Low fuel prices and strong passenger demand helped Hawaiian Airlines overcome a revenue squeeze and achieve its highest second-quarter profit ever.

Hawaiian Holdings Inc., parent of the state’s largest carrier, said Tuesday that net income jumped 78.7 percent to a record $48.8 million even as competition remained fierce in the North America market, and the strong U.S. dollar and a significant reduction in most fuel surcharges cut into its international operations. The company said its adjusted net income of $37.5 million, or 61 cents a share, also was a record for the quarter. The adjusted net income excludes the unrealized amount of the company’s fuel hedges and the losses on the early payment of debt.

U.S. airlines have been reporting dramatic savings in fuel costs this quarter, and Hawaiian was no different. The company said its fuel costs — with hedging expenses factored in — were $47 million lower than the year-earlier period and that it expects to save $200 million in fuel this year from 2014. Fuel hedging, which is similar to buying insurance, reduces volatility by locking in a price to gain protection against future fuel price spikes.

Despite the record earnings, overall revenue slipped 0.8 percent to $571.3 million from $575.7 million. Passenger revenue fell 1.5 percent to $499.4 million as the company’s yield from travelers was 6.8 percent less per mile than in the second quarter of 2014. The airline, though, increased capacity by 4.2 percent and filled 80.8 percent of its seats, up 1.2 percentage points from 79.6 percent in the year-earlier period.

Hawaiian President and CEO Mark Dunkerley said on an earnings conference call that the airline faced head winds in all three aspects of its business last quarter.

“When we look at North America, there’s been a lot of capacity added that has the impact of reducing unit revenues,” he said. “On the international (side), the dominant impact has been the strengthening of the U.S. dollar and the loss of some fuel surcharges (primarily in Japan and South Korea) which are tied to the current price of fuel. And when we look at neighbor islands, we have acknowledged that we added a little too much capacity in the second quarter and were less successful than we had anticipated at filling some of the additional seats that we had in the market.”

Hawaiian said some of those pressures are expected to ease during the second half of this year after passenger revenue per available seat mile — a key airline metric — for its North America routes declined 7.2 percent in the second quarter from the year-earlier period.

“In the case of the North American routes, our results continued to be affected by industry capacity growth, which has been at double-digit levels for each of the past three quarters,” Hawaiian Chief Commercial Officer Peter Ingram said. “We continue to fine-tune our tactics to deal with the competitive environment, and we expect the continuation of sequential improvements in North America in the third quarter.”

North America capacity growth will begin to wane in the second half of the year, and published airline schedules reflect just a 6 percent increase in seats in the third quarter and 4 percent gain in the fourth quarter, Ingram said.

Ingram said Hawaiian primarily was responsible last quarter for adding seat capacity to the neighbor islands — particularly Kona and Hilo. That resulted in 6.5 percent more seats in the market and contributed to Hawaiian’s passenger revenue per available seat mile declining 5 percent from the year-earlier period.

“We recognize that we turned the capacity dial a bit too far in this period,” Ingram said. “Despite our strong competitive position in the neighbor island markets, we are always active in our efforts to optimally match supply with demand. With these efforts comes the possibility of missing the mark, and that’s what happened in the second quarter. We’ve already started to make adjustments, and we expect to see better results and sequential improvements in the back half of the year.”