Higher Costs, Increased Competition Cut Profits
HONOLULU -- Despite a $3 million increase in overall revenue, Hawaiian Airlines saw its operating profit in January drop by 38 percent compared to the year prior.
Hawaiian generated an operating profit of $3.7 million on revenue of $62.9 million for January 2005. In contrast, the company reported an operating profit of $6.0 million on revenue of $59.9 million for January 2004.
"The people of Hawaiian are doing a fantastic job serving our customers, but there's no denying that competition's getting tougher," said Trustee Joshua Gotbaum.
For January 2005, despite a slight improvement in total labor costs, Hawaiian's overall expenses increased 10 percent, or $5.3 million, to $59.2 million as compared to January 2004. Higher fuel costs were the biggest factor, jumping by 31 percent, or $2.9 million.
Hawaiian's Revenue Per Available Seat Mile (RASM) was essentially flat compared to January 2004, while its Cost Per Available Seat Mile (CASM) increased by five percent. When fuel expenses are excluded, CASM increased by one percent year-over-year.
Hawaiian reported net income of $588,000 for January, which represents an 82 percent reduction from the $3.3 million in net income the company recorded for January 2004.
Hawaiian's final results for January may vary depending on adjustments that may be necessary as a result of the 2004 year-end closing and audit process that is still underway. The company expects to publish final audited financial results for 2004 in March.
About Hawaiian Airlines
Hawaiian Airlines, the nation's number one on-time carrier, is recognized as one of the best airlines in America. Readers of two prominent national travel magazines, Condé Nast Traveler and Travel + Leisure, have both rated Hawaiian as the top domestic airline serving Hawaii in their most recent rankings, and the fifth best domestic airline overall.
Celebrating its 76th year of continuous service, Hawaiian is Hawaii'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. Hawaiian also provides approximately 100 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 responsibility for the management of Hawaiian Airlines and has had limited access to information concerning the airline. Additional information is available at www.HawaiianAir.com.