crude Oil $1.48 $1.54 - $1.42 1,134 4% Third Quarter 2010 ------------------- Crude Oil $1.54 $1.55 - $1.53 504 2%
Table 7.SOURCEHawaiian 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, 2009 2008 2009 2008 ---- ---- ---- ---- GAAP operating expenses $281.9 $312.6 $794.9 $856.6 Litigation settlement - - - (52.5) --- --- --- ----- Operating expenses, less litigation settlement 281.9 312.6 794.9 909.1 Aircraft fuel, including taxes and oil 68.4 131.2 173.3 345.6 ---- ----- ----- ----- Operating expenses, less litigation settlement and aircraft fuel $213.5 $181.4 $621.6 $563.5 ====== ====== ====== ====== Available Seat Miles 2,507.3 2,441.4 7,335.0 7,114.2 CASM - GAAP 11.24 cents 12.81 cents 10.84 cents 12.04 cents Add back: Litigation settlement - - - (0.74) --- --- --- ----- CASM - excluding litigation settlement 11.24 cents 12.81 cents 10.84 cents 12.78 cents Less: aircraft fuel 2.73 5.38 2.36 4.85 ---- ---- ---- ---- CASM - excluding litigation settlement and aircraft fuel 8.51 cents 7.43 cents 8.48 cents 7.93 cents ==== ==== ==== ====
Peter Ingram, CFO, +1-808-835-3030, peter.ingram@hawaiianair.com, or Investor Relations, Matt Bernier, Sr. Director, +1-808-838-5508, matt.bernier@hawaiianair.com, or Media, Alan L. Hoffman, Sr. VP, +1-808-838-6758, al.hoffman@hawaiianair.com, all of Hawaiian Airlines