Hawaiian Airlines narrows losses
By Frank Cho
Advertiser Staff Writer
Hawaiian Airlines said yesterday that increased passenger traffic and higher cargo volume helped the company narrow fourth-quarter losses for the period that ended in December.
But higher fuel and maintenance costs and expenses related to the company's fleet modernization program continued to offset those gains.
Operating losses for the three months ending Dec. 31 narrowed to $17.9 million from a loss of $52.6 million in the same quarter a year ago.
The Honolulu-based carrier said net losses narrowed to $20.4 million, or 59 cents a share, from a loss of $34.2 million, or 83 cents, in the year-earlier period. Revenue rose 20 percent to $146.7 million from $122.4 million.
"We are very pleased with our continued success at driving revenue growth, however, higher maintenance and fuel costs will continue to mitigate that success until our ongoing fleet modernization program is complete," said Paul Casey, Hawaiian's vice chairman and chief executive officer.
Hawaiian's strategy is to introduce the more efficient Boeing 717 aircraft to improve its cost structure. The company is retiring its fleet of 15 DC-9 aircraft, which are being replaced this year by 13 Boeing 717-200s.
The number Hawaiian passengers during the quarter rose 5 percent compared to the same quarter in 1999, with scheduled passenger revenues rising 15.7 percent to $112.4 million. Charter revenues rose $5.7 million to $21.65 million during the final months of 2000, compared to the same year-ago period.
Fourth-quarter operating expenses were $164.6 million, including a $2.1 million restructuring charge related to the airline's DC-9 aircraft and a $7.6 million loss on assets related to the sale and leaseback of two DC-10 aircraft.
On an annual basis, operating revenues rose 24.2 percent to $607 million, compared to $488.9 million in 1999, reflecting interisland and transpacific passenger growth.
Revenues during the same period rose $118.3 million, or 24.2 percent, to $607.2 million. Operating expenses also rose, to $91.6 million, up17.3 percent primarily because of a $50.8 million increase in fuel costs.
Hawaiian recorded one-time charges during 2000 of $6.8 million related to the retirement of its DC-9 fleet and $8.1 million from the write-down of DC-9 spare parts.
When all restructuring charges and the loss on assets held for sale are included, Hawaiian reported an operating loss of $13.8 million last year, compared with $40.5 million in 1999.
Net losses in 2000 narrowed to $18.6 million, or 48 cents per share, compared with a loss of $29.3 million, or 72 cents, in the previous year.
When the one-time charges are excluded, the airline would have posted an operating profit of $8.7 million and a net profit of $5.5 million, or 14 cents a share, for 2000.
Casey said the airline is close to choosing a replacement for its widebody DC-10 aircraft, primarily used on long-haul flights.
"While we are excited about the prospect of greater operating efficiency, we are also concerned about the continuing high fuel prices and the potential effects of a slowing U.S. economy and continued instability of Japan's economy," Casey said.
In the final months of last year, Hawaiian Airlines reached a labor agreement with its pilots. It also has reached a tentative agreement with its flight attendants, but it continues to negotiate with unions such as the International Association of Machinists, the Transport Workers Union and the Communications Section over labor contracts.
