Hawaiian Airlines said it plans to report lower-than-expected passenger revenue on its domestic routes for the second quarter.
But competition that cut into its mainland-Hawaii business during the period is expected to ebb in the third quarter, according to the Hawaii Tourism Authority.
The state’s largest carrier, which is due to report earnings later this month, said Wednesday that its operating revenue for every seat transported one mile will be down 4 percent to 5 percent during the April-June quarter. In April Hawaiian said it expected operating revenue to be off 1 percent to 4 percent.
On the positive side, Hawaiian said its cost per available seat mile, excluding fuel, will improve. Its costs now will be flat to up 1 percent in the second quarter compared with its previous projection of costs rising 0.5 percent to 3.5 percent.
The airline, whose mainland flights are predominantly to and from the West region, has faced continued strong competition on its domestic routes.
The HTA projected at the end of March that nonstop air seats to Hawaii in the second quarter would be up 13.3 percent over the year-earlier period, including a 12.9 percent increase from the U.S. West.
However, the increase in competition is expected to slow in the third quarter with HTA forecasting domestic air seats to Hawaii to rise just 5 percent, including 4.7 percent from the U.S. West.
Despite the lower second-quarter domestic revenue forecast, Hawaiian’s systemwide passenger traffic rose 5.3 percent during the three-month period to 2.7 million passengers from 2.5 million. During June, its passenger total climbed 7.5 percent to 950,761 from 884,559.
Revenue passenger miles, or one paying passenger transported one mile, was up 5.8 percent in the quarter to 3.59 million from 3.40 million and during June increased 5.8 percent to 1.29 million from 1.22 million.
Available seat miles, or one seat transported one mile, rose 4.2 percent in the quarter to 4.44 million from 4.26 million and gained 4.5 percent in June to 1.54 million from 1.47 million.
Hawaiian’s load factor, or the percentage of seats filled, rose 1.2 percentage points in the quarter to 80.8 percent from 79.6 percent and in June rose 1.1 percentage points to 84.2 percent from 83.1 percent.
The airline also said it entered into a six-year lease for an A330-200 aircraft that will be delivered in summer 2016. Hawaiian said it has accelerated the planned retirement for some of its Boeing 767-300 aircraft and still expects low single-digit capacity growth through the end of the decade.