Hawaiian Holdings Reports 2021 Third Quarter Financial Results

HONOLULU — Hawaiian Holdings, Inc. (NASDAQ: HA) (the “Company”), parent company of Hawaiian Airlines, Inc. (“Hawaiian”), today reported its financial results for the third quarter of 2021.

Third Quarter 2021 - Key Financial Metrics

 

 

GAAP

 

YoY Change

 

Adjusted

 

YoY Change

Net Income (Loss)

 

$14.7M

 

$111.8M

 

$(48.7)M

 

$124.0M

Diluted EPS

 

$0.28

 

$2.39

 

$(0.95)

 

$2.81

Pre-tax Margin

 

3.8%

 

+192.8 pts.

 

(12.0)%

 

+309.4 pts.

 

"While our third quarter results were affected by the resurgence of COVID-19 cases associated with the Delta variant, momentum had moved in a positive direction by the end of the quarter, and we remain absolutely confident in our long-term prospects as leisure travel recovers globally," said Peter Ingram, Hawaiian Airlines president and CEO. "Throughout this year of recovery the outstanding contributions of my colleagues have remained constant, and I am honored to be a part of this resilient team."

Statistical data, as well as a reconciliation of the non-GAAP financial measures presented herein, can be found in the accompanying tables.

Third Quarter 2021

Financial Results

For the third quarter of 2021, the Company reported GAAP net income of $14.7 million, and an adjusted net loss of $48.7 million. 

The Company reported total revenue of $508.8 million, down 33% compared to the third quarter of 2019, on 21% lower capacity.

The Company reported total operating expenses of $465.4 million, and operating expenses excluding non-recurring items of $543.6 million, down 15% compared to the third quarter of 2019.

The Company achieved positive adjusted EBITDA for the first time since the beginning of the COVID-19 pandemic, with EBITDA of $83.0 million, and adjusted EBITDA of $2.8 million.

Routes and Network 

In September 2021, the Company resumed scheduled service between Hawaiʻi and American Samoa. Travelers from Hawaiʻi to American Samoa must follow a series of health and safety protocols imposed by the government of American Samoa, including providing proof of vaccination and negative pre-travel test results.

In December 2021, the Company will resume service between Hawaiʻi and Sydney, Australia. Effective November 1, 2021, all fully vaccinated Australian citizens will be allowed to travel to and from Sydney, Australia with no quarantine requirements.

In the third quarter of 2021, the Company was one of six commercial airlines called to duty as part of the Civil Reserve Air Fleet. The Company deployed two widebody aircraft to transport over 3,000 Afghan refugees from Europe to U.S. military bases on the mainland on 13 flights over six days.

The State of Hawai‘i continued its Safe Travels program in the third quarter of 2021, which permits:

 

During the third quarter of 2021, the Company operated 79% of its 2019 third quarter system capacity, comprised of 114%, 76% and 13% capacity on its North America, Neighbor Island and International routes, respectively.

Liquidity and Capital Resources

As of September 30, 2021, the Company had:

 

As of September 30, 2021, the Company had $2.2 billion in liquidity, including its undrawn $235 million revolving credit facility.

Fleet and Financing

In August 2021, the Company extended leases for two A330-200 aircraft.

In September 2021, the Company commenced a cash tender offer for all of its 7.375% Series 2020-1A pass through certificates due 2027 and 11.250% Series 2020-1B pass through certificates due 2025. The tender offer currently expires on November 1, 2021 and settlement is expected to occur on November 4, 2021.

Guest Experience

In August 2021, the Company launched operations in the new Mauka Concourse at Daniel K. Inouye International Airport (HNL). The new concourse offers an improved experience for travelers and visitors, the Company's employees and all other airport users. In addition to helping relieve peak-hour gate congestion at HNL, the concourse’s modern and versatile gates can accommodate both narrow-body and wide-body aircraft, which brings more flexibility and efficiency across the Company's operations.

In October 2021, the Company moved to a new terminal at Los Angeles International Airport. Also known as Tom Bradley International Terminal, Terminal B offers a modern and comfortable facility, featuring more amenities, expanded dining and shopping options and a spacious gate area.

In September 2021, the Company introduced its new 'Travel Pono' in-flight video, furthering its commitment to educate guests arriving in Hawaiʻi on how to safely and responsibly enjoy the islands.

The Company continues its enhanced cleaning procedures and guest-facing protocols to minimize the risk of transmission of COVID-19. Understanding that health and safety are still critical concerns for our guests, the Company will continue to focus on protective measures such as:

 

Environmental, Social and Corporate Governance

In October 2021, the Company participated in the International Air Transport Association Annual General Meeting, where the global air transport industry furthered its commitment to achieve net-zero carbon emissions by 2050. The Company has already pledged to be carbon neutral by 2050 and is committed to reducing its emissions and making the changes needed for a sustainable future.

Fourth Quarter 2021 Outlook

The Company expects its network to remain largely consistent with the third quarter of 2021, with some incremental recovery of its International network in the latter half of December. The Company expects a decline in total revenue compared to the third quarter of 2021, driven by seasonal factors and the impact the Delta variant has had on advance bookings. The Company expects an increase in operating expenses, excluding fuel and non-recurring items, compared to the third quarter of 2021, primarily driven by expenses related to capacity readiness.

The table below summarizes the Company's expectations for the quarter ending December 31, 2021, expressed as an expected percentage change compared to the results for the quarter ended December 31, 2019, as applicable.

Item

 

Fourth Quarter 2021 Guidance

 

GAAP Equivalent

 

GAAP Fourth Quarter 2021 Guidance

ASMs

 

Down 18 to 21%

 

 

 

 

Total Revenue

 

Down 32 to 37%

 

 

 

 

Operating Expenses, excluding fuel and non-recurring items (a)

 

Down 7 to 11%

 

Operating Expenses (a)

 

Down 7 to 11%

Gallons of Jet Fuel Consumed

 

Down 21.5% to 24.5%

 

 

 

 

Fuel Price per Gallon (b)

 

$2.41

 

 

 

 

Adjusted EBITDA (c)

 

$(110) million to $(50)  million

 

 

 

 

Effective Tax Rate

 

~21%

 

 

 

 

(a) See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding fuel and non-recurring items.

(b) Fuel Price per Gallon estimates are based on the October 13, 2021 fuel forward curve.

(c) The Company is not providing a reconciliation of adjusted EBITDA to GAAP net income, the most directly comparable GAAP measure, as it is unable, without unreasonable efforts, to calculate certain special and non-recurring charges, which could have a significant impact on the GAAP measure.

Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.

Full Year 2021 Outlook

The Company expects its capital expenditures for the full year of 2021 to be between $40 and $45 million.

Investor Conference Call

Hawaiian Holdings’ quarterly results conference call is scheduled to begin today (October 26, 2021) at 4:30 p.m. Eastern Time (USA).  The conference call will be broadcast live over the Internet. Investors may access and listen to the live audio webcast on the investor relations section of the Company’s website at HawaiianAirlines.com. For those who are not available for the live webcast, a replay of the webcast will be archived for 90 days on the investor relations section of the Company's website.

About Hawaiian Airlines

Hawaiian® has led all U.S. carriers in on-time performance for each of the past 17 years (2004-2020) as reported by the U.S. Department of Transportation and was named the #1 U.S. airline by Condé Nast Traveler’s 2021 Readers Choice Awards. Consumer surveys by Travel + Leisure and TripAdvisor have placed Hawaiian among the top of all domestic airlines serving Hawaiʻi.

Now in its 92nd year of continuous service, Hawaiian is Hawaiʻi's biggest and longest-serving airline. Hawaiian offers approximately 130 flights within the Hawaiian Islands, daily nonstop flights between Hawaiʻi and 16 U.S. gateway cities – more than any other airline – as well as service connecting Honolulu and American Samoa, Japan, South Korea, Sydney, and Tahiti. As a result of the COVID-19 pandemic, Hawaiian’s Auckland and Brisbane flights remain suspended.

The airline is committed to connecting people with aloha by offering complimentary meals for all guests on transpacific routes and the convenience of no change fees on Main Cabin and Premium Cabin seats. HawaiianMiles members also enjoy flexibility with miles that never expire.

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com. Follow Hawaiian’s Twitter updates (@HawaiianAir), become a fan on Facebook  (Hawaiian Airlines), and follow us on Instagram (hawaiianairlines). For career postings and updates, follow Hawaiian’s LinkedIn page.

For media inquiries, please visit Hawaiian Airlines’ online newsroom.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to certain current and future events and financial performance.  Such forward-looking statements include, without limitation, the Company’s recovery from the COVID-19 pandemic; the Company’s long-term outlook; new route schedules, including between Hawaiʻi and Australia; the timing of the closing of the Company’s tender offer for its 7.375% Series 2020-1A pass through certificates due 2027 and 11.250% Series 2020-1B pass through certificates due 2025; the Company’s continued focus on protective measures in response to the COVID-19 pandemic; the Company’s commitment to carbon neutrality and sustainability; expectations related to the recovery of our international routes; the Company’s outlook for the fourth quarter of 2021, including expectations regarding ASMs, total revenue, operating expense, adjusted EBITDA, effective tax rate, fuel price per gallon, gallons of jet fuel consumed, capital expenditures and the drivers associated with these measures; the Company's expectations regarding the impact of the new Mauka Concourse at Daniel K. Inouye International Airport on its operations and guest experience; and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing.  Words such as “expects,” “anticipates,” “projects,” “intends,” “plans,” “believes,” “estimates,” variations of such words, and similar expressions are also intended to identify such forward-looking statements.  These forward-looking statements are and will be subject to many risks, uncertainties and assumptions relating to the Company’s operations and business environment, all of 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, the continuing and developing effects of the spread of COVID-19 on the Company's business operations and financial condition; the duration of government-mandated and other restrictions on travel; the full effect that the quarantine, restrictions on travel, vaccination and testing requirements and other measures to limit the spread of COVID-19 will have on demand for air travel in the markets in which the Company operates; fluctuations and the extent of declining or fluctuating demand for air transportation in the markets in which the Company operates; the Company's dependence on the tourism industry; the Company's ability to manage its available cash; the Company’s ability to accurately forecast economic volatility; macroeconomic developments; political developments; the price and availability of aircraft fuel; labor negotiations; regulatory determinations and related developments; competitive pressures, including the impact of industry capacity between North America and Hawai‘i and interisland; changes in the Company's future capital needs; and foreign currency exchange rate fluctuations.

The risks, uncertainties and assumptions referred to above that could cause the Company’s results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company’s other public filings and public announcements, including the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission.  All forward-looking statements included in this document are based on information available to the Company on the date hereof.  The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.

 

Table 1.

Hawaiian Holdings, Inc.

Consolidated Statements of Operations (unaudited)

 

 

Three Months Ended September 30,

 

Nine months ended September 30,

 

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

 

 

(in thousands, except per share data)

Operating Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Passenger

 

$

454,044 

 

 

$

39,777 

 

 

1,041.5 

%

 

$

947,784 

 

 

$

573,008 

 

 

65.4 

%

Other

 

54,804 

 

 

36,205 

 

 

51.4 

%

 

154,062 

 

 

122,122 

 

 

26.2 

%

Total

 

508,848 

 

 

75,982 

 

 

569.7 

%

 

1,101,846 

 

 

695,130 

 

 

58.5 

%

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Wages and benefits

 

180,405 

 

 

148,582 

 

 

21.4 

%

 

511,342 

 

 

478,725 

 

 

6.8 

%

Aircraft fuel, including taxes and delivery

 

108,785 

 

 

14,544 

 

 

648.0 

%

 

240,361 

 

 

135,025 

 

 

78.0 

%

Maintenance, materials and repairs

 

48,081 

 

 

18,664 

 

 

157.6 

%

 

119,416 

 

 

93,067 

 

 

28.3 

%

Aircraft and passenger servicing

 

30,915 

 

 

5,140 

 

 

501.5 

%

 

73,896 

 

 

46,459 

 

 

59.1 

%

Depreciation and amortization

 

33,899 

 

 

36,734 

 

 

(7.7)

%

 

104,368 

 

 

115,516 

 

 

(9.7)

%

Commissions and other selling

 

20,964 

 

 

5,201 

 

 

303.1 

%

 

49,643 

 

 

34,844 

 

 

42.5 

%

Aircraft rent

 

26,680 

 

 

26,230 

 

 

1.7 

%

 

84,200 

 

 

77,120 

 

 

9.2 

%

Other rentals and landing fees

 

36,414 

 

 

14,156 

 

 

157.2 

%

 

83,421 

 

 

57,599 

 

 

44.8 

%

Purchased services

 

27,361 

 

 

22,878 

 

 

19.6 

%

 

75,229 

 

 

77,006 

 

 

(2.3)

%

Special items

 

— 

 

 

17,489 

 

 

(100.0)

%

 

8,983 

 

 

178,407 

 

 

(95.0)

%

Government grant recognition

 

(78,256)

 

 

(129,088)

 

 

(39.4)

%

 

(320,645)

 

 

(240,648)

 

 

33.2 

%

Other

 

30,133 

 

 

16,525 

 

 

82.3 

%

 

82,854 

 

 

80,143 

 

 

3.4 

%

Total

 

465,381 

 

 

197,055 

 

 

136.2 

%

 

1,113,068 

 

 

1,133,263 

 

 

(1.8)

%

Operating Income (Loss)

 

43,467 

 

 

(121,073)

 

 

(135.9)

%

 

(11,222)

 

 

(438,133)

 

 

(97.4)

%

Nonoperating Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

Other nonoperating special items

 

— 

 

 

(7,011)

 

 

 

 

— 

 

 

(7,011)

 

 

 

Interest expense and amortization of debt discounts and issuance costs

 

(29,897)

 

 

(11,596)

 

 

 

 

(83,905)

 

 

(26,612)

 

 

 

Interest income

 

2,067 

 

 

1,942 

 

 

 

 

4,661 

 

 

7,728 

 

 

 

Capitalized interest

 

880 

 

 

831 

 

 

 

 

2,340 

 

 

2,583 

 

 

 

Gains (losses) on fuel derivatives

 

— 

 

 

(297)

 

 

 

 

217 

 

 

(6,933)

 

 

 

Loss on extinguishment of debt

 

— 

 

 

— 

 

 

 

 

(3,994)

 

 

— 

 

 

 

Other components of net periodic benefit cost

 

981 

 

 

(136)

 

 

 

 

2,943 

 

 

589 

 

 

 

Other, net

 

1,671 

 

 

(6,244)

 

 

 

 

23,011 

 

 

(3,504)

 

 

 

Total

 

(24,298)

 

 

(22,511)

 

 

 

 

(54,727)

 

 

(33,160)

 

 

 

Income (Loss) Before Income Taxes

 

19,169 

 

 

(143,584)

 

 

 

 

(65,949)

 

 

(471,293)

 

 

 

Income tax expense (benefit)

 

4,500 

 

 

(46,485)

 

 

 

 

(13,750)

 

 

(122,918)

 

 

 

Net Income (Loss)

 

$

14,669 

 

 

$

(97,099)

 

 

 

 

$

(52,199)

 

 

$

(348,375)

 

 

 

Net Income (Loss) Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29 

 

 

$

(2.11)

 

 

 

 

$

(1.03)

 

 

$

(7.58)

 

 

 

Diluted

 

$

0.28 

 

 

$

(2.11)

 

 

 

 

$

(1.03)

 

 

$

(7.58)

 

 

 

Weighted Average Number of Common Stock Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

51,210 

 

 

46,001 

 

 

 

 

50,619 

 

 

45,980 

 

 

 

Diluted

 

51,825 

 

 

46,001 

 

 

 

 

50,619 

 

 

45,980 

 

 

 

 

 

Hawaiian Holdings, Inc.

Consolidated Balance Sheet (unaudited)

 

 

September 30, 2021

(unaudited)

 

December 31, 2020

 

 

(in thousands, except shares)

ASSETS

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

714,597 

 

 

$

509,639 

 

Restricted cash

 

31,822 

 

 

— 

 

Short-term investments

 

1,279,953 

 

 

354,782 

 

Accounts receivable, net

 

55,041 

 

 

67,527 

 

Income taxes receivable

 

94,543 

 

 

95,002 

 

Spare parts and supplies, net

 

35,116 

 

 

35,442 

 

Prepaid expenses and other

 

77,489 

 

 

56,086 

 

Total

 

2,288,561 

 

 

1,118,478 

 

Property and equipment, less accumulated depreciation and amortization of $990,444 and $894,519 as of September 30, 2021 and December 31, 2020, respectively

 

1,983,040 

 

 

2,085,030 

 

Other Assets:

 

 

 

 

Assets held for sale

 

29,672 

 

 

— 

 

Operating lease right-of-use assets

 

554,850 

 

 

627,359 

 

Long-term prepayments and other

 

99,651 

 

 

133,663 

 

Intangible assets, net

 

13,500 

 

 

13,500 

 

Total Assets

 

$

4,969,274 

 

 

$

3,978,030 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable

 

$

131,341 

 

 

$

112,002 

 

Air traffic liability and current frequent flyer deferred revenue

 

721,446 

 

 

533,702 

 

Other accrued liabilities

 

150,276 

 

 

140,081 

 

Current maturities of long-term debt, less discount

 

119,980 

 

 

115,019 

 

Current maturities of finance lease obligations

 

24,219 

 

 

21,290 

 

Current maturities of operating leases

 

80,792 

 

 

82,454 

 

Total

 

1,228,054 

 

 

1,004,548 

 

Long-Term Debt

 

1,851,672 

 

 

1,034,805 

 

Other Liabilities and Deferred Credits:

 

 

 

 

Noncurrent finance lease obligations

 

106,940 

 

 

120,618 

 

Noncurrent operating leases

 

442,093 

 

 

503,376 

 

Accumulated pension and other post-retirement benefit obligations

 

211,100 

 

 

217,737 

 

Other liabilities and deferred credits

 

81,545 

 

 

78,908 

 

Noncurrent frequent flyer deferred revenue

 

216,184 

 

 

201,239 

 

Deferred tax liability, net

 

204,042 

 

 

216,642 

 

Total

 

1,261,904 

 

 

1,338,520 

 

Commitments and Contingencies

 

 

 

 

Shareholders’ Equity:

 

 

 

 

Special preferred stock, $0.01 par value per share, three shares issued and outstanding as of September 30, 2021 and December 31, 2020

 

— 

 

 

— 

 

Common stock, $0.01 par value per share, 51,212,761 and 48,145,093 shares outstanding as of September 30, 2021 and December 31, 2020, respectively

 

512 

 

 

481 

 

Capital in excess of par value

 

267,865 

 

 

188,593 

 

Accumulated income

 

473,411 

 

 

525,610 

 

Accumulated other comprehensive loss, net

 

(114,144)

 

 

(114,527)

 

Total

 

627,644 

 

 

600,157 

 

Total Liabilities and Shareholders’ Equity

 

$

4,969,274 

 

 

$

3,978,030 

 

Hawaiian Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

 

 

 

Nine months ended September 30,

 

 

2021

 

2020

 

 

(in thousands)

Net cash provided by (used in) Operating Activities

 

$

311,300 

 

 

$

(173,482)

 

Cash flows from Investing Activities:

 

 

 

 

Additions to property and equipment, including pre-delivery payments

 

(34,144)

 

 

(101,775)

 

Proceeds from the purchase assignment and sale leaseback

 

— 

 

 

114,000 

 

Proceeds from the disposition of aircraft related equipment

 

394 

 

 

— 

 

Purchases of investments

 

(1,529,293)

 

 

(408,955)

 

Sales of investments

 

598,979 

 

 

214,469 

 

Net cash used in investing activities

 

(964,064)

 

 

(182,261)

 

Cash flows from Financing Activities:

 

 

 

 

Proceeds from the issuance of common stock

 

68,132 

 

 

— 

 

Long-term borrowings

 

1,251,705 

 

 

602,264 

 

Repayments of long-term debt and finance lease obligations

 

(405,703)

 

 

(64,686)

 

Dividend payments

 

— 

 

 

(5,514)

 

Debt issuance costs and discounts

 

(24,664)

 

 

(3,506)

 

Repurchases of common stock

 

— 

 

 

(7,510)

 

Payment for taxes withheld for stock compensation

 

(1,763)

 

 

(1,359)

 

Other

 

1,837 

 

 

— 

 

Net cash provided by financing activities

 

889,544 

 

 

519,689 

 

Net increase in cash and cash equivalents

 

236,780 

 

 

163,946 

 

Cash, cash equivalents, and restricted cash - Beginning of Period

 

509,639 

 

 

373,056 

 

Cash, cash equivalents, and restricted cash - End of Period

 

$

746,419 

 

 

$

537,002 

 

 

 

Table 2.

Hawaiian Holdings, Inc.

Selected Statistical Data (unaudited)

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

 

 

(in thousands, except as otherwise indicated)

Scheduled Operations (a) :

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passengers flown

 

2,056 

 

 

331 

 

 

521.1 

%

 

4,512 

 

 

2,873 

 

 

57.0 

%

Revenue passenger miles (RPM)

 

3,181,165 

 

 

181,878 

 

 

1,649.1 

%

 

7,000,012 

 

 

3,988,435 

 

 

75.5 

%

Available seat miles (ASM)

 

4,188,971 

 

 

711,151 

 

 

489.0 

%

 

10,201,330 

 

 

6,095,612 

 

 

67.4 

%

Passenger revenue per RPM (Yield)

 

14.27 

¢

 

21.87 

¢

 

(34.8)

%

 

13.54 

¢

 

14.37 

¢

 

(5.8)

%

Passenger load factor (RPM/ASM)

 

75.9 

%

 

25.6 

%

 

50.3 

 pts.

 

68.6 

%

 

65.4 

%

 

3.2 

 pts.

Passenger revenue per ASM (PRASM)

 

10.84 

¢

 

5.59 

¢

 

93.9 

%

 

9.29 

¢

 

9.40 

¢

 

(1.2)

%

Total Operations (a) :

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passengers flown

 

2,066 

 

 

332 

 

 

522.3 

%

 

4,533 

 

 

2,877 

 

 

57.6 

%

Revenue passenger miles (RPM)

 

3,205,407 

 

 

185,788 

 

 

1,625.3 

%

 

7,056,854 

 

 

3,995,644 

 

 

76.6 

%

Available seat miles (ASM)

 

4,229,461 

 

 

718,405 

 

 

488.7 

%

 

10,298,035 

 

 

6,107,424 

 

 

68.6 

%

Operating revenue per ASM (RASM)

 

12.03 

¢

 

10.58 

¢

 

13.7 

%

 

10.70 

¢

 

11.38 

¢

 

(6.0)

%

Operating cost per ASM (CASM)

 

11.00 

¢

 

27.43 

¢

 

(59.9)

%

 

10.81 

¢

 

18.56 

¢

 

(41.8)

%

CASM excluding aircraft fuel and non-recurring items (b)

 

10.28 

¢

 

40.94 

¢

 

(74.9)

%

 

11.50 

¢

 

17.36 

¢

 

(33.8)

%

Aircraft fuel expense per ASM (c)

 

2.57 

¢

 

2.02 

¢

 

27.2 

%

 

2.33 

¢

 

2.22 

¢

 

5.0 

%

Revenue block hours operated

 

45,816 

 

 

12,388 

 

 

269.8 

%

 

112,061 

 

 

71,743 

 

 

56.2 

%

Gallons of jet fuel consumed

 

52,599 

 

 

13,394 

 

 

292.7 

%

 

126,987 

 

 

84,975 

 

 

49.4 

%

Average cost per gallon of jet fuel (actual) (c)

 

$

2.07 

 

 

$

1.09 

 

 

89.9 

%

 

$

1.89 

 

 

$

1.59 

 

 

18.9 

%

Economic fuel cost per gallon (c)(d)

 

$

2.07 

 

 

$

1.24 

 

 

66.9 

%

 

$

1.89 

 

 

$

1.68 

 

 

12.5 

%

 

(a)    Includes the operations of the Company's contract carrier under a capacity purchase agreement, which was indefinitely suspended in the first quarter of 2021 and terminated in the second quarter of 2021.

(b)    See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding aircraft fuel and non-recurring items.

(c)     Includes applicable taxes and fees.

(d)    See Table 3 for a reconciliation of GAAP fuel costs to economic fuel costs.

 

 

Table 3.

Hawaiian Holdings, Inc.

Economic Fuel Expense (unaudited)

 

The Company believes that economic fuel expense is a good 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 losses/(gains) realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period.

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

 

 

(in thousands, except per-gallon amounts)

Aircraft fuel expense, including taxes and delivery

 

$

108,785 

 

 

$

14,544 

 

 

648.0 

%

 

$

240,361 

 

 

$

135,025 

 

 

78.0 

%

Realized losses on settlement of fuel derivative contracts

 

— 

 

 

2,062 

 

 

(100.0)

%

 

165 

 

 

7,899 

 

 

(97.9)

%

Economic fuel expense

 

$

108,785 

 

 

$

16,606 

 

 

555.1 

%

 

$

240,526 

 

 

$

142,924 

 

 

68.3 

%

Fuel gallons consumed

 

52,599 

 

 

13,394 

 

 

292.7 

%

 

126,987 

 

 

84,975 

 

 

49.4 

%

Economic fuel costs per gallon

 

$

2.07 

 

 

$

1.24 

 

 

66.9 

%

 

$

1.89 

 

 

$

1.68 

 

 

12.5 

%

 

 

Table 4.

Hawaiian Holdings, Inc.

Non-GAAP Financial Reconciliation (unaudited)

 

The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including adjusted net income (loss), adjusted operating expenses, adjusted diluted net income per share (EPS), adjusted EBITDA, CASM, PRASM, RASM, Passenger Revenue per RPM, EBITDA, and pre-tax margin.  Pursuant to Regulation G, the Company has included reconciliations of reported non-GAAP financial measures to the most comparable financial measures reported on a GAAP basis.  The adjustments are described below:

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company believes that adjusting for the impact of an effective tax rate differential, the recognition of grant proceeds, changes in fair value of fuel and foreign currency derivative contracts, fluctuations in exchange rates on debt instruments denominated in foreign currency, special items and the loss recognized on the extinguishment of debt helps investors better analyze the Company's operational performance and compare its results to other airlines in the periods presented.

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

Total

 

Diluted Net Loss Per Share

 

Total

 

Diluted Net Loss Per Share

 

Total

 

Diluted Net Loss Per Share

 

Total

 

Diluted Net Loss Per Share

 

 

(in thousands, except per share data)

Net Income (Loss), as reported

 

$

14,669 

 

 

$

0.28 

 

 

$

(97,099)

 

 

$

(2.11)

 

 

$

(52,199)

 

 

$

(1.03)

 

 

$

(348,375)

 

 

$

(7.58)

 

Adjusted for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CARES Act carryback of additional NOLs

 

— 

 

 

— 

 

 

(6,143)

 

 

(0.13)

 

 

— 

 

 

— 

 

 

(29,537)

 

 

(0.64)

 

Government grant recognition

 

(78,256)

 

 

(1.51)

 

 

(129,088)

 

 

(2.81)

 

 

(320,645)

 

 

(6.33)

 

 

(240,648)

 

 

(5.23)

 

Loss on debt extinguishment

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

3,994 

 

 

0.08 

 

 

— 

 

 

— 

 

Changes in fair value of fuel derivative contracts

 

— 

 

 

— 

 

 

(1,765)

 

 

(0.04)

 

 

(382)

 

 

(0.01)

 

 

(966)

 

 

(0.02)

 

Unrealized (gains) losses on foreign debt

 

(1,945)

 

 

(0.04)

 

 

5,119 

 

 

0.11 

 

 

(20,896)

 

 

(0.41)

 

 

7,541 

 

 

0.16 

 

Unrealized (gains) losses on non-designated foreign exchange positions

 

— 

 

 

— 

 

 

623 

 

 

0.01 

 

 

(1,352)

 

 

(0.03)

 

 

423 

 

 

0.01 

 

Special items

 

— 

 

 

— 

 

 

17,489 

 

 

0.38 

 

 

8,983 

 

 

0.18 

 

 

178,407 

 

 

3.88 

 

Nonoperating special items

 

— 

 

 

— 

 

 

7,011 

 

 

0.15 

 

 

— 

 

 

— 

 

 

7,011 

 

 

0.15 

 

Tax effect of adjustments

 

16,842 

 

 

0.31 

 

 

31,189 

 

 

0.68 

 

 

69,363 

 

 

1.37 

 

 

48,017 

 

 

1.04 

 

Dilutive share impact

 

— 

 

 

0.01 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

Adjusted net loss

 

$

(48,690)

 

 

$

(0.95)

 

 

$

(172,664)

 

 

$

(3.76)

 

 

$

(313,134)

 

 

$

(6.18)

 

 

$

(378,127)

 

 

$

(8.23)

 

 

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

Total

 

Margin

 

Total

 

Margin

 

Total

 

Margin

 

Total

 

Margin

 

 

(in thousands, except margin data)

Income (Loss) Before Income Taxes, as reported

 

$

19,169 

 

 

3.8 

%

 

$

(143,584)

 

 

(189.0)

%

 

$

(65,949)

 

 

(6.0)

%

 

$

(471,293)

 

 

(67.8)

%

Adjusted for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government grant recognition

 

(78,256)

 

 

(15.4)

 

 

(129,088)

 

 

(169.9)

 

 

(320,645)

 

 

(29.1)

 

 

(240,648)

 

 

(34.6)

 

Loss on debt extinguishment

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

3,994 

 

 

0.4 

 

 

— 

 

 

— 

 

Changes in fair value of fuel derivative contracts

 

— 

 

 

— 

 

 

(1,765)

 

 

(2.3)

 

 

(382)

 

 

— 

 

 

(966)

 

 

(0.1)

 

Unrealized (gains) losses on foreign debt

 

(1,945)

 

 

(0.4)

 

 

5,119 

 

 

6.8 

 

 

(20,896)

 

 

(1.9)

 

 

7,541 

 

 

1.0 

 

Unrealized (gains) losses on non-designated foreign exchange positions

 

— 

 

 

— 

 

 

623 

 

 

0.8 

 

 

(1,352)

 

 

(0.1)

 

 

423 

 

 

0.1 

 

Special items

 

— 

 

 

— 

 

 

17,489 

 

 

23.0 

 

 

8,983 

 

 

0.8 

 

 

178,407 

 

 

25.7 

 

Nonoperating special items

 

— 

 

 

— 

 

 

7,011 

 

 

9.2 

 

 

— 

 

 

— 

 

 

7,011 

 

 

1.0 

 

Adjusted Loss Before Income Taxes

 

$

(61,032)

 

 

(12.0)

%

 

$

(244,195)

 

 

(321.4)

%

 

$

(396,247)

 

 

(36.0)

%

 

$

(519,525)

 

 

(74.7)

%

 

 

 

 

Operating Costs per Available Seat Mile (CASM)

The Company has separately listed in the table below its fuel costs per ASM and non-GAAP unit costs, excluding fuel and non-recurring items.  These amounts are included in CASM, but for internal purposes the Company consistently uses cost metrics that exclude fuel and non-recurring items (if applicable) to measure and monitor its costs.

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

(in thousands, except CASM data)

GAAP Operating Expenses

 

$

465,381 

 

 

$

197,055 

 

 

$

1,113,068 

 

 

$

1,133,263 

 

Adjusted for:

 

 

 

 

 

 

 

 

Government grant recognition

 

78,256 

 

 

129,088 

 

 

320,645 

 

 

240,648 

 

Special items

 

— 

 

 

(17,489)

 

 

(8,983)

 

 

(178,407)

 

Operating Expenses excluding non-recurring items

 

$

543,637 

 

 

$

308,654 

 

 

$

1,424,730 

 

 

$

1,195,504 

 

Aircraft fuel, including taxes and delivery

 

(108,785)

 

 

(14,544)

 

 

(240,361)

 

 

(135,025)

 

Operating Expenses excluding fuel and non-recurring items

 

$

434,852 

 

 

$

294,110 

 

 

$

1,184,369 

 

 

$

1,060,479 

 

Available Seat Miles

 

4,229,461 

 

 

718,405 

 

 

10,298,035 

 

 

6,107,424 

 

CASM - GAAP

 

11.00 

¢

 

27.43 

¢

 

10.81 

¢

 

18.56 

¢

Aircraft fuel, including taxes and delivery

 

(2.57)

 

 

(2.02)

 

 

(2.33)

 

 

(2.22)

 

Government grant recognition

 

1.85 

 

 

17.97 

 

 

3.11 

 

 

3.94 

 

Special items

 

— 

 

 

(2.44)

 

 

(0.09)

 

 

(2.92)

 

CASM excluding fuel and non-recurring items

 

10.28 

¢

 

40.94 

¢

 

11.50 

¢

 

17.36 

¢

 

Operating Expenses Excluding Fuel and Non-recurring Items Outlook

The Company excludes fuel and non-recurring items from its operating expense outlook for the same reasons as described above.

 

 

Estimated three months ending December 31, 2021

 

 

(in thousands)

GAAP operating expenses

 

$

570,952 

 

-

$

595,965 

 

Adjusted for:

 

 

 

 

Aircraft fuel, including taxes and delivery

 

124,555 

 

 

129,505 

 

Non-recurring items

 

— 

 

-

— 

 

Operating expenses, excluding fuel and non-recurring items

 

$

446,397 

 

-

$

466,460 

 

 

 

 

Adjusted EBITDA

The Company believes that adjusting earnings for interest, taxes, depreciation and amortization, non-recurring operating expenses (such as changes in unrealized gains and losses on financial instruments) and one-time charges helps investors better analyze the Company's financial performance by allowing for company-to-company and period-over-period comparisons that are unaffected by company-specific or one-time occurrences.

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

(in thousands)

Net Income (Loss)

 

$

14,669 

 

 

(97,099)

 

 

$

(52,199)

 

 

(348,375)

 

Income tax expense (benefit)

 

4,500 

 

 

(46,485)

 

 

(13,750)

 

 

(122,918)

 

Depreciation and amortization

 

33,899 

 

 

36,734 

 

 

104,368 

 

 

115,516 

 

Interest expense and amortization of debt discounts and issuance costs

 

29,897 

 

 

11,596 

 

 

83,905 

 

 

26,612 

 

EBITDA, as reported

 

82,965 

 

 

(95,254)

 

 

122,324 

 

 

(329,165)

 

Adjusted for:

 

 

 

 

 

 

 

 

Government grant recognition

 

(78,256)

 

 

(129,088)

 

 

(320,645)

 

 

(240,648)

 

Changes in fair value of fuel derivative instruments

 

— 

 

 

(1,765)

 

 

(382)

 

 

(966)

 

Unrealized gain on non-designated foreign exchange positions

 

— 

 

 

623 

 

 

(1,352)

 

 

423 

 

Unrealized (gains) losses on foreign debt

 

(1,945)

 

 

5,119 

 

 

(20,896)

 

 

7,541 

 

Special items

 

— 

 

 

17,489 

 

 

8,983 

 

 

178,407 

 

Nonoperating special items

 

— 

 

 

7,011 

 

 

— 

 

 

7,011 

 

Loss on extinguishment of debt

 

— 

 

 

— 

 

 

3,994 

 

 

— 

 

Adjusted EBITDA

 

$

2,764 

 

 

$

(195,865)

 

 

$

(207,974)

 

 

$

(377,397)