Hawaiian Airlines’ strong year came to a screeching halt in the fourth quarter.
Corporate parent Hawaiian Holdings Inc. said Tuesday it lost $3.4 million, or 7 cents a share, last quarter as a weakening yen, excess capacity in some markets and an accounting charge depressed earnings.
Hawaiian posted earnings of $20.9 million, or 40 cents a share, in the year-earlier period.
The state’s oldest and largest carrier, which has been rapidly expanding over the last two-plus years, had posted profits in 14 of the prior 15 quarters.
Hawaiian ended the year with net income of $53.2 million, or $1.01 a share, compared with a loss of $2.6 million, or 5 cents a share, in 2011. The 2011 loss included a pretax lease termination charge of $70 million tied to the purchase of 15 Boeing 717-200 interisland aircraft that Hawaiian had been leasing.
"It’s frustrating to close out a decent year of financial performance with a dip in our results at year-end," Hawaiian President and CEO Mark Dunkerley said in an earnings conference call. "It has been a challenging quarter with a number of things working against us."
Dunkerley said the weakening yen reduced the airline’s dollar receipts from its Japan service by about $6 million when the currency was converted. He also said Hawaiian received $3 million less in revenue due to a lower fuel surcharge implemented by the Japanese government.
FOURTH-QUARTER LOSS
$3.4 million
YEAR-EARLIER NET
$20.9 million |
The accounting adjustment reflected the timing of revenue recognized for frequent-flier mileage credits sold to partners in prior periods. This adjustment resulted in a net decrease to pretax income of $7.3 million in the quarter, or 8 cents a share.
Excluding fuel-hedging activities, Hawaiian had adjusted income of $61,000, or nil per share. A consensus of analysts had estimated Hawaiian would earn 10 cents a share in the fourth quarter excluding fuel hedging. The $61,000 compared with adjusted net income of $16.3 million, or 31 cents a share, in the year-earlier quarter.
Revenue rose 13.6 percent to $493 million for the quarter and increased 18.9 percent to $1.96 billion for the year.
Several airlines added capacity between the mainland and Hawaii in the fourth quarter and drove down prices to the point where airlines were not covering their costs, Dunkerley said.
But he said the outlook for 2013 is brightening.
"While we are still seeing many of the same environmental conditions persisting into the first quarter, the outlook for the balance of 2013 is brightening," Dunkerley said.
