Source: Hawaiian Airlines
Hawaiian Holdings, Inc. (NASDAQ: HA) (the “Company”), the parent company of Hawaiian Airlines, Inc. (“Hawaiian”), today reported its financial results for the second quarter of 2022.
“Strong demand in our domestic markets has been joined by an encouraging recovery from our international gateways in the second quarter,” said Hawaiian Airlines President and CEO Peter Ingram. “As we move into the summer travel peak, every indication suggests a continuation of these positive trends. I am extremely proud of our team, who continue to deliver the industry’s best reliability and service as we pursue our mission to connect people with aloha.”
Second Quarter 2022
- The Company reported a GAAP net loss of $(36.8) million and an adjusted net loss of $(46.1) million.
- The Company reported GAAP EPS of $(0.72) and adjusted EPS of $(0.90).
- The Company reported EBITDA of $12.9 million, and adjusted EBITDA of $1.1 million.
Revenue Environment
The Company continued to enjoy strong demand throughout its domestic network and is seeing a solid recovery in its international network. The Company’s premium products performed exceptionally well during the quarter, with both business/first class revenue and Extra Comfort revenue exceeding 2019 levels. The Company’s overall operating revenue was down 2.9% from second quarter 2019 as its international network is still rebuilding.
Other revenue was up 26.6% compared to the second quarter of 2019 driven by a record quarter of cargo revenue and sales of HawaiianMiles.
Routes and Network
In April 2022 the Company announced it was resuming three-times-weekly nonstop service between Auckland, New Zealand and Honolulu, Hawai’i starting July 2, 2022, and a seasonal increase in frequency between Seoul, South Korea and Honolulu for the summer of 2022.
In May 2022 the Company announced its plan to resume service between Honolulu’s Daniel K. Inouye International Airport (HNL) and Tokyo Haneda Airport (HND) beginning August 1 . The Company also announced an increase in weekly flights between HNL and Narita Airport (NRT) and Osaka’s Kansai Airport (KIX) beginning in August.
During the second quarter of 2022, the Company operated at 87% of its 2019 second quarter system capacity, comprised of 115%, 80% and 31% capacity on its North America , Neighbor Island and International routes, respectively.
Liquidity and Capital Resources
As of June 30, 2022, the Company had:
- Unrestricted cash, cash equivalents and short-term investments of $1.5 billion
- $1.8 billion in liquidity, including its undrawn $235 million revolving credit facility
- Outstanding debt and finance lease obligations of $1.8 billion
- Air traffic liability of $784 million
Operational Excellence
The Company maintained its #1 national ranking for On-Time Performance for the 18th consecutive year in 2021, as reported in the U.S. Department of Transportation (DOT) Air Travel Consumer Report.
In July 2022, Travel + Leisure named Hawaiian Airlines Best Domestic Airline.
Environmental, Social and Corporate Governance
In May 2022 , the Company issued its 2022 Corporate Kuleana (Responsibility) Report, providing updates on Environmental, Social and Governance performance and priorities, including new commitments to replace single-use plastics in cabin service by 2029 and to locally source 40% of food and beverage for its Hawai’i-based catering operations by 2025.
In May 2022 , the Company announced a strategic partnership with REGENT to support the initial design of its next-generation 100-person capacity all-electric seaglider known as the Monarch.
In June 2022 , the Company announced a plan to jointly study the commercial viability of locally produced sustainable aviation fuels to replace all or a percentage of traditional fossil fuel-based jet fuel with fuel that is made with sustainable feedstocks.
In July 2022 , the Company appointed Wendy Beck and Craig Vosburg to its Board of Directors.
The Company expects its capacity for the quarter ending September 30, 2022 to be down approximately 5% to down 8% compared to the third quarter of 2019, mostly driven by the delay of the full restoration of its Japan network.
The Company expects its total revenue for the quarter ending September 30, 2022 to sequentially improve from the second quarter and be between down 3.5% to up 0.5% compared to the third quarter of 2019.
The Company expects its CASM excluding fuel and non-recurring items for the quarter ending September 30, 2022 to be consistent with the second quarter at up approximately 8% to 12% compared to the third quarter of 2019.
The Company’s outlook for adjusted EBITDA for the quarter ending September 30, 2022 is $15 million to $75 million .
The table below summarizes the Company’s expectations for the quarter ending September 30, 2022 expressed as an expected percentage change compared to the results for the quarter ended September 30, 2019 .
|
Item |
Third Quarter 2022 |
GAAP Equivalent |
GAAP Third Quarter |
|||
|
ASMs |
Down 5% to 8% |
|||||
|
Total Revenue |
Down 3.5% to up 0.5% |
|||||
|
Costs per ASM excluding fuel and non- |
Up 8% to 12% |
Costs per ASM (a) |
up 22% to 25% |
|||
|
Gallons of Jet Fuel Consumed |
Down 7% to 10% |
|||||
|
Fuel Price per Gallon (b) |
$3.50 |
|||||
|
Adjusted EBITDA (c) |
$15 million to $75 |
Net Income (c) |
|
(a) |
See Table 3 for a reconciliation of GAAP operating expenses to operating expenses excluding fuel and non-recurring items. |
|
(b) |
Fuel Price per Gallon estimates are based on the July 14, 2022 fuel forward curve. |
|
(c) |
The Company is not providing a reconciliation of adjusted EBITDA to GAAP net income, the most directly comparable GAAP measure, as it is unable, without unreasonable efforts, to calculate certain special and non-recurring charges, which could have a significant impact on the GAAP measure. |
Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.
The table below summarizes the Company’s expectations for the full year ending December 31, 2022 expressed as an expected percentage change compared to the results for the year ended December 31, 2019 . Costs per ASM excludes any adjustments for labor agreements that are currently amendable or become amendable in 2022.
|
Item |
Full Year 2022 |
GAAP Equivalent |
GAAP Full Year 2022 |
|||
|
ASMs |
Down 11% to 8% |
|||||
|
Costs per ASM excluding fuel and non- |
Up 12% to 15% |
Costs per ASM (a) |
Up 23% to 25.5% |
|||
|
Gallons of Jet Fuel Consumed |
Down 14% to 11% |
|||||
|
Fuel Price per Gallon (b) |
$3.36 |
|||||
|
Effective Tax Rate |
~19.5% |
|||||
|
Capital Expenditures |
$105 million to $125 |
|
(a) |
See Table under “Non-GAAP Reconciliation” for a reconciliation of GAAP costs per ASM to costs per ASM excluding fuel and non-recurring items. |
|
(b) |
Fuel Price per Gallon estimates are based on the July 14, 2022 fuel forward curve. |
Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to certain current and future events and financial performance. Such forward-looking statements include, without limitation, the Company’s ability, timing and progress in recovering from the impacts of COVID-19 pandemic; the continuation of recovery trends; future domestic and international demand for air travel; the Company’s future routes and network changes; the Company’s environmental commitments; the Company’s outlook for the quarter ending September 30, 2022 and twelve-months ending December 31, 2022 ; and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Words such as “expects,” “anticipates,” “projects,” “intends,” “plans,” “believes,” “estimates,” variations of such words, and similar expressions are also intended to identify such forward-looking statements. These forward-looking statements are and will be subject to many risks, uncertainties and assumptions relating to the Company’s operations and business environment, all of which may cause the Company’s actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. These risks and uncertainties include, without limitation, the continuing and developing effects of the spread of COVID-19 on the Company’s business operations and financial condition; the duration of government-mandated and other restrictions on travel; the full effect that restrictions on travel and other measures to limit the spread of COVID-19 will have on demand for air travel in the markets in which the Company operates; fluctuations and the extent of declining demand for air transportation in the markets in which the Company operates; the Company’s dependence on the tourism industry; the Company’s ability to generate sufficient cash and manage its available cash; the Company’s ability to accurately forecast economic volatility; macroeconomic developments; political developments; geopolitical conflict; the price and availability of aircraft fuel; labor negotiations; supply chain constraints; regulatory determinations and related developments; competitive pressures, including the impact of industry capacity between North America and Hawai’i and interisland; changes in the Company’s future capital needs; and foreign currency exchange rate fluctuations.
The risks, uncertainties and assumptions referred to above that could cause the Company’s results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company’s other public filings and public announcements, including the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available to the Company on the date hereof. The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.