Hawaiian Holdings Reports 2023 Fourth Quarter And Full Year Financial Results

Republished By Plato

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Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc. has reported its financial results for the fourth quarter and full year 2023.

“I am grateful to our team who accomplished an extraordinary amount, including realizing foundational investments during a challenging year,” said Hawaiian Airlines President and CEO Peter Ingram. “Demand is solid across our networks, our brand remains strong in Japan as the market recovers, and we have seen steady improvement in travel to Maui. We expect the combination with Alaska will create an even more competitive combined airline, positioning the Hawaiian Airlines brand to flourish in the years ahead.”

Fourth Quarter 2023 – Key Financial Metrics and Results
	GAAP	YoY Change	Adjusted (a)	YoY Change
Net Loss	($101.2M)	($51.0M)	($122.7M)	($98.0M)
Diluted EPS	($1.96)	($0.98)	($2.37)	($1.88)
Pre-tax Margin	(19.0) %	(10.4) pts.	(22.9) %	(18.6) pts.
EBITDA	($71.8M)	($65.7M)	($98.1M)	($123.7M)
Operating Cost per ASM	15.30¢	(0.16)¢	11.77¢	0.88¢

Full Year 2023 – Key Financial Metrics and Results
	GAAP	YoY Change	Adjusted (a)	YoY Change
Net Loss	($260.5M)	($20.4M)	($313.5M)	($103.1M)
Diluted EPS	($5.05)	($0.38)	($6.08)	($2.00)
Pre-tax Margin	(12.1) %	(1.0) pts.	(14.5) %	(4.5) pts.
EBITDA	($103.6M)	($41.8M)	($169.0M)	($138.0M)
Operating Cost per ASM	14.90¢	(0.36)¢	11.29¢	0.51¢

(a) See Table 4 for a reconciliation of adjusted net loss, adjusted diluted EPS, adjusted pre-tax margin, adjusted EBITDA, and adjusted operating cost per ASM (CASM excluding fuel and non-recurring items) to each of their respective most directly comparable GAAP financial measure.

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.

Liquidity and Capital Resources

As of December 31, 2023 the Company had:

Unrestricted cash, cash equivalents and short-term investments of $908.5 million
Outstanding debt and finance lease obligations of $1.7 billion
Liquidity of $1.1 billion, including an undrawn revolving credit facility of $235 million

Revenue Environment

Following the Maui wildfires, Hawaiian saw a steady recovery of travel from North America to Maui. Non-Maui routes and international markets ex-Japan continued to perform and demand remained solid. In international markets, strong U.S. and other point-of sale demand, coupled with an increase in Japan-originating traffic, contributed to a 20.7% point increase in International passenger load factor year-over-year. Premium products continued to demonstrate strong performance for the fourth quarter and full year 2023.

The Company’s overall operating revenue for the fourth quarter 2023 was down 8.5% compared to the fourth quarter of 2022 on 3.3% higher capacity. In addition to the impact from the Maui wildfires, pandemic-related spoilage and revenue from pent-up travel demand in 2022 drove the year-over-year decline. The Company’s overall operating revenue for 2023 was up 2.8% from 2022 on 8.1% higher capacity.

Other Revenue for fourth quarter 2023 was down 15.9% compared to the same period in 2022, primarily driven by a decrease in cargo revenue. Cargo activity in 2022 was higher than normal due to lingering pandemic-related effects. Full year 2023 Other Revenue was down 16.2% compared to 2022, driven by decreases in cargo revenue and contract services.

Fourth Quarter and Full Year 2023 Highlights

Routes and scheduled services

Operated 108% of its 2022 capacity: 96%, 112%, and 172% capacity on its North America, Neighbor Island, and International routes, respectively
Launched ticket sales for new daily nonstop service between Salt Lake City and Honolulu, which will commence on May 15, 2024
Announced expansion of service in Sacramento with four weekly flights to Līhuʻe, Kauaʻi starting May 24, 2024 and three weekly flights to Kona on the Island of Hawaiʻi starting May 25, 2024

Awards and Recognition

Ranked highest for economy travel customer satisfaction in Consumer Reports‘ 2023 Airline Travel Buying Guide
Named the best domestic airline in Travel + Leisure’s 2023 “World’s Best Awards” annual reader survey
Rated as one of the top airlines in the U.S. by Condé Nast Traveler readers for the 2023 Readers’ Choice Awards
Awarded best new business class in 2023 by TheDesignAir for its new business class product, the Leihōkū Suites

Guest experience

Received FAA approval of the Starlink system on the Airbus A321neo, which is currently being installed on that fleet. Hawaiian will be the first major airline to put this technology on-board, and it is expected to be the fastest, most capable inflight connectivity available worldwide, offered free to every guest
Collaborated with Hawaiʻi lifestyle brand Noho Home to design Hawaiian’s new in-flight amenity kits and soft goods with a focus on sustainability and rooted in aloha. Amenities are made with responsibly sourced materials and offered to Business Class guests on long-haul flights a la carte to minimize waste

Environmental, Social and Corporate Governance

In May 2023, the Company published its 2023 Corporate Kuleana (Responsibility) Report, providing progress on Environmental, Social and Governance (ESG) priorities, which included a decarbonization roadmap with interim targets to lower greenhouse gas emissions focused on replacing petroleum jet fuel with sustainable aviation fuel (SAF); plans to decrease life-cycle jet fuel emissions per revenue ton mile by 45% by 2035; and efforts to replace 10% of conventional jet fuel with SAF by 2030. The report also highlights Hawaiian’s employee diversity, including the highest percentage of women pilots of any major U.S. airline.

Other activities in 2023 include the following:

Engaged over 1,500 volunteers who donated over 8,500 hours of community service work for more than 200 organizations throughout Hawaiʻi and other markets we serve
Donated $109,500 through the Hawaiian Airlines Foundation as a grant to Kāko’o ‘Ōiwi, a nonprofit organization dedicated to advancing the cultural, spiritual and traditional practices of the Native Hawaiian community. The grant funded the construction of a produce washing and packing facility to serve small, family farms in the area
Brought the Holoholo Challenge virtual race series to Kauaʻi which raised almost $25,000 in proceeds benefiting the National Tropical Botanical Garden’s McBryde Garden, a 259-acre conservation and research area that is home to the world’s largest collection of native Hawaiian flora
Provided wide-ranging support for the Maui Community, including direct gifts of $50,000 each to the Hawaiʻi Foodbank, Maui Food Bank, and Hawaiʻi Community Foundation’s Maui Strong Fund, and a donor-matching HawaiianMiles campaign for the American Red Cross Hawaiʻi totaling approximately 140 million HawaiianMiles. Additionally, Hawaiian assisted with the evacuation of displaced residents and visitors and the transportation of first responders to Maui, and also supported relief efforts by carrying over 193,000 lbs. of essential cargo

The Company continues to focus on creating long-term value and positively impacting the people, environment and communities it serves. The Company will publish its fifth annual Corporate Kuleana Report in the spring of 2024.

Merger Agreement

On December 3, 2023, Alaska Air Group, Inc. and the Company announced that they have entered into a definitive agreement under which Alaska Airlines will acquire Hawaiian for $18.00 per share in cash, for a transaction value of approximately $1.9 billion, inclusive of $0.9 billion of Hawaiian’s net debt. The combined company will unlock more destinations for consumers and expand choice of critical air service options and access throughout the Pacific region, Continental United States and globally. The acquisition is conditioned on required regulatory approvals, approval by the Company’s shareholders, and other customary closing conditions. It is expected to close in 12-18 months from the announcement date.

First Quarter 2024 Outlook

The table below summarizes the Company’s expectations for the quarter ending March 31, 2024 expressed as an expected percentage change compared to the results for the quarter ended March 31, 2023. Figures include the expected impacts of the Company’s freighter operation, which are not yet expected to be material.

Item	GAAP First Quarter 2024 Guidance	Non-GAAP Equivalent	Non-GAAP First Quarter 2024 Guidance
Available Seat Miles (ASMs)	Up 2.5% to up 5.5%
Operating Revenue per ASM (RASM)	Down 1.0% to up 2.0%
Costs per ASM (CASM)	Up 5.0% to up 7.2%	CASM excluding fuel and non- recurring items (a)	Up 8.0% to up 11.0%
Gallons of Jet Fuel Consumed (c)	Up 4.0% to up 7.0%
Average fuel price per gallon, including taxes and delivery (b)	$2.66	Economic Fuel Price per Gallon (a)(b)(c)	$2.71
Effective Tax Rate	~21%

Full Year 2024 Outlook

The table below summarizes the Company’s expectations for the full year ending December 31, 2024 expressed as an expected percentage change compared to the results for the year ended December 31, 2023. Figures include the expected impacts of the Company’s freighter operation as the Company establishes its freighter operation.

Item	GAAP Full Year 2024 Guidance	Non-GAAP Equivalent	Non-GAAP Full Year 2024 Guidance
ASMs	Up 6.0% to up 9.0%
CASM	Up 0.7% to up 3.0%	CASM excluding fuel and non- recurring items (a)	Flat to up 3.0%
Gallons of Jet Fuel Consumed (c)	Up 4.0% to up 7.0%
Average fuel price per gallon, including taxes and delivery (b)	$2.55	Economic Fuel Price per Gallon (a)(b)(c)	$2.59
Capital Expenditures	$500M to $550M

(a) See Table 3 and Table 4 for a reconciliation of CASM excluding fuel and non-recurring items and economic fuel price per gallon to each of their respective most directly comparable GAAP financial measures.

(b) Average fuel price per gallon and economic fuel price per gallon estimates are based on the January 12, 2024 fuel forward curve.

(c) Gallons of jet fuel consumed do not include fuel used in the freighter operation, as those expenses are pass-through expenses not born by the Company.

Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.

Hawaiian aircraft photo gallery: