Hawaiian Holdings Reports 2023 Fourth Quarter and Full Year Financial Results

HONOLULU  Hawaiian Holdings, Inc. (NASDAQ: HA) (the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported its financial results for the fourth quarter and full year 2023.

"I am grateful to our team who accomplished an extraordinary amount, including realizing foundational investments during a challenging year," said Hawaiian Airlines President and CEO Peter Ingram .  "Demand is solid across our networks, our brand remains strong in Japan as the market recovers, and we have seen steady improvement in travel to Maui.  We expect the combination with Alaska will create an even more competitive combined airline, positioning the Hawaiian Airlines brand to flourish in the years ahead."

Fourth Quarter 2023 - Key Financial Metrics and Results

   

GAAP

 

YoY Change

 

Adjusted (a)

 

YoY Change

Net Loss

 

($101.2M)

 

($51.0M)

 

($122.7M)

 

($98.0M)

Diluted EPS

 

($1.96)

 

($0.98)

 

($2.37)

 

($1.88)

Pre-tax Margin

 

(19.0) %

 

(10.4) pts.

 

(22.9) %

 

(18.6) pts.

EBITDA

 

($71.8M)

 

($65.7M)

 

($98.1M)

 

($123.7M)

Operating Cost per ASM

 

15.30¢

 

(0.16)¢

 

11.77¢

 

0.88¢

 

Full Year 2023 - Key Financial Metrics and Results

   

GAAP

 

YoY Change

 

Adjusted (a)

 

YoY Change

Net Loss

 

($260.5M)

 

($20.4M)

 

($313.5M)

 

($103.1M)

Diluted EPS

 

($5.05)

 

($0.38)

 

($6.08)

 

($2.00)

Pre-tax Margin

 

(12.1) %

 

(1.0) pts.

 

(14.5) %

 

(4.5) pts.

EBITDA

 

($103.6M)

 

($41.8M)

 

($169.0M)

 

($138.0M)

Operating Cost per ASM

 

14.90¢

 

(0.36)¢

 

11.29¢

 

0.51¢

 

(a) See Table 4 for a reconciliation of adjusted net loss, adjusted diluted EPS, adjusted pre-tax margin, adjusted EBITDA, and adjusted operating cost per ASM (CASM excluding fuel and non-recurring items) to each of their respective most directly comparable GAAP financial measure.

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

Liquidity and Capital Resources

As of December 31, 2023 the Company had:

Revenue Environment

Following the Maui wildfires, Hawaiian saw a steady recovery of travel from North America to Maui.  Non-Maui routes and international markets ex- Japan continued to perform and demand remained solid.  In international markets, strong U.S. and other point-of sale demand, coupled with an increase in Japan -originating traffic, contributed to a 20.7% point increase in International passenger load factor year-over-year.  Premium products continued to demonstrate strong performance for the fourth quarter and full year 2023.

The Company's overall operating revenue for the fourth quarter 2023 was down 8.5% compared to the fourth quarter of 2022 on 3.3% higher capacity.  In addition to the impact from the Maui wildfires, pandemic-related spoilage and revenue from pent-up travel demand in 2022 drove the year-over-year decline.  The Company's overall operating revenue for 2023 was up 2.8% from 2022 on 8.1% higher capacity.

Other Revenue for fourth quarter 2023 was down 15.9% compared to the same period in 2022, primarily driven by a decrease in cargo revenue.  Cargo activity in 2022 was higher than normal due to lingering pandemic-related effects.  Full year 2023 Other Revenue was down 16.2% compared to 2022, driven by decreases in cargo revenue and contract services.

Fourth Quarter and Full Year 2023 Highlights

Routes and scheduled services

 

Awards and Recognition

 

Guest experience

 

Environmental, Social and Corporate Governance

In May 2023 , the Company published its 2023 Corporate Kuleana (Responsibility) Report, providing progress on Environmental, Social and Governance (ESG) priorities, which included a decarbonization roadmap with interim targets to lower greenhouse gas emissions focused on replacing petroleum jet fuel with sustainable aviation fuel (SAF); plans to decrease life-cycle jet fuel emissions per revenue ton mile by 45% by 2035; and efforts to replace 10% of conventional jet fuel with SAF by 2030.  The report also highlights Hawaiian's employee diversity, including the highest percentage of women pilots of any major U.S. airline.

Other activities in 2023 include the following:

The Company continues to focus on creating long-term value and positively impacting the people, environment and communities it serves. The Company will publish its fifth annual Corporate Kuleana Report in the spring of 2024.

Merger Agreement

On December 3, 2023 , Alaska Air Group, Inc. and the Company announced that they have entered into a definitive agreement under which Alaska Airlines will acquire Hawaiian for $18.00 per share in cash, for a transaction value of approximately $1.9 billion , inclusive of $0.9 billion of Hawaiian's net debt.  The combined company will unlock more destinations for consumers and expand choice of critical air service options and access throughout the Pacific region, Continental United States and globally.  The acquisition is conditioned on required regulatory approvals, approval by the Company's shareholders, and other customary closing conditions.  It is expected to close in 12-18 months from the announcement date.

First Quarter 2024 Outlook

The table below summarizes the Company's expectations for the quarter ending March 31, 2024 expressed as an expected percentage change compared to the results for the quarter ended March 31 , 2023.  Figures include the expected impacts of the Company's freighter operation, which are not yet expected to be material.

Item

 

GAAP First Quarter
2024 Guidance

 

Non-GAAP Equivalent

 

Non-GAAP First
Quarter 2024
Guidance

Available Seat Miles (ASMs)

 

Up 2.5% to up 5.5%

       

Operating Revenue per ASM
(RASM)

 

Down 1.0% to up 2.0%

       

Costs per ASM (CASM)

 

Up 5.0% to up 7.2%

 

CASM excluding fuel and non-
recurring items (a)

 

Up 8.0% to up 11.0%

Gallons of Jet Fuel Consumed (c)

 

Up 4.0% to up 7.0%

       

Average fuel price per gallon,
including taxes and delivery (b)

 

$2.66

 

Economic Fuel Price per Gallon
(a)(b)(c)

 

$2.71

Effective Tax Rate

 

~21%

       

Full Year 2024 Outlook

The table below summarizes the Company's expectations for the full year ending December 31, 2024 expressed as an expected percentage change compared to the results for the year ended December 31, 2023.  Figures include the expected impacts of the Company's freighter operation as the Company establishes its freighter operation.

Item

 

GAAP Full Year 2024
Guidance

 

Non-GAAP Equivalent

 

Non-GAAP Full Year
2024 Guidance

ASMs

 

Up 6.0% to up 9.0%

       

CASM

 

Up 0.7% to up 3.0%

 

CASM excluding fuel and non-
recurring items (a)

 

Flat to up 3.0%

Gallons of Jet Fuel Consumed (c)

 

Up 4.0% to up 7.0%

       

Average fuel price per gallon,
including taxes and delivery (b)

 

$2.55

 

Economic Fuel Price per Gallon
(a)(b)(c)

 

$2.59

Capital Expenditures

 

$500M to $550M

       
 

(a) See Table 3 and Table 4 for a reconciliation of CASM excluding fuel and non-recurring items and economic fuel price per gallon to each of their respective most directly comparable GAAP financial measures.

(b) Average fuel price per gallon and economic fuel price per gallon estimates are based on the January 12, 2024 fuel forward curve.

(c) Gallons of jet fuel consumed do not include fuel used in the freighter operation, as those expenses are pass-through expenses not born by the Company.

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

Investor Conference Call

The Company's quarterly and full year earnings conference call is scheduled to begin today ( January 30, 2024 ) at 4:30 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 HawaiianAirlines.com . For those who are not available for the live webcast, the call will be archived and available for 90 days on the investor relations section of the Company's website.

About Hawaiian Airlines

Now in its 95th year of continuous service, Hawaiian is Hawaiʻi's largest and longest-serving airline. Hawaiian offers approximately 150 daily flights within the Hawaiian Islands, and nonstop flights between Hawaiʻi and 15 U.S. gateway cities – more than any other airline – as well as service connecting Honolulu and American Samoa , Australia , the Cook Islands , Japan , New Zealand , South Korea and Tahiti.

Consumer surveys by Condé Nast Traveler and TripAdvisor have placed Hawaiian among the top of all domestic airlines serving Hawaiʻi. The carrier was named Hawaiʻi's best employer by Forbes in 2022 and has topped Travel + Leisure's World's Best list as the No. 1 U.S. airline for the past two years. Hawaiian has also led all U.S. carriers in on-time performance for 18 consecutive years (2004-2021) as reported by the U.S. Department of Transportation.

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. As Hawai'i's hometown airline, Hawaiian encourages guests to Travel Pono and experience the islands safely and respectfully.

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 positioning for the upcoming year; plans for additional route service; expectations related to the merger with Alaska ; expectations about the Starlink systems to be installed on the A321 fleet and in-flight amenity kits; expectations related to Hawaiian's freighter operation; the Company's environmental commitments; the Company's outlook for the first fiscal quarter and fiscal year 2024; 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.

The Company is subject to risks, uncertainties and assumptions that could cause the Company's results to differ materially from the results expressed or implied by such forward-looking statements, including the risks, uncertainties and assumptions discussed from time to time in the Company's 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

(in thousands, except for per share data) (unaudited)

 
   

Three Months Ended December 31,

 

Twelve Months Ended December 31,

   

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

   

(in thousands, except per share data)

Operating Revenue:

                       

Passenger

 

$   601,621

 

$   650,841

 

(7.6) %

 

$  2,460,005

 

$  2,335,440

 

5.3 %

Other

 

67,453

 

80,194

 

(15.9) %

 

256,279

 

305,827

 

(16.2) %

Total

 

669,074

 

731,035

 

(8.5) %

 

2,716,284

 

2,641,267

 

2.8 %

Operating Expenses:

                       

Wages and benefits

 

223,012

 

218,045

 

2.3 %

 

951,524

 

833,137

 

14.2 %

Aircraft fuel, including taxes and delivery

 

202,059

 

213,204

 

(5.2) %

 

766,133

 

817,077

 

(6.2) %

Aircraft rent

 

28,914

 

25,859

 

11.8 %

 

109,741

 

103,846

 

5.7 %

Maintenance materials and repairs

 

75,296

 

65,219

 

15.5 %

 

244,296

 

236,153

 

3.4 %

Aircraft and passenger servicing

 

44,815

 

42,060

 

6.6 %

 

176,698

 

152,550

 

15.8 %

Commissions and other selling

 

30,808

 

32,076

 

(4.0) %

 

117,132

 

113,843

 

2.9 %

Depreciation and amortization

 

32,840

 

33,735

 

(2.7) %

 

133,615

 

136,169

 

(1.9) %

Other rentals and landing fees

 

44,797

 

37,122

 

20.7 %

 

171,371

 

147,143

 

16.5 %

Purchased services

 

36,001

 

33,637

 

7.0 %

 

144,822

 

129,350

 

12.0 %

Special items

 

10,561

 

12,500

 

(15.5) %

 

10,561

 

18,803

 

(43.8) %

Other

 

51,721

 

50,365

 

2.7 %

 

184,066

 

163,250

 

12.8 %

Total

 

780,824

 

763,822

 

2.2 %

 

3,009,959

 

2,851,321

 

5.6 %

Operating Loss

 

(111,750)

 

(32,787)

 

240.8 %

 

(293,675)

 

(210,054)

 

39.8 %

Nonoperating Income (Expense):

                       

Interest expense and amortization of debt
discounts and issuance costs

 

(22,358)

 

(23,054)

     

(90,540)

 

(95,815)

   

Interest income

 

13,543

 

11,858

     

57,231

 

32,141

   

Capitalized interest

 

3,123

 

1,070

     

8,833

 

4,244

   

Other components of net periodic benefit cost

 

(1,707)

 

1,252

     

(6,614)

 

5,065

   

Losses on fuel derivatives

 

(6,992)

 

(1,978)

     

(12,619)

 

(3,041)

   

Loss on extinguishment of debt

 

 

     

 

(8,568)

   

Gains (losses) on investments, net

 

6,304

 

(4,563)

     

(602)

 

(43,082)

   

Gains (losses) on foreign debt

 

(7,245)

 

(15,629)

     

11,500

 

26,667

   

Other, net

 

100

 

913

     

(1,308)

 

(1,406)

   

Total

 

(15,232)

 

(30,131)

     

(34,119)

 

(83,795)

   

Loss Before Income Taxes

 

(126,982)

 

(62,918)

     

(327,794)

 

(293,849)

   

Income tax benefit

 

(25,800)

 

(12,758)

     

(67,300)

 

(53,768)

   

Net Loss

 

$ (101,182)

 

$    (50,160)

     

$ (260,494)

 

$ (240,081)

   

Net Loss Per Common Stock Share:

                       

Basic

 

$        (1.96)

 

$        (0.98)

     

$        (5.05)

 

$        (4.67)

   

Diluted

 

$        (1.96)

 

$        (0.98)

     

$        (5.05)

 

$        (4.67)

   

Weighted Average Number of Common
Stock Shares Outstanding:

                       

Basic

 

51,655

 

51,413

     

51,596

 

51,361

   

Diluted

 

51,655

 

51,413

     

51,596

 

51,361

   

 

Table 2.

Hawaiian Holdings, Inc.

Selected Statistical Data

(in thousands, except as otherwise indicated) (unaudited)

 
   

Three Months Ended December 31,

 

Twelve Months Ended December 31,

   

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

   

(in thousands, except as otherwise indicated)

Scheduled Operations:

                       

Revenue passengers flown

 

2,655

 

2,651

 

0.2 %

 

10,876

 

9,995

 

8.8 %

Revenue passenger miles (RPM)

 

4,219,482

 

3,982,719

 

5.9 %

 

16,860,663

 

14,932,750

 

12.9 %

Available seat miles (ASM)

 

5,100,896

 

4,931,687

 

3.4 %

 

20,196,230

 

18,636,466

 

8.4 %

Passenger revenue per RPM (Yield)

 

14.26  ¢

 

16.34  ¢

 

(12.7) %

 

14.59  ¢

 

15.64  ¢

 

(6.7) %

Passenger load factor (RPM/ASM)

 

82.7 %

 

80.8 %

 

1.9     pt.

 

83.5 %

 

80.1 %

 

3.4     pt.

Passenger revenue per ASM (PRASM)

 

11.79   ¢

 

13.20  ¢

 

(10.7) %

 

12.18  ¢

 

12.53  ¢

 

(2.8) %

Total Operations:

                       

Revenue passengers flown

 

2,656

 

2,655

 

— %

 

10,879

 

10,015

 

8.6 %

RPM

 

4,220,584

 

3,988,798

 

5.8 %

 

16,864,998

 

14,964,500

 

12.7 %

ASM

 

5,103,666

 

4,940,514

 

3.3 %

 

20,204,497

 

18,684,642

 

8.1 %

Passenger load factor (RPM/ASM)

 

82.7 %

 

80.7 %

 

2.0     pt.

 

83.5 %

 

80.1 %

 

3.4     pt.

Operating revenue per ASM (RASM)

 

13.11   ¢

 

14.80  ¢

 

(11.4) %

 

13.44  ¢

 

14.14  ¢

 

(5.0) %

Operating cost per ASM (CASM)

 

15.30  ¢

 

15.46  ¢

 

(1.0) %

 

14.90  ¢

 

15.26  ¢

 

(2.4) %

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

 

11.77   ¢

 

10.89  ¢

 

8.1 %

 

11.29   ¢

 

10.78  ¢

 

4.7 %

Aircraft fuel expense per ASM (b)

 

3.96  ¢

 

4.32  ¢

 

(8.3) %

 

3.79  ¢

 

4.37  ¢

 

(13.3) %

Revenue block hours operated

 

52,961

 

51,715

 

2.4 %

 

211,019

 

195,361

 

8.0 %

Gallons of jet fuel consumed

 

68,756

 

64,485

 

6.6 %

 

268,491

 

239,231

 

12.2 %

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

 

$       2.94

 

$       3.31

 

(11.2) %

 

$            2.85

 

$          3.42

 

(16.7) %

Economic fuel cost per gallon (b)(c)

 

$       2.98

 

$       3.31

 

(10.0) %

 

$            2.89

 

$          3.42

 

(15.5) %

   

(a)

See Table 4 for a reconciliation of CASM excluding aircraft fuel and non-recurring items to its most directly comparable GAAP financial measure.

(b)

Includes applicable taxes and fees.

(c)

See Table 3 for a reconciliation of economic fuel cost per gallon to its most directly comparable GAAP financial measure.

Table 3.
Hawaiian Holdings, Inc.
Economic Fuel Expense
(in thousands, except per-gallon amounts) (unaudited)

The price and availability of aircraft fuel is volatile due to global economic and geopolitical factors that we can neither control nor accurately predict. The increase in aircraft fuel expense is illustrated in the following table:

   

Three Months Ended December 31,

 

Twelve months ended December 31,

   

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

   

(in thousands, except per-gallon amounts)

Aircraft fuel expense, including taxes and delivery

 

$  202,059

 

$  213,204

 

(5.2) %

 

$  766,133

 

$  817,077

 

(6.2) %

Fuel gallons consumed

 

68,756

 

64,485

 

6.6 %

 

268,491

 

239,231

 

12.2 %

Average fuel price per gallon, including taxes and delivery

 

$        2.94

 

$        3.31

 

(11.2) %

 

$        2.85

 

$        3.42

 

(16.7) %

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 December 31,

 

Twelve Months Ended December 31,

   

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

   

(in thousands, except per-gallon amounts)

Aircraft fuel expense, including taxes and delivery

 

$  202,059

 

$  213,204

 

(5.2) %

 

$  766,133

 

$  817,077

 

(6.2) %

Realized losses on settlement of fuel derivative instruments

 

2,749

 

401

 

585.5 %

 

10,923

 

401

 

2,623.9 %

Economic fuel expense

 

$  204,808

 

$  213,605

 

(4.1) %

 

$  777,056

 

$  817,478

 

(4.9) %

Fuel gallons consumed

 

68,756

 

64,485

 

6.6 %

 

268,491

 

239,231

 

12.2 %

Economic fuel costs per gallon

 

$        2.98

 

$        3.31

 

(10.0) %

 

$        2.89

 

$        3.42

 

(15.5) %

 

   

Estimated three months ending
March 31, 2024

 

Estimated twelve months ending
December 31, 2024

   

(in thousands, except per-gallon amounts)

Aircraft fuel expense, including taxes and delivery

 

$           179,716

-

$           184,901

 

$           709,756

-

$           730,230

Realized (gains)/losses on settlement of fuel
derivative contracts

 

2,775

-

2,775

 

11,100

-

11,100

Economic fuel expense

 

$           182,491

 

$           187,676

 

$           720,856

 

$           741,330

Fuel gallons consumed

 

67,447

-

69,393

 

278,051

-

286,072

Economic fuel costs per gallon

 

$                 2.71

-

$                 2.71

 

$                 2.59

-

$                 2.59

Table 4.
Hawaiian Holdings, Inc.
Non-GAAP Financial Measures 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 (loss) per share (EPS), CASM, Passenger Revenue per RPM, adjusted EBITDA, and adjusted pre-tax margin. Pursuant to Regulation G, the Company has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis.  The adjustments are described below:

The Company believes that adjusting for the impact of employee retention credits, changes in fair value of equity securities and fuel derivative contracts, fluctuations in exchange rates on debt instruments denominated in foreign currency, non-recurring expenses and income/gains (including CBA-related, contract termination amortization, special items, interest income on tax refund, gain or loss on sale of aircraft, gain on sale of commercial real estate, and loss on extinguishment of debt and the tax effect of such adjustments helps investors better analyze the Company's operational performance and compare its results to other airlines in the periods presented.

   

Three Months Ended December 31,

 

Twelve Months Ended December 31,

   

2023

 

2022

 

2023

 

2022

   

Total

 

Diluted
Per Share

 

Total

 

Diluted
Per Share

 

Total

 

Diluted
Per Share

 

Total

 

Diluted
Per Share

   

(in thousands, except per share data)

GAAP net loss, as reported

 

$ (101,182)

 

$    (1.96)

 

$   (50,160)

 

$    (0.98)

 

$ (260,494)

 

$    (5.05)

 

$ (240,081)

 

$    (4.67)

Adjusted for:

                               

CBA related expense

 

 

 

 

 

17,727

 

0.34

 

4,678

 

0.09

Employee retention credit
(ERC)

 

(32,516)

 

(0.63)

 

 

 

(32,516)

 

(0.63)

 

 

Contract termination
amortization

 

 

 

 

 

(24,085)

 

(0.47)

 

 

Special items

 

10,561

 

0.21

 

12,500

 

0.24

 

10,561

 

0.21

 

18,803

 

0.37

Loss (gain) on sale of
aircraft

 

 

 

 

 

392

 

0.01

 

(2,578)

 

(0.05)

Gain on sale of
commercial real estate

 

 

 

 

 

(10,179)

 

(0.20)

 

 

Interest income on federal
tax refund

 

(1,820)

 

(0.03)

 

 

 

(6,492)

 

(0.13)

 

 

Changes in fair value of
fuel derivative instruments

 

4,243

 

0.08

 

1,577

 

0.03

 

1,696

 

0.03

 

2,640

 

0.05

Loss on extinguishment of
debt

 

 

 

 

 

 

 

8,568

 

0.17

Unrealized loss (gain) on
foreign debt

 

7,123

 

0.14

 

15,501

 

0.30

 

(11,668)

 

(0.22)

 

(26,196)

 

(0.51)

Unrealized loss (gain) on
equity securities

 

(13,904)

 

(0.27)

 

2,110

 

0.04

 

(10,755)

 

(0.21)

 

24,949

 

0.49

Tax effect of adjustments

 

4,824

 

0.09

 

(6,211)

 

(0.12)

 

12,269

 

0.24

 

(1,242)

 

(0.02)

Adjusted Net Loss

 

$ (122,671)

 

$    (2.37)

 

$   (24,683)

 

$    (0.49)

 

$ (313,544)

 

$    (6.08)

 

$ (210,459)

 

$    (4.08)

 

   

Three months ended

December 31,

 

Twelve months ended

December 31,

   

2023

 

2022

 

2023

 

2022

   

(in thousands)

Income (Loss) Before Income Taxes

 

$          (126,982)

 

$            (62,918)

 

$          (327,794)

 

$          (293,849)

Adjusted for:

               

CBA related expense

 

 

 

17,727

 

4,678

Employee retention credit (ERC)

 

(32,516)

 

 

(32,516)

 

Contract termination amortization

 

 

 

(24,085)

 

Special items

 

10,561

 

12,500

 

10,561

 

18,803

Loss (gain) on sale of aircraft

 

 

 

392

 

(2,578)

Gain on sale of commercial real estate

 

 

 

(10,179)

 

Interest income on federal tax refund

 

(1,820)

 

 

(6,492)

 

Changes in fair value of fuel derivative instruments

 

4,243

 

1,577

 

1,696

 

2,640

Loss on extinguishment of debt

 

 

 

 

8,568

Unrealized loss (gain) on foreign debt

 

7,123

 

15,501

 

(11,668)

 

(26,196)

Unrealized loss (gain) on equity securities

 

(13,904)

 

2,110

 

(10,755)

 

24,949

Adjusted Loss Before Income Taxes

 

$          (153,295)

 

$            (31,230)

 

$          (393,113)

 

$          (262,985)

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

December 31,

 

Twelve months ended

December 31,

   

2023

 

2022

 

2023

 

2022

   

(in thousands)

Net Loss before Taxes

 

$          (126,982)

 

$            (62,918)

 

$          (327,794)

 

$          (293,849)

Depreciation & Amortization

 

32,840

 

33,735

 

133,615

 

136,169

Interest and amortization of debt

 

22,358

 

23,054

 

90,540

 

95,815

EBITDA, as reported

 

(71,784)

 

(6,129)

 

(103,639)

 

(61,865)

Adjusted for:

               

CBA related expense

 

 

 

17,727

 

4,678

Employee retention credit (ERC)

 

(32,516)

 

 

(32,516)

 

Contract termination amortization

 

 

 

(24,085)

 

Special items

 

10,561

 

12,500

 

10,561

 

18,803

Loss (gain) on sale of aircraft

 

 

 

392

 

(2,578)

Gain on sale of commercial real estate

 

 

 

(10,179)

 

Interest income on federal tax refund

 

(1,820)

 

 

(6,492)

 

Changes in fair value of fuel derivative contracts

 

4,243

 

1,577

 

1,696

 

2,640

Loss on extinguishment of debt

 

 

 

 

8,568

Unrealized loss (gain) on foreign debt

 

7,123

 

15,501

 

(11,668)

 

(26,196)

Unrealized loss (gain) on investment securities

 

(13,904)

 

2,110

 

(10,755)

 

24,949

Adjusted EBITDA

 

$            (98,097)

 

$              25,559

 

$          (168,958)

 

$            (31,001)

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

December 31,

 

Twelve Months Ended

December 31,

   

2023

 

2022

 

2023

 

2022

   

(in thousands, except CASM data)

GAAP operating expenses

 

$       780,824

 

$       763,822

 

$    3,009,959

 

$    2,851,321

Adjusted for:

               

CBA related expense

 

 

 

(17,727)

 

(4,678)

Employee retention credit (ERC)

 

32,516

 

 

32,516

 

Contract termination amortization

 

 

 

24,085

 

Special items

 

(10,561)

 

(12,500)

 

(10,561)

 

(18,803)

Gain (loss) on sale of aircraft

 

 

 

(392)

 

2,578

Gain on sale of commercial real estate

 

 

 

10,179

 

Operating Expenses excluding non-recurring items

 

802,779

 

751,322

 

3,048,059

 

2,830,418

Aircraft fuel, including taxes and delivery

 

(202,059)

 

(213,204)

 

(766,133)

 

(817,077)

Operating Expenses excluding fuel and non-recurring items

 

$       600,720

 

$       538,118

 

$    2,281,926

 

$    2,013,341

Available Seat Miles

 

5,103,666

 

4,940,514

 

20,204,497

 

18,684,642

CASM—GAAP

 

15.30 ¢

 

15.46 ¢

 

14.90 ¢

 

15.26 ¢

Aircraft fuel, including taxes and delivery

 

(3.96)

 

(4.32)

 

(3.79)

 

(4.37)

CBA related expense

 

 

 

(0.09)

 

(0.02)

Employee retention credit (ERC)

 

0.64

 

 

0.15

 

Contract termination amortization

 

 

 

0.12

 

Special items

 

(0.21)

 

(0.25)

 

(0.05)

 

(0.10)

Gain (loss) on sale of aircraft

 

 

 

 

0.01

Gain on sale of commercial real estate

 

 

 

0.05

 

CASM excluding fuel and non-recurring items

 

11.77 ¢

 

10.89 ¢

 

11.29 ¢

 

10.78 ¢

 

   

Estimated three months ending
March 31, 2024

 

Estimated twelve months ending
December 31, 2024

   

(in thousands, except CASM data)

GAAP operating expenses

 

$        785,786

-

$        825,746

 

$     3,214,296

-

$     3,377,846

Aircraft fuel, including taxes and delivery

 

(179,716)

-

(184,901)

 

(709,756)

-

(730,230)

Non-recurring items

 

(4,999)

 

(4,999)

 

(85,698)

 

(85,698)

Adjusted operating expenses

 

$        601,071

-

$        635,846

 

$     2,418,842

-

$     2,561,918

Available seat miles

 

5,040,454

-

5,187,980

 

21,416,766

-

22,022,901

CASM - GAAP

 

15.59 ¢

-

15.92 ¢

 

15.01 ¢

-

15.34 ¢

Aircraft fuel, including taxes and delivery

 

(3.57)

-

(3.56)

 

(3.32)

-

(3.32)

Non-recurring items

 

(0.10)

 

(0.10)

 

(0.40)

 

(0.39)

CASM excluding fuel and non-recurring items

 

11.92 ¢

-

12.26 ¢

 

11.29 ¢

-

11.63 ¢

Pre-tax margin

The Company excludes unrealized (gains) losses from fuel derivative instruments, foreign debt, and equity securities, gain on the sale of aircraft, and non-recurring items from pre-tax margin for the same reasons as described above.

   

Three months ended

December 31,

 

Twelve months ended

December 31,

   

2023

 

2022

 

2023

 

2022

Pre-Tax Margin, as reported

 

(19.0) %

 

(8.6) %

 

(12.1) %

 

(11.1) %

Adjusted for:

               

CBA related expense

 

 

 

0.6

 

0.2

Employee retention credit

 

(4.9)

 

 

(1.2)

 

Contract termination amortization

 

 

 

(0.9)

 

Special items

 

1.6

 

1.7

 

0.4

 

0.7

Loss (gain) on sale of aircraft

 

 

 

 

(0.1)

Gain on sale of commercial real estate

 

 

 

(0.4)

 

Interest income on federal tax refund

 

(0.3)

 

 

(0.2)

 

Changes in fair value of fuel derivative contracts

 

0.6

 

0.2

 

0.1

 

0.1

Loss on extinguishment of debt

 

 

 

 

0.3

Unrealized loss (gain) on foreign debt

 

1.2

 

2.1

 

(0.4)

 

(1.0)

Unrealized loss (gain) on equity securities

 

(2.1)

 

0.3

 

(0.4)

 

0.9

Adjusted Pre-Tax Margin

 

(22.9) %

 

(4.3) %

 

(14.5) %

 

(10.0) %

 

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SOURCE Hawaiian Holdings, Inc.