Hawaiian Holdings reports 2012 financial results

HONOLULU — Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc. reported its financial results for the full year 2012 and the fourth quarter of 2012.

“A good year of growth and improving financial performance was finished off by a disappointing break-even result in the fourth quarter,” said Mark Dunkerley, president and CEO.

He attributed the results to the sharp weakening of the yen, continued excess capacity in certain markets and an accounting charge all worked to depress earnings for the period despite many other things going right for HA.

“The year as a whole was every bit as busy and exciting as we had forecast,” he said. “We added four new long haul destinations, eight long haul and short haul aircraft, opened a hub on Maui and added approximately 600 employees to our rolls, all in 2012.”

Dunkerley said that throughout it all, HA employees continued delivering the very highest quality travel and shipping experience to customers.

“Employees’ tireless dedication to our customers and to our business is a distinguishing strength of Hawaiian Airlines,” he said. “2013 promises to be an equally exciting year for the company with new destinations, new aircraft and more employees being planned.”

The fourth quarter 2012 results reflect an out-of-period frequent flyer adjustment related to the timing of revenue recognized for mileage credits sold to participating companies in previous years.

This adjustment resulted in a net decrease to pre-tax income of $7.3 million in the quarter, or $0.08 per diluted share, with a $7.9 million decrease to passenger revenue and $0.6 million decrease to other operating expense.

Hawaiian expects to take delivery of five Airbus A330-200 aircraft in 2013, and entered into debt and lease financing commitments for the first four deliveries in the first half of the year.

The increase in HA’s fleet resulting from the delivery of five Airbus A330-200 aircraft in 2013 will be partially offset by a decrease of four Boeing 767-300ER aircraft during the year, with three aircraft returned at the end of their lease terms and one planned retirement.

In January, the company signed a memorandum of understanding for the purchase of 16 new Airbus A321 neo aircraft for delivery between 2017 and 2020, with the rights to purchase an additional nine aircraft.

The long-range, single-aisle aircraft will complement Hawaiian’s existing fleet of wide-body, twin-aisle aircraft used for long-haul flying between Hawai‘i and the U.S. West Coast.

2012 Full Year Financial Highlights

• Adjusted net income, reflecting economic fuel expense and excluding lease termination costs, of $55.6 million or $1.06 per diluted share, an increase of 28.7 percent year-over-year.

• GAAP net income of $53.2 million or $1.01 per diluted share.

• Operating cost per available seat mile, excluding fuel and lease termination costs, decrease of 6.0 percent year-over-year.

• Adjusted operating margin of 7.0 percent, reflecting economic fuel expense and excluding lease termination costs.

• Unrestricted cash and cash equivalents increase of 33.5 percent year-over-year.

• Return on invested capital, pre-tax, of 14.9 percent.

Fourth Quarter 2012 Financial Highlights

• Available seat mile for scheduled operations increase of 29.2 percent year-over-year.

• Adjusted net income, reflecting economic fuel expense, of $0.1 million or $0.00 per diluted

share.

• GAAP net loss of $3.4 million or $0.07 cents per diluted share.

• CASM, excluding fuel, decrease of 11.3 percent year-over-year.

• Unrestricted cash and cash equivalents of $405.9 million.

Operations

• Ranked No. 1 nationally for on-time performance, for 10 out of the 11 months reported in 2012, by the U.S. Department of Transportation Air Travel Consumer Report.

• Ranked second overall in the 2012 Airline Quality Rating Report.

• Introduced a Maui hub offering improved connections between Maui and Neighbor Island destinations, as well as additional flights to and from the West Coast.

• Provided chartered air transportation for the Oakland Raiders for the 13th consecutive season.

• Signed a new three-year contract with the Association of Flight Attendants.

• Became the first airline to receive aviation carbon credits for reducing carbon dioxide emissions.

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