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Storms, fuel hedging cut into Hawaiian Airlines’ earnings

  • KRYSTLE MARCELLUS
    Bianca Keohokapu of Hilo waits in line for customer service to try and get an earlier flight back home to Hilo at the Hawaiian Airlines Departures section of Honolulu International Airport in Honolulu on Thursday August 7, 2014.
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The parent of Hawaiian Airlines said Tuesday that earnings fell 12.4 percent in the third quarter primarily due to stormed-related cancellations and fuel-hedging losses.

Hawaiian Holdings Inc. posted net income of $35.6 million, or 56 cents a share, compared with $40.6 million, or 76 cents a share, in the year-earlier period.

But adjusted for unrealized fuel hedging gains or losses on the company’s outstanding positions, Hawaiian earned $49.5 million, or a third-quarter record 79 cents a share, compared with $36.9 million, or 69 cents a share, in the year-ago period. That beat analysts’ estimates by a penny a share.

“We are pleased with our 35 percent improvement in adjusted net income for the third quarter versus last year,” Hawaiian President and CEO Mark Dunkerley said. “Strong demand across each of our main geographies, the impact of several new routes maturing and a favorable cost environment combined in this last quarter to bolster our results.”

Revenue rose 6.7 percent to $639.5 million from $599.3 million.

Hawaiian said Hurricane Iselle, which was downgraded to a tropical storm just before hitting Hawaii island in August , and Hurricane Julio, which just missed striking the islands a few days later, resulted in 30 neighbor island flight cancellations and cost the carrier $5 million.

The airline also lost money due to its fuel hedging, a calculated bet against the future price of fuel that allows the company to lock in a price for the fuel it will need in the future. However, fuel prices dropped dramatically in the third quarter.

“We are pleased with our 35 percent improvement in adjusted net income for the third quarter versus last year,” Hawaiian President and CEO Mark Dunkerley said. “Strong demand across each of our main geographies, the impact of several new routes maturing and a favorable cost environment combined in this last quarter to bolster our results.”

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