Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc. , reported its financial results for the third quarter of 2023.
“I am immensely proud of our team’s continued focus on moving our company forward, particularly in a quarter affected by the tragic wildfires in Maui,” said Hawaiian Airlines President and CEO Peter Ingram. “Underlying demand remains resilient, our brand and business model are core strengths and the major investments we are making now will create substantial value in 2024 and beyond.”
| Third Quarter 2023- Key Financial Metrics and Results | ||||||||
| GAAP | YoY Change | Adjusted (a) | YoY Change | |||||
| Net Loss | ($48.7M) | ($39.5M) | ($54.9M) | ($47.2M) | ||||
| Diluted EPS | ($0.94) | ($0.76) | ($1.06) | ($0.91) | ||||
| Pre-tax Margin | (8.3) % | (6.8) pts. | (9.5) % | (8.2) pts. | ||||
| EBITDA | ($3.2M) | ($49.9M) | ($11.7M) | ($59.6M) | ||||
| Operating Cost per ASM (CASM) |
15.14¢ | 0.9 % | 11.27¢ | 9.2 % | ||||
| Operating Revenue per ASM (RASM) |
14.08¢ | (5.7) % | N/A | N/A | ||||
| (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 September 30, 2023, the Company had:
- Unrestricted cash, cash equivalents and short-term investments of $1.13 billion
- $1.39 billion in liquidity, including its undrawn $235 million revolving credit facility
- Outstanding debt and finance lease obligations of $1.65 billion
Revenue Environment
The Company reported that third quarter revenue was trending positively in July, but the devastating wildfires in Lahaina in West Maui on August 8, 2023 caused a sharp decrease in traffic to Maui . With most areas of the island unaffected by the fires and portions of West Maui reopening to tourism on October 8, 2023 , demand for travel to Maui is recovering, but remains below historical levels. Hawaiian’s third quarter schedule was negatively impacted by the July 25, 2023 announcement from RTX, parent company of Pratt & Whitney, of anticipated accelerated removals and inspections of a significant portion of the PW1100G-JM engine fleet, which powers Hawaiian’s A321neo aircraft. This unanticipated time out of service resulted in, among other things, lower-than-expected capacity growth in the quarter.
Operating revenue was down 1.8% from the third quarter of 2022 on 4.1% higher capacity across Hawaiian’s network. Passenger traffic remained strong on Hawaiian’s Japan routes in the third quarter of 2023. International revenue increased 90.9% from the third quarter of 2022 on a 43.6% increase in capacity.
Maui Wildfires Relief
In the immediate aftermath of the tragic wildfires that devastated the town of Lahaina in West Maui , Hawaiian increased its schedule to evacuate more than 17,000 displaced visitors and residents within the first 72 hours and to transport vital supplies and first responders. Within the first week of the disaster, Hawaiian carried 54,000 tons of emergency supplies. Hawaiian and its HawaiianMiles members donated millions of miles to the American Red Cross of Hawai’i, providing the nonprofit with the equivalent of 18,000 free seats to carry volunteers and personnel to and from Maui . Hawaiian also donated $150,000 in cash to charities including the Hawai’i Foodbank, the Maui Food Bank and the Hawaii Community Foundation’s Maui Strong Fund. And as travel to Maui resumed, Hawaiian led the way with Travel Pono Maui, a video series sharing with visitors what they can expect traveling to Maui now.
Today Hawaiian continues to support ongoing relief efforts through its Malama Maui Desk, which was established to more efficiently help people and organizations seeking flight, cargo or other assistance in the aftermath of the wildfires. Hawaiian has received over 200 individual requests from Hawai’i and across its network to transport donated food and various goods to affected residents as well as passengers providing West Maui support services.
Third Quarter 2023 Highlights
Operations
- Commenced service of its A330-300F contract freighter business on October 2, 2023
Routes and Network
- Announced the resumption of service between Tokyo Haneda Airport, Japan and Kona, Hawai’i, starting on October 29, 2023
- Began ticket sales on September 6, 2023 for flights on the Boeing 787-9 Dreamliner, which is expected to enter service on select West Coast routes commencing on April 15, 2024
Guest Experience
- Designed new in-flight amenity kits in partnership with Noho Home , which are focused on sustainability and rooted in aloha, available starting November 6, 2023
Environmental, Social and Corporate Governance
- Endowed a scholarship for students studying Information Technology at the University of Hawai’i
Fourth Quarter 2023 Outlook
The table below summarizes the Company’s expectations for the quarter ending December 31, 2023 expressed as an expected percentage change compared to the results for the quarter ended December 31, 2022 . Figures include the impacts of the Company’s freighter operation, which are not yet material.
| Item | GAAP Fourth Quarter 2023 Guidance |
Non-GAAP Equivalent | Non-GAAP Fourth Quarter 2023 Guidance |
|||
| Available Seat Miles (ASMs) | Up 1.5% to up 4.5% | |||||
| Operating Revenue per ASM (RASM) |
Down 10.0% to down 13.0% |
|||||
| Costs per ASM (CASM) | Up 2.0% to up 4.1% | CASM excluding fuel and non-recurring items (a) |
Up 6.5% to up 9.5% | |||
| Gallons of Jet Fuel Consumed | Up 5.0% to up 8.0% | |||||
| Average fuel price per gallon, including taxes and delivery (b) |
$3.09 | Economic Fuel Price per Gallon (a)(b) |
$3.12 | |||
| Effective Tax Rate | ~21% |
Full Year 2023 Outlook
The table below summarizes the Company’s updated expectations for the full year ending December 31, 2023 expressed as an expected percentage change compared to the results for the year ended December 31, 2022 . Figures include the impacts of the Company’s freighter operation, which are not yet material.
| Item | Prior GAAP Full Year 2023 Guidance |
Updated GAAP Full Year 2023 Guidance |
Non-GAAP Equivalent |
Prior Non-GAAP Full Year 2023 Guidance |
Updated Non- GAAP Full Year 2023 Guidance |
|||||
| Available Seat Miles (ASMs) |
Up 8.0% to up 10.0% |
Up 7.5% to 8.5% | ||||||||
| Costs per ASM | Down 2.1% to down 3.5% |
Down 0.8% to down 1.9% |
CASM excluding fuel and non-recurring items (a) |
Up 3.0% to up 5.0% | Up 4.0% to up 5.5% | |||||
| Gallons of Jet Fuel Consumed |
Up 12.5% to up 14.5% |
Up 11.5% to up 13.0% |
||||||||
| Average fuel price per gallon, including taxes and delivery (b) |
$2.78 | $2.89 | Economic Fuel Price per Gallon (a)(b) |
$2.81 | $2.93 | |||||
| Capital Expenditures |
$265M to $295M |
No change |
| (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) Fuel Price per Gallon estimates are based on the October 13, 2023 fuel forward curve. |
Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.