Hawaiian Holdings Reports Second Quarter $50M Loss
By Sonia Isotov
Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc., yesterday reported net losses of $50 million for the three months ended June 30, 2011.
Company present and chief executive officer, Mark Dunkerley, commented in a written statement that “in the second quarter we shared the industry’s frustration of seeing the benefits of strong demand undone by the high cost of fuel. The silver lining to these results is that demand of our US domestic services remains healthy and the recovery in bookings from Japan continues to impress having returned to pre-earthquake levels.”
“A couple of weeks ago we inaugurated daily service between Honolulu and Osaka, our third new international route in the past eight months. These new routes solidify our position as the leading business in Hawaii tourism. We are working to control costs to mitigate the impact of higher oil prices while seeking opportunities to raise revenues further as the second half unfolds,” added Mr. Dunkerley, in the same statement.
In other financial results for the second quarter 2011, the Company reported an operating loss of $70.2 million, compared with operating income of $24.0 million in the prior year period. Second quarter 2011 operating revenue was $395.0 million, a 25.0% increase compared with the second quarter of 2010. Second quarter operating expenses were $465.2 million or a 59.4% increase compared with the second quarter of 2010.
Aircraft fuel costs in the second quarter increased 72.3% year-over-year to $135.5 million and represented 29.1% of operating expenses (34.3% of operating expenses excluding lease termination expense). Hawaiian’s average cost per gallon of jet fuel increased 45.9% year-over-year to $3.34 (including taxes and delivery).
The report of financial results for the second quarter also included the following other activities for that period:
- Launched daily nonstop service between Honolulu and Osaka, Japan to Kansai International Airport on July 12, 2011; its third new route to Asia in eight months.
- Purchased its existing fleet of 15 Boeing 717-200 aircraft through a refinancing transaction.
- Announced expansion of Hawaiian’s inter-island service between Honolulu and Kahului, Lihue, Hilo and Kona during peak travel periods through the addition of 3 Boeing 717-200 aircraft to the fleet in September, October and November 2011 through lease agreements.
- Added a fourth Airbus A330-200 aircraft to the fleet in April 2011.
- Increased capacity on Hawaiian’s daily non-stop route to Tokyo’s Haneda Airport with the transition from its 264-seat Boeing 767-300 aircraft to the 294-seat Airbus A330-200 aircraft in July 2011.
- Appointed Tom Wessner as Vice President of Strategic Procurement and Andrew Watterson as Vice President of Planning and Revenue Management. Shannon Okinaka was promoted to Vice President – Controller.