HONOLULU -- As expected, Hawaiian Airlines enjoyed a big month in July – a good thing, too, because the airline also got a big fuel bill. This July, fuels costs were more than 50 percent above last July, reducing profits in what is historically one of Hawaiian's best months.
Hawaiian generated $18.6 million in operating profits on revenue of $80.7 million in July. However, despite improving revenue by $10.1 million compared to $70.6 million in July 2003, operating income rose by only $1.7 million over the $16.9 million for the year prior.
“Travel to and within Hawaii remains strong and Hawaiian continues to be the airline of choice, which is terrific because fuel and other costs are rising,” said Joshua Gotbaum, Trustee of Hawaiian Airlines. “We will need to continue to provide the best in service and value, because travel declines and competition gets more intense in the fall.”
July's operating expenses increased by $8.4 million, or 16 percent, compared to last year, consisting primarily of $4 million in fuel and $2.4 million in wage and benefit costs.
While Hawaiian's year-over-year systemwide load factor remained flat at 88.3 percent, capacity in Available Seat Miles (ASMs) rose by 1.6 percent and – importantly – Revenue Per Available Seat Mile (RASM) improved by 13 percent. Cost Per Available Seat Mile (CASM) increased by 14 percent, but when adjusted for fuel, moved up 8 percent.
Hawaiian recorded net income of $10.1 million for July. This included an income tax provision of $7.2 million and represented a 36 percent decrease compared to the $15.7 million in net income for July 2003, which did not include a tax expense.
Hawaiian Maintains Strong Pace Year-to-Date
Hawaiian continues to maintain its year-over-year improvement with each passing month, having generated $54.0 million in operating profits on revenue of $457.6 million in 2004. For the same period in 2003, the company recorded $30.7 million in operating profits on revenue of $395.3 million.
Year-to-date operating expenses have risen by $39.0 million compared to 2003. Of this increase, $33.2 million consists of the federal government's $17.5 million one-time special credit for the Emergency Wartime Act in 2003, and added fuel costs of $15.7 million – or 28 percent – that Hawaiian assumed in the first seven months.
Notably, Hawaiian continues to successfully generate more revenue using its existing fleet, with RASM increasing by 16 percent for 2004. Although CASM has risen by 11 percent, when adjusted for fuel and the special credit, it has increased by just 2 percent.
Hawaiian's year-to-date net income stands at $25.6 million, including an income tax provision of $19.9 million. This compares to net income of $4.5 million for the year prior, which excludes the special credit.
The complete financial report for July is available online at HawaiianAir.com.
About Hawaiian Airlines
Hawaiian Airlines, the nation's number one on-time carrier, is recognized as one of the best airlines in America. Business travelers recently surveyed by Condé Nast Traveler rated Hawaiian Airlines as having the best in-flight service and meals of any U.S. carrier. In addition, Hawaiian is ranked as the nation's fifth best airline overall by Travel + Leisure, ahead of every other carrier flying to Hawaii.
Celebrating its 75th year of continuous service, Hawaiian Airlines is Hawaii's biggest and longest-serving airline, and the second largest provider of passenger air service between Hawaii and the mainland U.S. Hawaiian offers nonstop service to Hawaii from more mainland U.S. gateways than any other airline. Hawaiian also provides approximately 117 daily jet flights among the Hawaiian Islands, as well as service to Australia, American Samoa and Tahiti.
Hawaiian Airlines, Inc., is a subsidiary of Hawaiian Holdings, Inc. (AMEX and PCX: HA). Since the appointment of a bankruptcy trustee in May 2003, Hawaiian Holdings has had no involvement in the management of Hawaiian Airlines and has had limited access to information concerning the airline. Additional information is available at www.HawaiianAir.com.