HONOLULU, Jan. 30,
2024 /PRNewswire/ -- Hawaiian Holdings, Inc. (NASDAQ:
HA) (the "Company"), parent company of Hawaiian Airlines, Inc.
("Hawaiian"), today reported its financial results for the fourth
quarter and full year 2023.
"I am grateful to our team who accomplished an extraordinary
amount, including realizing foundational investments during a
challenging year," said Hawaiian Airlines President and CEO
Peter Ingram. "Demand is solid
across our networks, our brand remains strong in Japan as the market recovers, and we have seen
steady improvement in travel to Maui. We expect the
combination with Alaska will
create an even more competitive combined airline, positioning the
Hawaiian Airlines brand to flourish in the years ahead."
Fourth Quarter 2023
- Key Financial Metrics and Results
|
|
|
GAAP
|
|
YoY
Change
|
|
Adjusted
(a)
|
|
YoY
Change
|
Net
Loss
|
|
($101.2M)
|
|
($51.0M)
|
|
($122.7M)
|
|
($98.0M)
|
Diluted
EPS
|
|
($1.96)
|
|
($0.98)
|
|
($2.37)
|
|
($1.88)
|
Pre-tax
Margin
|
|
(19.0) %
|
|
(10.4) pts.
|
|
(22.9) %
|
|
(18.6) pts.
|
EBITDA
|
|
($71.8M)
|
|
($65.7M)
|
|
($98.1M)
|
|
($123.7M)
|
Operating Cost per
ASM
|
|
15.30¢
|
|
(0.16)¢
|
|
11.77¢
|
|
0.88¢
|
|
Full Year 2023 - Key
Financial Metrics and Results
|
|
|
GAAP
|
|
YoY
Change
|
|
Adjusted
(a)
|
|
YoY
Change
|
Net
Loss
|
|
($260.5M)
|
|
($20.4M)
|
|
($313.5M)
|
|
($103.1M)
|
Diluted
EPS
|
|
($5.05)
|
|
($0.38)
|
|
($6.08)
|
|
($2.00)
|
Pre-tax
Margin
|
|
(12.1) %
|
|
(1.0) pts.
|
|
(14.5) %
|
|
(4.5) pts.
|
EBITDA
|
|
($103.6M)
|
|
($41.8M)
|
|
($169.0M)
|
|
($138.0M)
|
Operating Cost per
ASM
|
|
14.90¢
|
|
(0.36)¢
|
|
11.29¢
|
|
0.51¢
|
|
(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 December 31, 2023 the Company had:
- Unrestricted cash, cash equivalents and short-term investments
of $908.5 million
- Outstanding debt and finance lease obligations of $1.7 billion
- Liquidity of $1.1 billion,
including an undrawn revolving credit facility of $235 million
Revenue Environment
Following the Maui wildfires,
Hawaiian saw a steady recovery of travel from North America to Maui. Non-Maui routes
and international markets ex-Japan
continued to perform and demand remained solid. In
international markets, strong U.S. and other point-of sale demand,
coupled with an increase in Japan-originating traffic, contributed to a
20.7% point increase in International passenger load factor
year-over-year. Premium products continued to demonstrate
strong performance for the fourth quarter and full year
2023.
The Company's overall operating revenue for the fourth quarter
2023 was down 8.5% compared to the fourth quarter of 2022 on
3.3% higher capacity. In addition to the impact from the
Maui wildfires, pandemic-related
spoilage and revenue from pent-up travel demand in 2022 drove the
year-over-year decline. The Company's overall operating
revenue for 2023 was up 2.8% from 2022 on 8.1% higher capacity.
Other Revenue for fourth quarter 2023 was down 15.9% compared to
the same period in 2022, primarily driven by a decrease in cargo
revenue. Cargo activity in 2022 was higher than normal due to
lingering pandemic-related effects. Full year 2023 Other
Revenue was down 16.2% compared to 2022, driven by decreases in
cargo revenue and contract services.
Fourth Quarter and Full Year 2023 Highlights
Routes and scheduled services
- Operated 108% of its 2022 capacity: 96%, 112%, and 172%
capacity on its North America,
Neighbor Island, and International routes, respectively
- Launched ticket sales for new daily nonstop service between
Salt Lake City and Honolulu, which will commence on May 15, 2024
- Announced expansion of service in Sacramento with four weekly flights to Līhuʻe,
Kauaʻi starting May 24, 2024 and
three weekly flights to Kona on the Island of Hawaiʻi starting
May 25, 2024
Awards and Recognition
- Ranked highest for economy travel customer satisfaction in
Consumer Reports' 2023 Airline Travel Buying Guide
- Named the best domestic airline in Travel + Leisure's
2023 "World's Best Awards" annual reader survey
- Rated as one of the top airlines in the U.S. by Condé Nast
Traveler readers for the 2023 Readers' Choice Awards
- Awarded best new business class in 2023 by TheDesignAir
for its new business class product, the Leihōkū Suites
Guest experience
- Received FAA approval of the Starlink system on the Airbus
A321neo, which is currently being installed on that fleet. Hawaiian
will be the first major airline to put this technology on-board,
and it is expected to be the fastest, most capable inflight
connectivity available worldwide, offered free to every guest
- Collaborated with Hawaiʻi lifestyle brand Noho Home to design
Hawaiian's new in-flight amenity kits and soft goods with a focus
on sustainability and rooted in aloha. Amenities are made with
responsibly sourced materials and offered to Business Class guests
on long-haul flights a la carte to minimize waste
Environmental, Social and Corporate Governance
In May 2023, the Company published
its 2023 Corporate Kuleana (Responsibility) Report, providing
progress on Environmental, Social and Governance (ESG) priorities,
which included a decarbonization roadmap with interim targets to
lower greenhouse gas emissions focused on replacing petroleum jet
fuel with sustainable aviation fuel (SAF); plans to decrease
life-cycle jet fuel emissions per revenue ton mile by 45% by 2035;
and efforts to replace 10% of conventional jet fuel with SAF by
2030. The report also highlights Hawaiian's employee
diversity, including the highest percentage of women pilots of any
major U.S. airline.
Other activities in 2023 include the following:
- Engaged over 1,500 volunteers who donated over 8,500 hours of
community service work for more than 200 organizations throughout
Hawaiʻi and other markets we serve
- Donated $109,500 through the
Hawaiian Airlines Foundation as a grant to Kāko'o 'Ōiwi, a
nonprofit organization dedicated to advancing the cultural,
spiritual and traditional practices of the Native Hawaiian
community. The grant funded the construction of a produce washing
and packing facility to serve small, family farms in the area
- Brought the Holoholo Challenge virtual race series to Kauaʻi
which raised almost $25,000 in
proceeds benefiting the National Tropical Botanical Garden's
McBryde Garden, a 259-acre
conservation and research area that is home to the world's largest
collection of native Hawaiian flora
- Provided wide-ranging support for the Maui Community, including direct gifts of
$50,000 each to the Hawaiʻi Foodbank,
Maui Food Bank, and Hawaiʻi Community Foundation's Maui Strong
Fund, and a donor-matching HawaiianMiles campaign for the American
Red Cross Hawaiʻi totaling approximately 140 million HawaiianMiles.
Additionally, Hawaiian assisted with the evacuation of displaced
residents and visitors and the transportation of first responders
to Maui, and also supported relief
efforts by carrying over 193,000 lbs. of essential cargo
The Company continues to focus on creating long-term value and
positively impacting the people, environment and communities it
serves. The Company will publish its fifth annual Corporate Kuleana
Report in the spring of 2024.
Merger Agreement
On December 3, 2023, Alaska Air
Group, Inc. and the Company announced that they have entered into a
definitive agreement under which Alaska Airlines will acquire
Hawaiian for $18.00 per share in
cash, for a transaction value of approximately $1.9 billion, inclusive of $0.9 billion of Hawaiian's net debt. The
combined company will unlock more destinations for consumers and
expand choice of critical air service options and access throughout
the Pacific region, Continental United States and globally.
The acquisition is conditioned on required regulatory approvals,
approval by the Company's shareholders, and other customary closing
conditions. It is expected to close in 12-18 months from the
announcement date.
First Quarter 2024 Outlook
The table below summarizes the Company's expectations for the
quarter ending March 31, 2024
expressed as an expected percentage change compared to the results
for the quarter ended March 31,
2023. Figures include the expected impacts of the Company's
freighter operation, which are not yet expected to be material.
Item
|
|
GAAP First
Quarter
2024 Guidance
|
|
Non-GAAP
Equivalent
|
|
Non-GAAP First
Quarter 2024
Guidance
|
Available Seat Miles
(ASMs)
|
|
Up 2.5% to up
5.5%
|
|
|
|
|
Operating Revenue
per ASM
(RASM)
|
|
Down 1.0% to up
2.0%
|
|
|
|
|
Costs per ASM
(CASM)
|
|
Up 5.0% to up
7.2%
|
|
CASM excluding fuel
and non-
recurring items (a)
|
|
Up 8.0% to up
11.0%
|
Gallons of Jet Fuel
Consumed (c)
|
|
Up 4.0% to up
7.0%
|
|
|
|
|
Average fuel price
per gallon,
including taxes and delivery (b)
|
|
$2.66
|
|
Economic Fuel Price
per Gallon
(a)(b)(c)
|
|
$2.71
|
Effective Tax
Rate
|
|
~21%
|
|
|
|
|
Full Year 2024 Outlook
The table below summarizes the Company's expectations for the
full year ending December 31, 2024 expressed as an expected
percentage change compared to the results for the year ended
December 31, 2023. Figures include the expected impacts
of the Company's freighter operation as the Company establishes its
freighter operation.
Item
|
|
GAAP Full Year
2024
Guidance
|
|
Non-GAAP
Equivalent
|
|
Non-GAAP Full
Year
2024 Guidance
|
ASMs
|
|
Up 6.0% to up
9.0%
|
|
|
|
|
CASM
|
|
Up 0.7% to up
3.0%
|
|
CASM excluding fuel
and non-
recurring items (a)
|
|
Flat to up
3.0%
|
Gallons of Jet Fuel
Consumed (c)
|
|
Up 4.0% to up
7.0%
|
|
|
|
|
Average fuel price
per gallon,
including taxes and delivery (b)
|
|
$2.55
|
|
Economic Fuel Price
per Gallon
(a)(b)(c)
|
|
$2.59
|
Capital
Expenditures
|
|
$500M to
$550M
|
|
|
|
|
|
(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) Average fuel price
per gallon and economic fuel price per gallon estimates are based
on the January 12, 2024 fuel forward curve.
|
(c) Gallons of jet fuel
consumed do not include fuel used in the freighter operation, as
those expenses are pass-through expenses not born by the
Company.
|
Statistical information, as well as a reconciliation of certain
non-GAAP financial measures, can be found in the accompanying
tables.
Investor Conference Call
The Company's quarterly and full year earnings conference call
is scheduled to begin today (January 30,
2024) at 4:30 p.m. Eastern
Time (USA). The
conference call will be broadcast live over the Internet. Investors
may listen to the live audio webcast on the investor relations
section of the Company's website at HawaiianAirlines.com.
For those who are not available for the live webcast, the call will
be archived and available for 90 days on the investor relations
section of the Company's website.
About Hawaiian Airlines
Now in its 95th year of continuous service, Hawaiian is
Hawaiʻi's largest and longest-serving airline. Hawaiian offers
approximately 150 daily flights within the Hawaiian Islands, and
nonstop flights between Hawaiʻi and 15 U.S. gateway cities – more
than any other airline – as well as service connecting Honolulu and American Samoa, Australia, the Cook
Islands, Japan,
New Zealand, South Korea and Tahiti.
Consumer surveys by Condé Nast Traveler and TripAdvisor have
placed Hawaiian among the top of all domestic airlines serving
Hawaiʻi. The carrier was named Hawaiʻi's best employer by Forbes in
2022 and has topped Travel + Leisure's World's Best list as
the No. 1 U.S. airline for the past two years. Hawaiian has also
led all U.S. carriers in on-time performance for 18 consecutive
years (2004-2021) as reported by the U.S. Department of
Transportation.
The airline is committed to connecting people with aloha
by offering complimentary meals for all guests on transpacific
routes and the convenience of no change fees on Main Cabin and
Premium Cabin seats. HawaiianMiles members also enjoy flexibility
with miles that never expire. As Hawai'i's hometown airline,
Hawaiian encourages guests to Travel Pono
and experience the islands safely and
respectfully.
Hawaiian Airlines, Inc. is a subsidiary of Hawaiian
Holdings, Inc. (NASDAQ: HA). Additional information is available
at HawaiianAirlines.com. Follow
Hawaiian's Twitter updates
(@HawaiianAir), become a fan on Facebook
(Hawaiian Airlines), and follow us on
Instagram (hawaiianairlines). For career
postings and updates, follow
Hawaiian's LinkedIn page.
For media inquiries, please visit Hawaiian
Airlines' online newsroom.
Forward-Looking Statements
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 positioning for the upcoming year; plans for additional
route service; expectations related to the merger with Alaska; expectations about the Starlink
systems to be installed on the A321 fleet and in-flight amenity
kits; expectations related to Hawaiian's freighter operation; the
Company's environmental commitments; the Company's outlook for the
first fiscal quarter and fiscal year 2024; 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.
The Company is subject to risks, uncertainties and assumptions
that could cause the Company's results to differ materially from
the results expressed or implied by such forward-looking
statements, including the risks, uncertainties and assumptions
discussed from time to time in the Company's 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.
Table
1.
|
Hawaiian
Holdings, Inc.
|
Consolidated
Statements of Operations
|
(in thousands,
except for per share data) (unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
|
|
(in thousands,
except per share data)
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
|
|
$
601,621
|
|
$
650,841
|
|
(7.6) %
|
|
$
2,460,005
|
|
$
2,335,440
|
|
5.3 %
|
Other
|
|
67,453
|
|
80,194
|
|
(15.9) %
|
|
256,279
|
|
305,827
|
|
(16.2) %
|
Total
|
|
669,074
|
|
731,035
|
|
(8.5) %
|
|
2,716,284
|
|
2,641,267
|
|
2.8 %
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages and
benefits
|
|
223,012
|
|
218,045
|
|
2.3 %
|
|
951,524
|
|
833,137
|
|
14.2 %
|
Aircraft fuel,
including taxes and delivery
|
|
202,059
|
|
213,204
|
|
(5.2) %
|
|
766,133
|
|
817,077
|
|
(6.2) %
|
Aircraft
rent
|
|
28,914
|
|
25,859
|
|
11.8 %
|
|
109,741
|
|
103,846
|
|
5.7 %
|
Maintenance materials
and repairs
|
|
75,296
|
|
65,219
|
|
15.5 %
|
|
244,296
|
|
236,153
|
|
3.4 %
|
Aircraft and passenger
servicing
|
|
44,815
|
|
42,060
|
|
6.6 %
|
|
176,698
|
|
152,550
|
|
15.8 %
|
Commissions and other
selling
|
|
30,808
|
|
32,076
|
|
(4.0) %
|
|
117,132
|
|
113,843
|
|
2.9 %
|
Depreciation and
amortization
|
|
32,840
|
|
33,735
|
|
(2.7) %
|
|
133,615
|
|
136,169
|
|
(1.9) %
|
Other rentals and
landing fees
|
|
44,797
|
|
37,122
|
|
20.7 %
|
|
171,371
|
|
147,143
|
|
16.5 %
|
Purchased
services
|
|
36,001
|
|
33,637
|
|
7.0 %
|
|
144,822
|
|
129,350
|
|
12.0 %
|
Special
items
|
|
10,561
|
|
12,500
|
|
(15.5) %
|
|
10,561
|
|
18,803
|
|
(43.8) %
|
Other
|
|
51,721
|
|
50,365
|
|
2.7 %
|
|
184,066
|
|
163,250
|
|
12.8 %
|
Total
|
|
780,824
|
|
763,822
|
|
2.2 %
|
|
3,009,959
|
|
2,851,321
|
|
5.6 %
|
Operating
Loss
|
|
(111,750)
|
|
(32,787)
|
|
240.8 %
|
|
(293,675)
|
|
(210,054)
|
|
39.8 %
|
Nonoperating Income
(Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
amortization of debt
discounts and issuance costs
|
|
(22,358)
|
|
(23,054)
|
|
|
|
(90,540)
|
|
(95,815)
|
|
|
Interest
income
|
|
13,543
|
|
11,858
|
|
|
|
57,231
|
|
32,141
|
|
|
Capitalized
interest
|
|
3,123
|
|
1,070
|
|
|
|
8,833
|
|
4,244
|
|
|
Other components of
net periodic benefit cost
|
|
(1,707)
|
|
1,252
|
|
|
|
(6,614)
|
|
5,065
|
|
|
Losses on fuel
derivatives
|
|
(6,992)
|
|
(1,978)
|
|
|
|
(12,619)
|
|
(3,041)
|
|
|
Loss on extinguishment
of debt
|
|
—
|
|
—
|
|
|
|
—
|
|
(8,568)
|
|
|
Gains (losses) on
investments, net
|
|
6,304
|
|
(4,563)
|
|
|
|
(602)
|
|
(43,082)
|
|
|
Gains (losses) on
foreign debt
|
|
(7,245)
|
|
(15,629)
|
|
|
|
11,500
|
|
26,667
|
|
|
Other, net
|
|
100
|
|
913
|
|
|
|
(1,308)
|
|
(1,406)
|
|
|
Total
|
|
(15,232)
|
|
(30,131)
|
|
|
|
(34,119)
|
|
(83,795)
|
|
|
Loss Before Income
Taxes
|
|
(126,982)
|
|
(62,918)
|
|
|
|
(327,794)
|
|
(293,849)
|
|
|
Income tax
benefit
|
|
(25,800)
|
|
(12,758)
|
|
|
|
(67,300)
|
|
(53,768)
|
|
|
Net
Loss
|
|
$ (101,182)
|
|
$
(50,160)
|
|
|
|
$ (260,494)
|
|
$ (240,081)
|
|
|
Net Loss Per Common
Stock Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(1.96)
|
|
$
(0.98)
|
|
|
|
$
(5.05)
|
|
$
(4.67)
|
|
|
Diluted
|
|
$
(1.96)
|
|
$
(0.98)
|
|
|
|
$
(5.05)
|
|
$
(4.67)
|
|
|
Weighted Average
Number of Common
Stock Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
51,655
|
|
51,413
|
|
|
|
51,596
|
|
51,361
|
|
|
Diluted
|
|
51,655
|
|
51,413
|
|
|
|
51,596
|
|
51,361
|
|
|
Table
2.
|
Hawaiian
Holdings, Inc.
|
Selected Statistical
Data
|
(in thousands,
except as otherwise indicated) (unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
|
|
(in thousands,
except as otherwise indicated)
|
Scheduled
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
flown
|
|
2,655
|
|
2,651
|
|
0.2 %
|
|
10,876
|
|
9,995
|
|
8.8 %
|
Revenue passenger
miles (RPM)
|
|
4,219,482
|
|
3,982,719
|
|
5.9 %
|
|
16,860,663
|
|
14,932,750
|
|
12.9 %
|
Available seat miles
(ASM)
|
|
5,100,896
|
|
4,931,687
|
|
3.4 %
|
|
20,196,230
|
|
18,636,466
|
|
8.4 %
|
Passenger revenue per
RPM (Yield)
|
|
14.26
¢
|
|
16.34
¢
|
|
(12.7) %
|
|
14.59 ¢
|
|
15.64 ¢
|
|
(6.7) %
|
Passenger load factor
(RPM/ASM)
|
|
82.7 %
|
|
80.8 %
|
|
1.9 pt.
|
|
83.5 %
|
|
80.1 %
|
|
3.4 pt.
|
Passenger revenue per
ASM (PRASM)
|
|
11.79 ¢
|
|
13.20
¢
|
|
(10.7) %
|
|
12.18 ¢
|
|
12.53 ¢
|
|
(2.8) %
|
Total
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
flown
|
|
2,656
|
|
2,655
|
|
— %
|
|
10,879
|
|
10,015
|
|
8.6 %
|
RPM
|
|
4,220,584
|
|
3,988,798
|
|
5.8 %
|
|
16,864,998
|
|
14,964,500
|
|
12.7 %
|
ASM
|
|
5,103,666
|
|
4,940,514
|
|
3.3 %
|
|
20,204,497
|
|
18,684,642
|
|
8.1 %
|
Passenger load factor
(RPM/ASM)
|
|
82.7 %
|
|
80.7 %
|
|
2.0 pt.
|
|
83.5 %
|
|
80.1 %
|
|
3.4 pt.
|
Operating revenue per
ASM (RASM)
|
|
13.11 ¢
|
|
14.80
¢
|
|
(11.4) %
|
|
13.44 ¢
|
|
14.14 ¢
|
|
(5.0) %
|
Operating cost per ASM
(CASM)
|
|
15.30
¢
|
|
15.46
¢
|
|
(1.0) %
|
|
14.90 ¢
|
|
15.26 ¢
|
|
(2.4) %
|
CASM excluding
aircraft fuel and non-recurring items (a)
|
|
11.77 ¢
|
|
10.89
¢
|
|
8.1 %
|
|
11.29 ¢
|
|
10.78 ¢
|
|
4.7 %
|
Aircraft fuel expense
per ASM (b)
|
|
3.96 ¢
|
|
4.32 ¢
|
|
(8.3) %
|
|
3.79 ¢
|
|
4.37 ¢
|
|
(13.3) %
|
Revenue block hours
operated
|
|
52,961
|
|
51,715
|
|
2.4 %
|
|
211,019
|
|
195,361
|
|
8.0 %
|
Gallons of jet fuel
consumed
|
|
68,756
|
|
64,485
|
|
6.6 %
|
|
268,491
|
|
239,231
|
|
12.2 %
|
Average cost per
gallon of jet fuel (actual) (b)
|
|
$ 2.94
|
|
$ 3.31
|
|
(11.2) %
|
|
$
2.85
|
|
$
3.42
|
|
(16.7) %
|
Economic fuel cost per
gallon (b)(c)
|
|
$ 2.98
|
|
$ 3.31
|
|
(10.0) %
|
|
$
2.89
|
|
$
3.42
|
|
(15.5) %
|
|
|
(a)
|
See Table 4 for a
reconciliation of CASM excluding aircraft fuel and non-recurring
items to its most directly comparable GAAP financial
measure.
|
(b)
|
Includes applicable
taxes and fees.
|
(c)
|
See Table 3 for a
reconciliation of economic fuel cost per gallon to its most
directly comparable GAAP financial measure.
|
Table 3.
Hawaiian Holdings, Inc.
Economic
Fuel Expense
(in thousands, except per-gallon amounts)
(unaudited)
The price and availability of aircraft fuel is volatile due to
global economic and geopolitical factors that we can neither
control nor accurately predict. The increase in aircraft fuel
expense is illustrated in the following table:
|
|
Three Months Ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
|
|
(in thousands,
except per-gallon amounts)
|
Aircraft fuel expense,
including taxes and delivery
|
|
$
202,059
|
|
$
213,204
|
|
(5.2) %
|
|
$
766,133
|
|
$
817,077
|
|
(6.2) %
|
Fuel gallons
consumed
|
|
68,756
|
|
64,485
|
|
6.6 %
|
|
268,491
|
|
239,231
|
|
12.2 %
|
Average fuel price per
gallon, including taxes and delivery
|
|
$
2.94
|
|
$
3.31
|
|
(11.2) %
|
|
$
2.85
|
|
$
3.42
|
|
(16.7) %
|
The Company believes that economic fuel expense is a good
measure of the effect of fuel prices on its business as it most
closely approximates the net cash outflow associated with the
purchase of fuel for its operations in a period. The Company
defines economic fuel expense as GAAP fuel expense plus
losses/(gains) realized through actual cash (receipts)/payments
received from or paid to hedge counterparties for fuel hedge
derivative contracts settled during the period.
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
|
|
(in thousands,
except per-gallon amounts)
|
Aircraft fuel expense,
including taxes and delivery
|
|
$
202,059
|
|
$
213,204
|
|
(5.2) %
|
|
$
766,133
|
|
$
817,077
|
|
(6.2) %
|
Realized losses on
settlement of fuel derivative instruments
|
|
2,749
|
|
401
|
|
585.5 %
|
|
10,923
|
|
401
|
|
2,623.9 %
|
Economic fuel
expense
|
|
$
204,808
|
|
$
213,605
|
|
(4.1) %
|
|
$
777,056
|
|
$
817,478
|
|
(4.9) %
|
Fuel gallons
consumed
|
|
68,756
|
|
64,485
|
|
6.6 %
|
|
268,491
|
|
239,231
|
|
12.2 %
|
Economic fuel costs per
gallon
|
|
$
2.98
|
|
$
3.31
|
|
(10.0) %
|
|
$
2.89
|
|
$
3.42
|
|
(15.5) %
|
|
|
Estimated three
months ending
March 31, 2024
|
|
Estimated twelve
months ending
December 31, 2024
|
|
|
(in thousands,
except per-gallon amounts)
|
Aircraft fuel expense,
including taxes and delivery
|
|
$
179,716
|
-
|
$
184,901
|
|
$
709,756
|
-
|
$
730,230
|
Realized (gains)/losses
on settlement of fuel
derivative contracts
|
|
2,775
|
-
|
2,775
|
|
11,100
|
-
|
11,100
|
Economic fuel
expense
|
|
$
182,491
|
|
$
187,676
|
|
$
720,856
|
|
$
741,330
|
Fuel gallons
consumed
|
|
67,447
|
-
|
69,393
|
|
278,051
|
-
|
286,072
|
Economic fuel costs per
gallon
|
|
$
2.71
|
-
|
$
2.71
|
|
$
2.59
|
-
|
$
2.59
|
Table 4.
Hawaiian Holdings, Inc.
Non-GAAP
Financial Measures Reconciliation (unaudited)
The Company evaluates its financial performance utilizing
various GAAP and non-GAAP financial measures, including adjusted
net income (loss), adjusted operating expenses, adjusted diluted
net income (loss) per share (EPS), CASM, Passenger Revenue per RPM,
adjusted EBITDA, and adjusted pre-tax margin. Pursuant to
Regulation G, the Company has included the following reconciliation
of reported non-GAAP financial measures to comparable financial
measures reported on a GAAP basis. The adjustments are
described below:
- CBA related expense.
- In February 2023, pilots
represented by the Air Line Pilots Association (ALPA) ratified a
new four-year CBA, which included, amongst other things, a signing
bonus, pay scale increases across all fleet types, improved health
benefits and cost sharing, and enhancements to the Company's
postretirement and disability plans. In connection with the
ratification, the Company recorded a signing bonus and vacation
liability true-up of $17.7 million
which were recorded in wages and benefits during the quarter ended
March 31, 2023.
- In February 2022, employees
represented by the IAM-M and IAM-C ratified a new CBA, which
included a one-time signing bonus of $2.1
million, which was recorded in wages and benefits during the
first quarter of 2022. During the second quarter of 2022, the
Company and the IAM completed a separation program under the CBA
and recognized a $2.6 million
one-time expense, which was recorded in wages and benefits.
- Employee retention credit (ERC). During the three months
ended December 31, 2023, the Company
received a $32.5 million employee
retention credit under the CARES Act, which was recorded in Wages
and benefits in the Consolidated Statements of Operations. In
addition, the Company received $1.8
million in interest income in connection with the ERC, which
was recorded in Interest income in the Consolidated Statements of
Operations.
- Contract termination amortization. In December 2022, the Company entered into a
Memorandum of Understanding (MOU) with one of its third-party
service providers to early terminate its Amended and Restated
Complete Fleet Services Agreement (Amended CFS) covering A330-200
aircraft. The Amended CFS was originally scheduled to run through
December 2027, but terminated in
April 2023. Upon execution of the
MOU, the Company recognized in fiscal year 2022 $12.5 million in termination fees. As of
December 31, 2022, the Company had
approximately $24.1 million in
deferred liabilities to be recognized into earnings over the
remaining contract term as contra-maintenance materials and repairs
expense. During the three and twelve months ended December 31, 2023, the Company recognized
approximately $0.0 million and
$24.1 million, respectively, in
amortization within Maintenance, materials and repairs in the
Consolidated Statements of Operations.
- Special items. The Company recorded the following as
special items:
- During the third quarter of 2022, the Company estimated the
fair value of our remaining ATR-42 and ATR-72 aircraft, which
resulted in the recognition of a $6.3
million impairment charge recorded as a Special item in the
Company's Consolidated Statements of Operations.
- During the fourth quarter of 2022, the Company entered into a
Memorandum of Understanding (MOU) with its third-party service
provider to early terminate its Amended and Restated Complete Fleet
Services (CFS) Agreement (Amended CFS). The Amended CFS was
originally scheduled to run through December
2027, but terminated in April
2023. In connection with the MOU, the Company agreed to pay
a total of $12.5 million in
termination fees, which was recognized at execution as a Special
item in the Company's Consolidated Statements of Operations.
- During the year ended December 31,
2023, the Company recorded $10.6
million in Special items related to expenses related to its
merger with Alaska Air Group, primarily consisting of legal,
advisory, and other fees.
- Loss (gain) on sale of aircraft. During the
second quarter of 2022, the Company sold three ATR-72 aircraft and
recognized a $2.6 million gain on the
transactions, which was recorded in Other operating expense in the
Company's Consolidated Statements of Operations.
- Gain on sale of commercial real estate. In
February 2023, the Company entered
into an agreement for the sale of its commercial real estate and
recognized a gain on sale of $10.2
million, which was recorded in Other operating expense in
the Consolidated Statements of Operations.
- Interest income on federal tax refund. In
March 2023, the Company received
$4.7 million in interest in
connection with a $66.8 million
federal tax refund received related to fiscal year 2018. The
interest was recorded in Interest income in the Consolidated
Statements of Operations. In December
2023, the Company received $1.8
million in interest income in connection with the ERC, which
was recorded in Interest income in the Consolidated Statements of
Operations.
- Changes in fair value of fuel derivative instruments.
Changes in fair value of fuel derivative contracts, net of tax, are
based on market prices for open contracts as of the end of the
reporting period, and include the unrealized amounts of fuel
derivatives (not designated as hedges) that will settle in future
periods and the reversal of prior period unrealized amounts.
- Loss on extinguishment of debt. During the second
quarter of 2022, the Company recognized a $8.6 million loss on the extinguishment of its
remaining outstanding Series 2020-1A and Series 2020-1B Equipment Notes. Loss on extinguishment of
debt is excluded to allow investors to better analyze our core
operational performance and more readily compare our results to
other airlines in the periods presented below.
- Unrealized loss (gain) on foreign debt. Unrealized loss
(gain) on foreign debt is based on fluctuation in exchange rates
and the measurement of foreign-denominated debt to our functional
currency.
- Unrealized loss (gain) on equity securities. Unrealized
losses on equity securities and gains on derivative instruments in
our investment portfolio are driven by changes in market prices and
currency fluctuations, which are recorded in Other nonoperating
expense in the consolidated statements of operations.
The Company believes that adjusting for the impact of employee
retention credits, changes in fair value of equity securities and
fuel derivative contracts, fluctuations in exchange rates on debt
instruments denominated in foreign currency, non-recurring expenses
and income/gains (including CBA-related, contract termination
amortization, special items, interest income on tax refund, gain or
loss on sale of aircraft, gain on sale of commercial real estate,
and loss on extinguishment of debt and the tax effect of such
adjustments helps investors better analyze the Company's
operational performance and compare its results to other airlines
in the periods presented.
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
Total
|
|
Diluted
Per Share
|
|
Total
|
|
Diluted
Per Share
|
|
Total
|
|
Diluted
Per Share
|
|
Total
|
|
Diluted
Per Share
|
|
|
(in thousands,
except per share data)
|
GAAP net loss, as
reported
|
|
$ (101,182)
|
|
$
(1.96)
|
|
$
(50,160)
|
|
$
(0.98)
|
|
$ (260,494)
|
|
$
(5.05)
|
|
$ (240,081)
|
|
$
(4.67)
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CBA related
expense
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17,727
|
|
0.34
|
|
4,678
|
|
0.09
|
Employee retention
credit
(ERC)
|
|
(32,516)
|
|
(0.63)
|
|
—
|
|
—
|
|
(32,516)
|
|
(0.63)
|
|
—
|
|
—
|
Contract
termination
amortization
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(24,085)
|
|
(0.47)
|
|
—
|
|
—
|
Special
items
|
|
10,561
|
|
0.21
|
|
12,500
|
|
0.24
|
|
10,561
|
|
0.21
|
|
18,803
|
|
0.37
|
Loss (gain) on sale
of
aircraft
|
|
—
|
|
—
|
|
—
|
|
—
|
|
392
|
|
0.01
|
|
(2,578)
|
|
(0.05)
|
Gain on sale of
commercial real estate
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,179)
|
|
(0.20)
|
|
—
|
|
—
|
Interest income on
federal
tax refund
|
|
(1,820)
|
|
(0.03)
|
|
—
|
|
—
|
|
(6,492)
|
|
(0.13)
|
|
—
|
|
—
|
Changes in fair value
of
fuel derivative instruments
|
|
4,243
|
|
0.08
|
|
1,577
|
|
0.03
|
|
1,696
|
|
0.03
|
|
2,640
|
|
0.05
|
Loss on extinguishment
of
debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,568
|
|
0.17
|
Unrealized loss (gain)
on
foreign debt
|
|
7,123
|
|
0.14
|
|
15,501
|
|
0.30
|
|
(11,668)
|
|
(0.22)
|
|
(26,196)
|
|
(0.51)
|
Unrealized loss (gain)
on
equity securities
|
|
(13,904)
|
|
(0.27)
|
|
2,110
|
|
0.04
|
|
(10,755)
|
|
(0.21)
|
|
24,949
|
|
0.49
|
Tax effect of
adjustments
|
|
4,824
|
|
0.09
|
|
(6,211)
|
|
(0.12)
|
|
12,269
|
|
0.24
|
|
(1,242)
|
|
(0.02)
|
Adjusted Net
Loss
|
|
$ (122,671)
|
|
$
(2.37)
|
|
$
(24,683)
|
|
$
(0.49)
|
|
$ (313,544)
|
|
$
(6.08)
|
|
$ (210,459)
|
|
$
(4.08)
|
|
|
Three months
ended
December
31,
|
|
Twelve months
ended
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(in
thousands)
|
Income (Loss) Before
Income Taxes
|
|
$
(126,982)
|
|
$
(62,918)
|
|
$
(327,794)
|
|
$
(293,849)
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
CBA related
expense
|
|
—
|
|
—
|
|
17,727
|
|
4,678
|
Employee retention
credit (ERC)
|
|
(32,516)
|
|
—
|
|
(32,516)
|
|
—
|
Contract termination
amortization
|
|
—
|
|
—
|
|
(24,085)
|
|
—
|
Special
items
|
|
10,561
|
|
12,500
|
|
10,561
|
|
18,803
|
Loss (gain) on sale of
aircraft
|
|
—
|
|
—
|
|
392
|
|
(2,578)
|
Gain on sale of
commercial real estate
|
|
—
|
|
—
|
|
(10,179)
|
|
—
|
Interest income on
federal tax refund
|
|
(1,820)
|
|
—
|
|
(6,492)
|
|
—
|
Changes in fair value
of fuel derivative instruments
|
|
4,243
|
|
1,577
|
|
1,696
|
|
2,640
|
Loss on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
8,568
|
Unrealized loss (gain)
on foreign debt
|
|
7,123
|
|
15,501
|
|
(11,668)
|
|
(26,196)
|
Unrealized loss (gain)
on equity securities
|
|
(13,904)
|
|
2,110
|
|
(10,755)
|
|
24,949
|
Adjusted Loss Before
Income Taxes
|
|
$
(153,295)
|
|
$
(31,230)
|
|
$
(393,113)
|
|
$
(262,985)
|
Adjusted EBITDA
The Company believes that adjusting earnings for interest,
taxes, depreciation and amortization, non-recurring operating
expenses (such as changes in unrealized gains and losses on
financial instruments) and one-time charges helps investors better
analyze the Company's financial performance by allowing for
company-to-company and period-over-period comparisons that are
unaffected by company-specific or one-time occurrences.
|
|
Three months
ended
December
31,
|
|
Twelve months
ended
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(in
thousands)
|
Net Loss before
Taxes
|
|
$
(126,982)
|
|
$
(62,918)
|
|
$
(327,794)
|
|
$
(293,849)
|
Depreciation &
Amortization
|
|
32,840
|
|
33,735
|
|
133,615
|
|
136,169
|
Interest and
amortization of debt
|
|
22,358
|
|
23,054
|
|
90,540
|
|
95,815
|
EBITDA, as
reported
|
|
(71,784)
|
|
(6,129)
|
|
(103,639)
|
|
(61,865)
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
CBA related
expense
|
|
—
|
|
—
|
|
17,727
|
|
4,678
|
Employee retention
credit (ERC)
|
|
(32,516)
|
|
—
|
|
(32,516)
|
|
—
|
Contract termination
amortization
|
|
—
|
|
—
|
|
(24,085)
|
|
—
|
Special
items
|
|
10,561
|
|
12,500
|
|
10,561
|
|
18,803
|
Loss (gain) on sale of
aircraft
|
|
—
|
|
—
|
|
392
|
|
(2,578)
|
Gain on sale of
commercial real estate
|
|
—
|
|
—
|
|
(10,179)
|
|
—
|
Interest income on
federal tax refund
|
|
(1,820)
|
|
—
|
|
(6,492)
|
|
—
|
Changes in fair value
of fuel derivative contracts
|
|
4,243
|
|
1,577
|
|
1,696
|
|
2,640
|
Loss on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
8,568
|
Unrealized loss (gain)
on foreign debt
|
|
7,123
|
|
15,501
|
|
(11,668)
|
|
(26,196)
|
Unrealized loss (gain)
on investment securities
|
|
(13,904)
|
|
2,110
|
|
(10,755)
|
|
24,949
|
Adjusted
EBITDA
|
|
$
(98,097)
|
|
$
25,559
|
|
$
(168,958)
|
|
$
(31,001)
|
Operating Costs per Available Seat Mile (CASM)
The Company has separately listed in the table below its fuel
costs per ASM and non-GAAP unit costs, excluding fuel and
non-recurring items. These amounts are included in CASM, but
for internal purposes the Company consistently uses cost metrics
that exclude fuel and non-recurring items (if applicable) to
measure and monitor its costs.
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(in thousands,
except CASM data)
|
GAAP operating
expenses
|
|
$
780,824
|
|
$
763,822
|
|
$
3,009,959
|
|
$
2,851,321
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
CBA related
expense
|
|
—
|
|
—
|
|
(17,727)
|
|
(4,678)
|
Employee retention
credit (ERC)
|
|
32,516
|
|
—
|
|
32,516
|
|
—
|
Contract termination
amortization
|
|
—
|
|
—
|
|
24,085
|
|
—
|
Special
items
|
|
(10,561)
|
|
(12,500)
|
|
(10,561)
|
|
(18,803)
|
Gain (loss) on sale of
aircraft
|
|
—
|
|
—
|
|
(392)
|
|
2,578
|
Gain on sale of
commercial real estate
|
|
—
|
|
—
|
|
10,179
|
|
—
|
Operating Expenses
excluding non-recurring items
|
|
802,779
|
|
751,322
|
|
3,048,059
|
|
2,830,418
|
Aircraft fuel,
including taxes and delivery
|
|
(202,059)
|
|
(213,204)
|
|
(766,133)
|
|
(817,077)
|
Operating Expenses
excluding fuel and non-recurring items
|
|
$
600,720
|
|
$
538,118
|
|
$
2,281,926
|
|
$
2,013,341
|
Available Seat
Miles
|
|
5,103,666
|
|
4,940,514
|
|
20,204,497
|
|
18,684,642
|
CASM—GAAP
|
|
15.30 ¢
|
|
15.46 ¢
|
|
14.90 ¢
|
|
15.26 ¢
|
Aircraft fuel,
including taxes and delivery
|
|
(3.96)
|
|
(4.32)
|
|
(3.79)
|
|
(4.37)
|
CBA related
expense
|
|
—
|
|
—
|
|
(0.09)
|
|
(0.02)
|
Employee retention
credit (ERC)
|
|
0.64
|
|
—
|
|
0.15
|
|
—
|
Contract termination
amortization
|
|
—
|
|
—
|
|
0.12
|
|
—
|
Special
items
|
|
(0.21)
|
|
(0.25)
|
|
(0.05)
|
|
(0.10)
|
Gain (loss) on sale of
aircraft
|
|
—
|
|
—
|
|
—
|
|
0.01
|
Gain on sale of
commercial real estate
|
|
—
|
|
—
|
|
0.05
|
|
—
|
CASM excluding fuel and
non-recurring items
|
|
11.77 ¢
|
|
10.89 ¢
|
|
11.29 ¢
|
|
10.78 ¢
|
|
|
Estimated three
months ending
March 31, 2024
|
|
Estimated twelve
months ending
December 31, 2024
|
|
|
(in thousands,
except CASM data)
|
GAAP operating
expenses
|
|
$
785,786
|
-
|
$
825,746
|
|
$ 3,214,296
|
-
|
$ 3,377,846
|
Aircraft fuel,
including taxes and delivery
|
|
(179,716)
|
-
|
(184,901)
|
|
(709,756)
|
-
|
(730,230)
|
Non-recurring
items
|
|
(4,999)
|
|
(4,999)
|
|
(85,698)
|
|
(85,698)
|
Adjusted operating
expenses
|
|
$
601,071
|
-
|
$
635,846
|
|
$ 2,418,842
|
-
|
$ 2,561,918
|
Available seat
miles
|
|
5,040,454
|
-
|
5,187,980
|
|
21,416,766
|
-
|
22,022,901
|
CASM - GAAP
|
|
15.59 ¢
|
-
|
15.92 ¢
|
|
15.01 ¢
|
-
|
15.34 ¢
|
Aircraft fuel,
including taxes and delivery
|
|
(3.57)
|
-
|
(3.56)
|
|
(3.32)
|
-
|
(3.32)
|
Non-recurring
items
|
|
(0.10)
|
|
(0.10)
|
|
(0.40)
|
|
(0.39)
|
CASM excluding fuel and
non-recurring items
|
|
11.92 ¢
|
-
|
12.26 ¢
|
|
11.29 ¢
|
-
|
11.63 ¢
|
Pre-tax margin
The Company excludes unrealized (gains) losses from fuel
derivative instruments, foreign debt, and equity securities, gain
on the sale of aircraft, and non-recurring items from pre-tax
margin for the same reasons as described above.
|
|
Three months
ended
December
31,
|
|
Twelve months
ended
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Pre-Tax Margin, as
reported
|
|
(19.0) %
|
|
(8.6) %
|
|
(12.1) %
|
|
(11.1) %
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
CBA related
expense
|
|
—
|
|
—
|
|
0.6
|
|
0.2
|
Employee retention
credit
|
|
(4.9)
|
|
—
|
|
(1.2)
|
|
—
|
Contract termination
amortization
|
|
—
|
|
—
|
|
(0.9)
|
|
—
|
Special
items
|
|
1.6
|
|
1.7
|
|
0.4
|
|
0.7
|
Loss (gain) on sale of
aircraft
|
|
—
|
|
—
|
|
—
|
|
(0.1)
|
Gain on sale of
commercial real estate
|
|
—
|
|
—
|
|
(0.4)
|
|
—
|
Interest income on
federal tax refund
|
|
(0.3)
|
|
—
|
|
(0.2)
|
|
—
|
Changes in fair value
of fuel derivative contracts
|
|
0.6
|
|
0.2
|
|
0.1
|
|
0.1
|
Loss on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
0.3
|
Unrealized loss (gain)
on foreign debt
|
|
1.2
|
|
2.1
|
|
(0.4)
|
|
(1.0)
|
Unrealized loss (gain)
on equity securities
|
|
(2.1)
|
|
0.3
|
|
(0.4)
|
|
0.9
|
Adjusted Pre-Tax
Margin
|
|
(22.9) %
|
|
(4.3) %
|
|
(14.5) %
|
|
(10.0) %
|
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SOURCE Hawaiian Holdings, Inc.