Hawaiian resumes trading
By David Butts and Kelly Yamanouchi
Advertiser Staff Writers
The stock price of Hawaiian Airlines' parent company closed at 45 cents yesterday, the first day the stock resumed trading since the carrier filing for bankruptcy protection and one day after revealing it had lost about $60 million last year.
Hawaiian Holdings shares fell to 36 cents during the day, the lowest level since 1995, but then regained ground by end of trading on the American Stock Exchange.
At its closing price, the stock had declined 70 percent from the $1.50 per share price it reached before the carrier's March 21 bankruptcy filing. The shares have lost 87 percent of their value since hitting a one-year high of $4 on June 27.
The American Stock Exchange, which halted trading in the stock when the carrier filed for bankruptcy, allowed Hawaiian to resume trading after reviewing the airline's annual report yesterday.
The report revealed the airline suffered a net loss of $58.3 million in 2002 compared with net income of $5.1 million in 2001. Hawaiian CEO John Adams blamed the ongoing economic crisis in the airline industry for the carrier's poor showing.
Colleen Blacktin, vice president and manager of Charles Schwab's Honolulu office, said if customers "come in and say, 'Should we buy Hawaiian Air?' we're going to step back and look at their total financial picture."
Blacktin said she does not follow Hawaiian stock individually but does monitor the aviation industry. "We think the fundamentals are negative," she said.
Hawaiian said it filed for Chapter 11 bankruptcy protection in order to renegotiate leases with aircraft lessors, including Boeing Capital Corp.
Negotiations have restarted, and Hawaiian has until May 20 to agree on leases before the aircraft can be legally reclaimed. Boeing Capital, however, said it will discuss a two-week extension with Hawaiian.
Hawaiian chief financial officer Christine Deister said she is "actively involved in the evaluation of alternative arrangements for aircraft" in the event that negotiations with lessors are unsuccessful.
Hawaiian said in its annual report that it cannot guarantee that it would be able to obtain alternative arrangements by the negotiation deadline.
"Furthermore, even if we were to obtain alternative arrangements, we cannot guarantee that we will be able to obtain them on terms favorable to us and we may incur substantial additional costs," the carrier said.
Besides its troubles with its aircraft leases, Hawaiian also must deal with underfunded pension plans, liabilities of which increased by $44.5 million last year.
"The next question is how are they going to make it up," said Blacktin.
Boeing Capital has asked the bankruptcy court to replace Hawaiian management with a trustee, charging the company's leadership with misconduct. The airplane manufacturer questioned in particular a $25 million stock buyback program intended to boost the stock price last year before the company asked for concessions from labor groups and lessors.
Adams, through his company Airline Investors Partnership, is a majority shareholder of Hawaiian Holdings. Airline Investors Partnership was one of the beneficiaries of the stock buybacks.
A hearing on Boeing's trustee motion will be held May 8.
