Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc. reported its financial results for the first quarter of 2023.

“A big mahalo to our team who continue to make us a stronger, better airline. The demand for leisure travel remains strong in the domestic markets we serve, and we see similar conditions in most of our international markets,” said Hawaiian Airlines President and CEO Peter Ingram. “In recent days, our team completed a significant technology initiative, one of many projects underway in 2023 that position us for a bright future. We look forward to sustaining momentum on these initiatives and returning Hawaiian to profitability.”

First Quarter 2023- Key Financial Metrics and Results
		GAAP		YoY Change		Adjusted (a)		YoY Change
Net Loss		($98.3M)		+$35.0M		($111.8M)		+$18.5M
Diluted EPS		($1.91)		+$0.69		($2.17)		+$0.37
Pre-tax Margin		(20.5) %		+14.3 pts.		(23.0) %		+11.4 pts.
EBITDA		($70.3M)		+$37.2M		($85.4M)		+$20.1M
Operating Cost per ASM		14.85¢		0.19¢		11.04¢		(0.03)¢
Operating Revenue per ASM		12.46¢		1.27¢		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 March 31, 2023, the Company had:

• Unrestricted cash, cash equivalents and short-term investments of $1.4 billion
• $1.6 billion in liquidity, including its undrawn $235 million revolving credit facility
• Outstanding debt and finance lease obligations of $1.7 billion

Revenue Environment

Hawaiian benefited from continued robust leisure demand from North America to Hawaiʻi and the restoration of its international network excluding Japan. International traffic was buoyed by strong U.S. point of sale activity. Demand remained strong for premium products both domestically and internationally. The Company’s overall operating revenue for the first quarter 2023 was up 28.4% from the first quarter 2022 on 15.4% higher capacity as Hawaiian recovered from the effects of the Omicron variant of COVID-19, which impacted results in the first quarter 2022.  

Other revenue was down 12.4% compared to the first quarter of 2022 driven by a decrease in cargo revenue.

Operational Environment 

Several challenges continued to negatively affect the environment in which the Company operates.  Constraints on the availability of A321 aircraft due to Pratt & Whitney engine delays, ongoing runway construction at Daniel K. Inouye International Airport in Honolulu (HNL), and delays related to air traffic control protocols disrupted Hawaiian’s on-time performance, impaired its scheduling, and adversely affected its financial results.

Limitations on Hawaiian’s A321 fleet availability necessitated the substitution of A330 aircraft, which are less fuel efficient, on some A321 routes.  Fuel consumption for the first quarter 2023 was up 21.4% as compared to the first quarter of 2022 due to higher capacity and inefficiencies resulting from these challenges.

First Quarter 2023 Highlights

Technology Advancement 

• Transitioned its Passenger Service System to Amadeus’ Altea platform marking a significant information technology (“IT”) accomplishment for the Company in April; this new platform will enable the Company to be more commercially and operationally nimble

Routes and Network 

• Operated at 115% of its 2022 first quarter capacity, comprised of 98%, 119%, and 275% capacity on its North America, Neighbor Island and International routes, respectively
• Announced an increase in summer weekly frequencies between Honolulu and Austin, Boston, Las Vegas, and Pago Pago in preparation for strong summer demand to Hawai’i as well as a fourth daily flight between Honoluluand Los Angeles twice per week
• Announced resumption of service between Honolulu and Fukuoka beginning April 28 with thrice-weekly service

Guest Experience

• Streamlined the Honolulu travel experience with the opening of a new TSA security checkpoint at HNL, which added 1,000 square feet for passenger queuing and 3,000 square feet of screening area; expanded screening capacity alleviates congestion and benefits all guests whether they are flying to a neighbor island or boarding a transpacific flight

People

• Received ratification by Hawaiian’s pilots represented by the Air Line Pilots Association of a four-year contract that provides for pay scale increases across all fleet types, improved health benefits, a signing bonus, and cost sharing, and enhancements to the postretirement and disability plans for more than 1,000 employees
• Formed a partnership with Embry-Riddle Aeronautical University’s Aviation Maintenance Technology SkillBridge program which provides an opportunity for veterans to bridge the transition into the civilian aviation and aerospace sector
• Established a $100,000 scholarship fund in partnership with Arizona State University’s W.P. Carey School of Business to encourage Hawai’i students to pursue careers in IT with the potential to build a career at Hawaiian

Environmental, Social and Corporate Governance

• Committed to new milestones on the path to net-zero greenhouse gas emissions by 2050; the Company’s decarbonization roadmap relies on several key drivers, including the use of sustainable aviation fuel (SAF), fleet modernization and new aircraft technologies, operational best practices to improve fuel efficiency, and advocacy for air traffic control system improvements
• Announced an agreement with biofuel company Gevo, Inc. to purchase 50 million gallons of SAF over five years with deliveries to Hawaiian’s gateway cities in California anticipated starting in 2029
• Published the No Kākou a Pau (“interconnectedness”) economic impact report which underscores the ways Hawaiian is connected to the economy of its home state including stimulating $10.2 billion in economic activity in Hawai’i and providing, directly or indirectly, for 53,500 jobs statewide in 2022

Second Quarter 2023 Outlook

The table below summarizes the Company’s expectations for the quarter ending June 30, 2023 expressed as an expected percentage change compared to the results for the quarter ended June 30, 2022.

Item		Second Quarter 2023 Guidance		GAAP Equivalent		GAAP Second Quarter 2023 Guidance
Available Seat Miles (ASMs)		Up 10.5% to up 13.5%
Operating Revenue per ASM (RASM)		Down 8.5% to down 11.5%
CASM excluding fuel and non-recurring items (a)		Flat to up 3%		Costs per ASM		Down 8.2% to down 10.2%
Gallons of Jet Fuel Consumed		Up 16.5% to up 19.5%
Economic Fuel Price per Gallon (a)(b)		$2.62		Average fuel price per gallon, including taxes and delivery
Effective Tax Rate		21.0 %

Full Year 2023 Outlook 

The table below summarizes the Company’s updated expectations for the full year ending December 31, 2023expressed as an expected percentage change compared to the results for the year ended December 31, 2022.

Item		Prior Full Year 2023 Guidance		Full Year 2023 Guidance
Gallons of Jet Fuel Consumed		Up 10.5% to up 13.5%		Up 12.5% to up 15.5%
Economic Fuel Price per Gallon (a)(b)		$2.92		$2.70

(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 April 11, 2023 fuel forward curve.

Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.

Top Copyright Photo: Hawaiian Airlines Airbus A321-271N WL N204HA (msn 7959) LGB (Michael B. Ing). Image: 942740.

Hawaiian Airlines aircraft photo gallery: