Hawaiian reports operating profit
By Debbie Sokei
Advertiser Staff Writer
Bankrupt Hawaiian Airlines reported an operating profit of $77.5 million last year, but after subtracting $115 million in "reorganization items" and other non-operating expenses, the profit turned into a net loss of nearly $50 million.
Last year's totals compare to an operating loss of $55.2 million in 2002 and a net loss of $57.4 million that year.
"It was an amazing year," said Joshua Gotbaum, Hawaiian's court-appointed trustee, in a statement. "Hawaiian's management and employees have done a spectacular job. They have reformed almost every part of Hawaiian's operations."
The airline's sales increased 12 percent to $706 million, up from $632 million the previous year.
Hawaiian's 2003 operating profit included a $17.5 million security fee reimbursement from the federal government.
Gotbaum said many positive changes contributed to Hawaiian's operating success. Passenger revenue increased by $85 million, cargo revenue by $7 million. A new fleet of Boeing jets produced a savings of $41 million in aircraft maintenance, while the increased use of Hawaiian's Web site and direct booking saved $10 million in distribution costs.
These offset increases of $28 million in aircraft rent and $10 million in wages and benefits, as well as a $23 million decline in charter revenue from reduce charter service compared to the prior year.
The airline said its $49.5 million net loss was due mostly to $115.1 million in reorganization expenses. The airline provided little detail in its statement on those costs other than to say "$102 million represents non-cash charges, consisting of bankruptcy-related claims and asset write-offs."
Hawaiian, the state's largest airlines, filed for Chapter 11 bankruptcy protection March 2003 after John Adams, the former CEO of Hawaiian, could not reach an agreement with Boeing to lower the cost of aircraft leases. The bankruptcy court removed Adams as CEO in May and replaced him with a court-appointed trustee.
Reach Debbie Sokei at 525-8064 or dsokei@honoluluadvertiser.com.
