Hawaiian Airlines’ stock price has hit some turbulence over the past year, but the carrier’s earnings Tuesday suggested that its outlook could be stronger than Wall Street’s expectations.
Its parent company, Hawaiian Holdings Inc., posted net income in the first quarter of $36.4 million, or 75 cents a share. That was up 27.4% from $28.5 million, or 56 cents a share, in the year-earlier quarter. Its adjusted net income, which includes nonrecurring items, was 67 cents a share last quarter, 3 cents better than analysts’ consensus estimate.
Hawaiian’s revenue fell 1.3% to nearly $657 million.
Still, Hawaiian President and CEO Peter Ingram said in a statement that Hawaiian is off to a “solid start” in 2019.
“We made important progress against our 2019 priorities in the first quarter, advancing a host of initiatives that will bring lasting value to our guests, our team, and our shareholders,” Ingram said. “We look forward to the rest of 2019 and demonstrating, yet again, that Hawaiian is the carrier of choice to Hawaii.”
Hawaiian’s stock closed up 75 cents, or 2.5%, at $30.44 prior to releasing its results after the market closed. The price of the company’s stock has ranged from a closing high of $43.95 to a closing low of $24.49 over the past 52 weeks.
Hawaiian’s latest earnings come as the carrier fields additional challenges in 2019. Its competitor Southwest Airlines has made Hawaii the focus of its year, and there’s still competition from Alaska Airlines, which entered Hawaii’s trans-Pacific market in 2007.
But the grounding of the Boeing 737 Max 8 could slow Southwest Airlines’ growth in Hawaii this year. Southwest, which has 34 Boeing 737 Max 8s in its fleet, is the No. 1 operator of these planes. While Southwest doesn’t use 737 Max 8 aircraft in Hawaii, it has had to swap out these planes on the mainland, where reactionary flight cancellations have sometimes come into play.
“We understand that investors remain focused on the evolution of our competitive environment, especially from the western U.S. to Hawaii,” Ingram said during the company’s earnings conference call. “During the quarter, we witnessed the confirmation of the initial phase of Southwest capacity to Hawaii with flying commencing late in the period. Nothing we have seen so far deviates materially from what has been foreshadowed over the past 18 months.
“And nothing has changed our view that we should continue to execute our strategy and focus on the things we need to do to serve the needs of guests traveling to, from and within the Hawaiian Islands better than any other carrier, just as we have done for many years.”
Hawaiian, which offers nonstop service to Hawaii from 13 U.S. gateway cities, along with service from Japan, South Korea, Australia, New Zealand, American Samoa and Tahiti, has brightened its outlook by adjusting capacity and working to improve efficiency.
It’s pulling back in some competitive markets where supply and demand aren’t balanced. It’s expanding in markets where it can gain a greater foothold. In January it retired the last of its old Boeing 767 fleet, and in March took delivery of another Airbus A321neo to increase its fleet of these more efficient planes to 12.
In April, Hawaiian began service on its second East Coast route with five-times-a-week nonstop service between Boston’s Logan International Airport and Honolulu’s Daniel K. Inouye International Airport. It expanded service to Northern California, and it has submitted its application to the U.S. Department of Transportation for three additional daily flights between Honolulu and Tokyo’s Haneda International Airport.
During the first quarter, Hawaiian said it received notification from the U.S. Department of Transportation that its antitrust immunity application with Japan Airlines “was deemed substantially completed.”
In April the carrier also announced an expanded code-share agreement with Virgin Australia that it expects will broaden the network of flights for travelers in more than a dozen Australian and New Zealand cities.
First-quarter net
$36.4 million
Year-earlier net
$28.5 million
ON THE MOVE
Chun Kerr LLP has announced that R. Ka‘ili Akina as a new associate for the law firm. She specializes in real estate, business law, litigation as well as trust and estate administration. Akina was previously the state Judiciary pro bono legal researcher.
Hawaii Pacific University has announced that Violet “Vi” Loo has been named board officer for HPU, and Adrian Bellamy and Steve Metter were appointed trustees. Loo has upheld the legacy of her late husband, Paul C.T. Loo, co-founder of HPU, as well as contributed much to the university, and plays an active role in supporting students, faculty and the HPU community. Bellamy and Metter will be new additions to the board; they have many years’ experience in international business and commercial real estate.
