Hawaiian Holdings Reports Third Quarter 2006 Financial Results

     *  Third quarter net income of $7.8 million

     *  Operating revenue increased 3% to $230 million

     *  Unit operating costs (excluding fuel) down 0.4%

HONOLULU, Nov. 1 /PRNewswire-FirstCall/ -- Hawaiian Holdings, Inc. (Amex: HA; PCX) ("Holdings" or "the Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported consolidated net income for the three months ended September 30, 2006 of $7.8 million, or $0.16 per basic and diluted share, on total operating revenue of $229.8 million.

Mark Dunkerley, President and Chief Executive Officer, commented, "This quarter was our first full quarter facing the new competition in our Interisland market and a quarter in which there was also excess capacity in our Transpacific markets. Heavy promotional activity and discounting by our competitors have taken their toll but we are encouraged that, despite the intensity of this competition, Hawaiian had a profitable quarter. The high price of fuel has offset the significant start we have made in our efforts to cut our costs. The management of the company continues to take measures to pare back our costs and to sharpen our marketing and believes that we are positioned for long-term success in all of our key markets."

Mr. Dunkerley continued, "During the third quarter, the first of the aircraft we acquired earlier this year began service, and the remaining three planes are expected to enter service by the end of 2006. Encouragingly, at the end of September, fuel prices began to turn in our favor, which will provide some welcome relief if the current price levels hold."

Operating Results

GAAP Results

Hawaiian emerged from bankruptcy on June 2, 2005. Effective April 1, 2003, following Hawaiian's bankruptcy filing, through June 1, 2005, Holdings deconsolidated Hawaiian and accounted for its interest in Hawaiian using the cost method of accounting. As a result, the consolidated financial results of Holdings during that period do not include Hawaiian's financial results. Holdings generated no revenue from January 1, 2005 through June 1, 2005, and its operating expenses consisted primarily of professional fees related to Hawaiian's bankruptcy case and maintaining Holdings' status as a public company. Hawaiian's emergence from bankruptcy was accounted for as a business combination, the acquisition of Hawaiian by Holdings.

Consolidated/Combined Holdings and Hawaiian Results

Because Hawaiian's emergence from bankruptcy was accounted for as a business combination, the assets and liabilities of Hawaiian were adjusted to their fair values as of June 2, 2005, and the results of operations of Hawaiian are included in the Company's consolidated results from that date forward. In order to clarify some of the complex accounting resulting from Holdings' reacquisition of Hawaiian upon Hawaiian's emergence from bankruptcy and provide readers with a basis for comparison with the financial results of Hawaiian during its bankruptcy, the following discussion compares the consolidated financial results for the quarters ended September 30, 2006 and 2005, and the consolidated financial results to the combined financial results of Holdings and Hawaiian for the nine months ended September 30, 2006 and 2005. The combined financial results are not, however, defined within U.S. generally accepted accounting principles (GAAP) and therefore should not be considered in isolation or as a substitute for the equivalent measure defined by GAAP.

    The consolidated results of operations for the third quarter and the nine
months ended September 30, 2006 were affected by the application of purchase
accounting as follows:

                                     3 Months Ended          9 Months Ended
                                      September 30,           September 30,
                                    2006        2005        2006        2005
                                                  (in millions)

    Operating Revenue - Decrease
     in operating revenue:
      Passenger - Elimination
       of deferred revenue
       from sales of miles
       in frequent flyer
       program                     $(0.7)      $(4.2)      $(5.1)      $(6.2)

    Operating Expenses -
     Increase/(decrease) in
     operating expenses:
      Wages and benefits -
       elimination of
       unrecognized actuarial
       losses                         --        (2.3)         --        (3.0)
      Aircraft and other
       rent - amortization
       of favorable and
       unfavorable operating
       leases                        0.5         0.5         1.3         0.6
      Maintenance materials
       and repairs -
       amortization of
       favorable aircraft
       maintenance contracts         0.3         1.1         1.0         1.3
      Depreciation and
       amortization                  3.9         4.1        11.7         5.2
        Total net increase
         in operating expenses       4.7         3.4        14.0         4.1

    Operating Income - Decrease
     in operating income            (5.4)       (7.6)      (19.1)      (10.3)

    Nonoperating Income (Expense):
      Interest expense -
       amortization of debt
       discount due to
       recognizing certain debt
       at fair value                (0.2)       (0.2)       (0.5)       (0.3)
      Interest income -
       accretion due to
       recognizing aircraft
       maintenance and lease
       security deposits at
       fair value                    0.3         0.4         1.0         0.5
        Net increase in
         nonoperating income         0.1         0.2         0.5         0.2

    Net Change in Income (Loss)
     Before Income Taxes           $(5.3)      $(7.4)     $(18.6)     $(10.1)


The Company reported operating income of $12.7 million in the third quarter of 2006 compared to $17.9 million in third quarter of 2005. Third quarter 2006 operating revenue was $229.8 million, a 2.5% increase compared to operating revenue in the third quarter 2005. Passenger revenue represented approximately 91% of operating revenue in the third quarters of both 2006 and 2005. Passenger yield (passenger revenue per revenue passenger mile) in the third quarter of 2006 increased 5.4% to 12.00 cents from 11.38 cents in the third quarter 2005. Despite intense competition and industry capacity increases in Hawaiian's key markets, operating revenue per available seat mile (RASM) increased 1.6% to 11.18 cents in the third quarter of 2006 from 11.00 cents in the third quarter 2005.



    Hawaiian Holdings, Inc. and Hawaiian Airlines, Inc.
    Selected Statistical Data

                           3 Months Ended                 9 Months Ended
                            September 30,                  September 30,
                    2006(*)     2005(*)  Change     2006(*)    2005(**) Change

    Scheduled
     Operations:
      Revenue
       passenger
       miles
       (RPM) (a)     1,738.4     1,796.6  -3.2%      5,025.7     4,887.0  2.8%
      Available
       seat miles
       (ASM) (a)     2,017.7     1,998.2   1.0%      5,787.9     5,623.2  2.9%
      Passenger
       revenue
       per RPM   12.00 cents 11.38 cents   5.4%  11.95 cents 11.42 cents  4.6%
      Passenger
       load
       factor
       (RPM/ASM)       86.2%       89.9%  -4.1%        86.8%       86.9% -0.1%

    Total
     Operations:
      Operating
       Revenue
       per ASM
       (RASM)    11.18 cents 11.00 cents   1.6%  11.22 cents 10.65 cents  5.4%
      Operating
       Cost per
       ASM
       (CASM)    10.56 cents 10.12 cents   4.3%  10.93 cents 10.23 cents  6.8%
      CASM
       ex-fuel    7.40 cents  7.43 cents  -0.4%   7.86 cents  7.78 cents  1.0%
      Adjusted
       CASM
       ex-fuel
       (b)        7.17 cents  7.27 cents  -1.4%   7.62 cents  7.71 cents -1.2%

    (*)  Consolidated
    (**) Combined
    (a)  In millions.
    (b)  Adjusted for net effect of purchase accounting.


Total operating expenses for the third quarter increased 5.3% to $217.1 million and operating cost per available seat mile (CASM) increased 4.3% to 10.56 cents versus the same period a year ago. CASM excluding fuel and the non-cash adjustments related to purchase accounting declined 1.4% to 7.17 cents in the third quarter of 2006 versus 7.27 cents in the prior year's quarter.

Higher operating expenses were primarily the result of a $10.3 million, or 18.8%, increase in aircraft fuel costs to $65.1 million. Hawaiian's average cost per gallon of jet fuel rose 19% to $2.24 (including taxes, delivery and hedging gains) for the third quarter of 2006. Aircraft fuel represented 30.0% of operating expenses in the third quarter 2006 compared to 26.6% in the same quarter of 2005. Despite an increase in block hours operated for each of the 717 and 767 fleets, total fuel consumed declined by approximately one percent period-over-period in the third quarter of 2006 as a result of ongoing initiatives to improve fuel efficiency.

Maintenance, materials and repairs expense increased $3.6 million to $17.1 million primarily as a result of higher engine maintenance expenses incurred under power-by-the-hour (PBH) agreements and an increase in airframe overhaul activity for the 767 aircraft. The PBH increases are attributable to the inclusion of additional engines under PBH agreements, an overall increase in block hours operated and higher rates per hour.

The increases in operating expenses were partially offset by lower wages and benefits expenses in the quarter which declined by 5.6% to $52.2 million. The decline includes a favorable liability adjustment for workers' compensation insurance expenses. Effective January 1, 2006, the Company adopted SFAS No. 123(R) which resulted in the recognition of $1.3 million of share-based compensation expense for the third quarter of 2006.

Nonoperating income for the third quarter of 2006 totaled $0.6 million compared to nonoperating income of $4.8 million in the third quarter of 2005. Nonoperating income during the third quarter of 2005 included a $7.8 million mark-to-market gain in jet fuel forward contracts which did not qualify for hedge accounting prior to September 2005.

    Liquidity, Capital Resources and Fuel Hedging:

    *  As of September 30, 2006, the Company had unrestricted cash and cash
       equivalents of $162.5 million, and an additional $71.0 million in
       restricted cash.

    *  For the quarter ended September 30, 2006, net cash provided by
       operating activities was $10.9 million, compared to $13.0 million for
       the same period in 2005.

    *  As of October 24, 2006, Hawaiian had entered into jet fuel forward
       contracts to hedge approximately 39% of its fuel requirements for the
       fourth quarter of 2006, and 21% and 6%, respectively, for the first and
       second quarters of 2007.  The Company's current jet fuel hedge position
       is outlined in the table below:



                               Average Jet                     Percentage of
                              Fuel Contract                      Quarterly
                                  Price       Gallons Hedged    Consumption
                               per Gallon       (thousands)        Hedged

    Fourth Quarter 2006          $1.903           12,290            39%
    First Quarter 2007           $1.953            6,668            21%
    Second Quarter 2007          $1.982            2,058             6%



    Recent Events:

    *  Hawaiian and the International Association of Machinists (IAM)
       recently reached a ground breaking agreement providing the Company
       with new latitude for outsourcing reservations and certain back-office
       functions, including accounting, in exchange for providing the
       incumbent employees in these areas with protection from layoffs.

    *  Also in July, Hawaiian introduced the Hawaiian Airlines Activities
       Card, the only airline product of its kind in the Hawaii market.
       Complementing Hawaiian's established online vacation packaging product,
       the card allows consumers to pre-pay for leading Hawaii activities at a
       discount on Hawaiian's website.

    *  In August, Hawaiian Airlines and Harmony Airways jointly announced the
       launch of a code share agreement and interline electronic ticketing for
       their mutual customers, enhancing customer service and easing flight
       connections between Canada and Hawaii.

    *  In August, Travel + Leisure magazine once again recognized Hawaiian
       Airlines as their carrier of choice for travel to Hawaii as part of the
       magazine's 2006 World's Best Awards.  For the eighth consecutive year,
       readers of the magazine ranked Hawaiian highest among airlines serving
       the islands, based on cabin comfort, food, in-flight service, customer
       service, and value.

    *  In September, Hawaiian put into service the first of four recently
       acquired B767 aircraft and expanded its daily nonstop San Diego-Maui
       service from summer flights only to year-round service.  The remaining
       three aircraft are expected to enter service during the fourth quarter.

    *  Also in September, Hawaiian's onboard entertainment programs earned
       top honors in the category of "Best Entertainment for Main Screen" in
       the small fleet category (24 or fewer aircraft) at the 18th Annual
       Avion Awards.  Hawaiian was also named first runner-up for "Best
       Overall Inflight Entertainment" in the small fleet category.

    *  In early October, the U.S. Department of Transportation's monthly
       Consumer Air Travel Report for August ranked Hawaiian #1 for on-time
       performance for the 34th consecutive month.  Hawaiian was also ranked
       #1 for baggage handling and #3 for fewest complaints.

    

Investor Conference Call

Hawaiian Holdings' quarterly earnings conference call is scheduled to begin later today (Wednesday, November 1, 2006) 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

Hawaiian was the nation's number one carrier for on-time service, fewest flight cancellations and best baggage service reliability in 2005, according to reports by the U.S. Department of Transportation. Consumer travel surveys conducted by Conde Nast Traveler, Travel + Leisure, and Zagat all rank Hawaiian as the top domestic airline serving Hawaii.

Now in its 77th year of continuous service in Hawaii, Hawaiian is the state's biggest and longest-serving airline, and the second largest provider of passenger air service between Hawaii and the U.S. mainland. 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; PCX). 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 (including, without limitation, risks relating to increased competition, volatility of fuel prices, and the availability of sufficient aircraft), which risks 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.

    (Financial Tables Follow)



    Hawaiian Holdings, Inc.
    Consolidated Balance Sheets (in thousands)

                                               September 30,     December 31,
                                                   2006             2005
                                                (unaudited)
    ASSETS
    Current Assets:
      Cash and cash equivalents                    $162,487         $153,388
      Restricted cash                                71,021           53,420
      Accounts receivable, net of allowance
       for doubtful accounts of $500 and $912
       as of September 30, 2006 and
       December 31, 2005, respectively               35,729           35,278
      Spare parts and supplies, net                  14,623           14,578
      Deferred tax assets                            11,062            9,269
      Prepaid expenses and other                     26,881           21,673
        Total                                       321,803          287,606

    Property and equipment, less accumulated
     depreciation and amortization of $13,532
     and $5,751 as of September 30, 2006 and
     December 31, 2005, respectively                105,682           51,277

    Other Assets:
      Long-term prepayments and other                27,892           29,253
      Intangible assets, net of accumulated
       amortization of $31,815 and $13,936
       as of September 30, 2006 and
       December 31, 2005, respectively              173,327          191,205
      Goodwill                                      104,231          107,179
      Total Assets                                 $732,935         $666,520

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:
      Accounts payable                              $38,926          $39,089
      Air traffic liability                         207,806          162,638
      Other accrued liabilities                      38,631           62,969
      Current maturities of long-term debt
       and capital lease obligations                 14,848           13,064
        Total                                       300,211          277,760

    Long-Term Debt and Capital Lease Obligations    123,819           77,576
    Other Liabilities and Deferred Credits:
      Accumulated pension and other postretirement
       benefit obligations                          196,591          196,831
      Other liabilities and deferred credits         65,740           57,017
      Deferred income taxes                          11,062            9,269
        Total                                       273,393          263,117

    Commitments and Contingent Liabilities
    Shareholders' Equity:
      Special preferred stock                            --               --
      Common stock                                      466              453
      Capital in excess of par value                209,424          203,479
      Accumulated deficit                          (174,638)        (143,721)
      Accumulated other comprehensive income
       (loss):
        Income (loss) on hedge instruments              260          (12,144)
        Total                                        35,512           48,067
      Total Liabilities and Shareholders' Equity   $732,935         $666,520



    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,
                                2006(*)     2005(*)      2006(*)    2005(**)

    Operating Revenue:
      Passenger                $208,660    $204,537     $600,405    $268,417
      Cargo                       7,884       8,264       23,802      10,833
      Charter                     2,512       2,450        6,737       3,135
      Other                      10,713       8,835       30,821      11,623
        Total                   229,769     224,086      661,765     294,008

    Operating Expenses:
      Aircraft fuel,
       including taxes
       and oil                   65,096      54,811      181,274      71,580
      Wages and benefits         52,243      55,313      166,469      77,890
      Aircraft rent              27,268      26,349       81,790      35,211
      Maintenance materials
       and repairs               17,130      13,549       52,164      17,547
      Depreciation and
       amortization               7,156       7,006       20,881       9,015
      Other rentals and
       landing fees               6,393       6,290       18,458       8,183
      Sales commissions           2,238       1,912        6,321       2,470
      Other                      39,549      40,920      117,290      59,813
        Total                   217,073     206,150      644,647     281,709

    Operating Income             12,696      17,936       17,118      12,299

    Nonoperating Income
     (Expense):
      Interest and
       amortization of
       debt discounts and
       issuance costs            (3,886)     (5,004)     (12,354)     (6,107)
      Losses due to
       redemption, prepayment,
       extinguishment and
       modification of
       long-term debt            (1,030)         --      (32,134)         --
      Interest income             3,518       1,879        8,984       2,387
      Capitalized interest        1,344          --        2,603          --
      Other, net                    683       7,916       (5,069)     13,452
        Total                       629       4,791      (37,970)      9,732

    Income (Loss) Before
     Income Taxes                13,325      22,727      (20,852)     22,031
      Income tax expense          5,565      14,894       10,065      14,894

    Net Income (Loss)            $7,760      $7,833     $(30,917)     $7,137

    Net income (Loss) Per
     Common Stock Share:
      Basic                       $0.16       $0.17       $(0.66)      $0.19
      Diluted                     $0.16       $0.16       $(0.66)      $0.18

    Weighted Average Number of
     Common Stock Shares
     Outstanding:
      Basic                      47,171      44,898       47,141      37,019
      Diluted                    47,251      58,999       47,141      51,120

    (*)  Includes the consolidated results of operations of Hawaiian Holdings,
         Inc. and Hawaiian Airlines, Inc. for the entire period presented.
    (**) Includes the results of operations of Hawaiian Holdings, Inc. for
         the period January 1, 2005 through June 1, 2005, and the consolidated
         results of operations of Hawaiian Holdings, Inc. and Hawaiian
         Airlines, Inc. for the period June 2, 2005 through September 30,
         2005.



    Hawaiian Holdings, Inc. and Hawaiian Airlines, Inc.
    Statements of Operations (unaudited)

                                Three Months Ended        Nine Months Ended
                                   September 30,            September 30,
                                2006(*)     2005(*)      2006(*)    2005(**)

    Operating Revenue:
      Passenger                $208,660    $204,537     $600,405    $558,257
      Cargo                       7,884       8,264       23,802      22,602
      Charter                     2,512       2,450        6,737       9,050
      Other                      10,713       8,835       30,821      25,248
        Total                   229,769     224,086      661,765     615,157

    Operating Expenses:
      Aircraft fuel, including
       taxes and oil             65,096      54,811      181,274     141,367
      Wages and benefits         52,243      55,313      166,469     170,673
      Aircraft rent              27,268      26,349       81,790      79,080
      Maintenance materials
       and repairs               17,130      13,549       52,164      41,562
      Depreciation and
       amortization               7,156       7,006       20,881      12,783
      Other rentals and
       landing fees               6,393       6,290       18,458      17,820
      Sales commissions           2,238       1,912        6,321       5,047
      Other                      39,549      40,920      117,290     122,459
        Total                   217,073     206,150      644,647     590,791

    Operating Income             12,696      17,936       17,118      24,366

    Nonoperating Income
     (Expense):
      Reorganization items, net      --          --           --         887
      Interest and amortization
       of debt discount and
       issuance costs            (3,886)     (5,004)     (12,354)     (6,571)
      Losses due to redemption,
       prepayment,
       extinguishment and
       modification of
       long-term debt            (1,030)         --      (32,134)         --
      Interest income             3,518       1,879        8,984       2,387
      Capitalized interest        1,344          --        2,603          --
      Other, net                    683       7,916       (5,069)     16,826
        Total                       629       4,791      (37,970)     13,529

    Income (Loss) Before
     Income Taxes                13,325      22,727      (20,852)     37,895
      Income tax expense          5,565      14,894       10,065      33,466

    Net Income (Loss)            $7,760      $7,833     $(30,917)     $4,429

    (*)  Consolidated results of operations of Hawaiian Holdings, Inc. and
         Hawaiian Airlines, Inc.
    (**) Combined results of operations of Hawaiian Holdings, Inc. and
         Hawaiian Airlines, Inc.



    Hawaiian Holdings, Inc.
    Reconciliation of GAAP to Adjusted Historical Cost Financial Results
    (in millions, except for CASM data) (unaudited)

                                 3 Months Ended             9 Months Ended
                                  September 30,              September 30,
                              2006(*)      2005(*)       2006(*)     2005(**)

    GAAP operating expenses    $217.1       $206.2        $644.6       $281.8
      Hawaiian expenses -
       pre June 2, 2005 (a)        --           --            --        309.0
    Combined Holdings and
     Airlines operating
     expenses                   217.1        206.2         644.6        590.8
      Aircraft fuel,
       including
       taxes and oil             65.1         54.8         181.3        141.4
    Adjusted operating
     expenses                   152.0        151.4         463.3        449.4

    Add (subtract)
     effects of
     purchase accounting:
      Wages & benefits (b)         --          2.3            --          3.0
      Aircraft and other
       rental expense,
       net (c)                   (0.5)        (0.5)         (1.3)        (0.6)
      Maintenance materials
       and repairs (d)           (0.3)        (1.1)         (1.0)        (1.3)
      Depreciation and
       amortization (e)          (3.9)        (4.1)        (11.7)        (5.2)

    Adjusted Historical Cost
     operating expenses,
     ex-fuel                   $147.3       $148.0        $449.3       $445.3

    Available Seat Miles      2,054.7      2,037.1       5,895.7      5,777.9

    CASM                  10.56 cents  10.12 cents   10.93 cents  10.23 cents
      Less aircraft fuel        (3.17)       (2.69)        (3.08)       (2.45)
    CASM - ex-fuel         7.40         7.43          7.86         7.78
      Impact of purchase
       accounting
       adjustments              (0.23)       (0.17)        (0.24)       (0.07)
    CASM - Adjusted for
     historical cost,
     ex-fuel               7.17 cents   7.27 cents    7.62 cents   7.71 cents

    Footnotes:

    (*)  Consolidated
    (**) Combined

    (a) Effective April 1, 2003, the Company deconsolidated Hawaiian until
        the Company reacquired and reconsolidated Hawaiian on June 2, 2005.
        The reconsolidation of Hawaiian was accounted for as a business
        combination with Hawaiian's assets and liabilities being adjusted to
        their fair values as of June 2, 2005.  Hawaiian's results of
        operations for the period April 1, 2003 through June 1, 2005 were not
        included in Holdings' results of operations.

    (b) The Company recorded the accumulated pension and other postretirement
        benefit obligations of Hawaiian at their fair values as of June 2,
        2005, resulting in the elimination of actuarial losses and the related
        amortization of such losses as a component of pension expense.

    (c) The increase in aircraft and other rental expense is due to recording
        the Company's operating leases to their fair values as of June 2,
        2005.

    (d) The Company recorded an intangible asset for certain aircraft
        maintenance contracts with contractual rates less than current market
        rates for similar services at June 2, 2005.

    (e) Adjustment to reflect the impact on depreciation and amortization
        expense due to the amortization of intangible assets and certain
        property and equipment recorded to its fair value at June 2, 2005.

SOURCE Hawaiian Holdings, Inc.

CONTACT: Peter Ingram, CFO of Hawaiian Airlines, +1-808-835-3030,
peter.ingram@hawaiianair.com; or Investor Relations, Allyson Pooley of
Integrated Corporate Relations, +1-310-954-1100, apooley@icrinc.com, for
Hawaiian Holdings, Inc.; or Media, Keoni Wagner, VP Public Affairs of Hawaiian
Airlines, +1-808-838-6778, keoni.wagner@hawaiianair.com