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The Honolulu Advertiser
Posted on: Tuesday, May 8, 2001

Hawaiian Air shows small profit

By Michele Kayal
Advertiser Staff Writer

Hawaiian Airlines posted a small profit during the first quarter of this year, an improvement over last year's losses made possible by an accounting adjustment.

Hawaiian reported net income of $216,000, or 1 cent a share, for the quarter ended March 31, compared with a loss of $2.6 million, or 6 cents a share, during the same period last year.

The airline attributed the first-quarter gain largely to an accounting adjustment of $3.6 million that was previously recorded as part of a restructuring charge for the estimated impact of returning DC-9 leases. The airline began replacing its aging DC-9 fleet with factory-fresh Boeing 717 aircraft in March.

Without this adjustment, Hawaiian executives said in a statement, the company would have shown a net loss of $3.2 million, or 10 cents a share for the first quarter, $600,000 more than during the same period a year earlier.

Hawaiian Airlines began replacing its DC-9 fleet with new Boeing 717s in March. The airline's first-quarter maintenance costs declined compared with the same period last year as the airline began phasing out its DC-9 fleet.

Advertiser library photo • March 16, 2001

Total operating revenues increased 8.8 percent to $148 million, compared with $136 million during the first quarter of 2000. The increase was primarily driven by improved profit margins, including an 8.3 percent gain in yield on scheduled service.

Operating expenses were up 4.9 percent to $147.3 million, compared with $140.5 million in the year-earlier period. A 10 percent increase in charter operations, coupled with a less effective hedging program for fuel during the first quarter, contributed to the increased expenses.

Maintenance costs shrank $3.2 million, or 11.4 percent, over the same period last year as the airline began phasing out its maintenance-intensive DC-9 fleet.

Hawaiian has taken delivery of three 717s, two of which are in regular service. The third is used for training and as a spare, said Hawaiian spokesman Keoni Wagner.