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The Honolulu Advertiser
Posted on: Wednesday, October 31, 2007

Hawaiian Air more than doubles earnings

By Rick Daysog
Advertiser Staff Writer

Hawaiian Airlines said its third-quarter 2007 earnings soared by more than 150 percent, helping pare losses suffered in each of the previous three quarters.

The state's largest airline said it netted $19.6 million, or 42 cents per share, during the three months ended Sept. 30, 2007, compared with $7.8 million, or 16 cents per share, during the year-earlier period. The latest results represent an about-face from the previous three quarters, in which Hawaiian lost a total of $25.4 million.

Separately, a federal bankruptcy judge yesterday ordered the parent of interisland carrier go! to pay Hawaiian Airlines $80 million for misusing confidential business information. Hawaiian sued Phoenix-based Mesa last year for $173 million in damages, alleging that Mesa illegally used the confidential data obtained during Hawaiian's bankruptcy to set up go!.

Hawaiian's stock rose 4 cents yesterday to close at $4.39 on the American Stock Exchange. In after-hours trading, Hawaiian shares jumped 61 cents to $5.

"We were pleased to see strong seasonal demand for Hawai'i vacations, good cost control and some astute judgment by our revenue management department coincide in the third quarter to generate better results than a year ago," said Mark Dunkerley, Hawaiian's chief executive officer.

Hawaiian said strong summer demand on its trans-Pacific routes boosted its overall revenues and passenger traffic.

The company said its planes were 87.7 percent full during the third quarter, which was up 1.6 percentage points from the previous year's third quarter.

Passenger revenue, meanwhile, jumped 17.5 percent to $272.5 million from the previous third quarter.

Hawaiian said that rising fuel prices continued to hurt its operations. The carrier said its expenditures for jet fuel have increased 18 percent to $76.8 million during the quarter.

The interisland fare war continued to affect the company's operations, the airline said.

"Our competitive environment remains challenging, the seasonal fall-off in demand for Hawai'i vacations during the winter will inhibit our ability to manage trans-Pacific yields as effectively as we did during the summer, and the rising price of fuel impacts our costs, so we continue to focus management attention on the rest of our cost base," Dunkerley said.

Hawaiian did not break out losses from its interisland operations in its recent quarterly filing. But in recent court testimony, Hawaiian's experts said the fare war was costing the local carrier $40 million in losses a year.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.