Hawaiian Air ended ’08 with US$11.9M slump


HONOLULU, HI – What began as a promising year for Hawaiian Airlines ended on a negative note due to volatile fuel prices and an “economic cataclysm” that resulted in a double-digit decline in statewide visitor arrivals.

Hawaiian yesterday reported a net loss of US$11.9 million, or 23 cents a share, for the fourth quarter of 2008, reversing a profit of US$3.3 million, or 7 cents per share, in the year-earlier period.

The quarterly loss came after Hawaiian’s net income soared by US$36.6 million during the first nine months of last year in the wake of the failures of Aloha Airlines and ATA Airlines and a US$52.5 million legal settlement payment from Mesa Air Group.

“Hawaiian had to cope with three unexpected but defining events during the year: the foundering of two of our competitors; the escalation in the price of petroleum products and their subsequent collapse; and the economic cataclysm that has seized our local, national, and global economies,” said Hawaiian chief executive officer Mark Dunkerley. “2008 was a year of unpredicted fortune and 2009 may well be similar.”

Shares of Hawaiian dropped 22 cents yesterday to close at US$3.61 on the Nasdaq stock market.

Hawaiian, the state’s largest carrier, said passenger counts on its west coast-to-Hawaii flights were flat during the fourth quarter, reflecting the weak economy. But interisland travel rose sharply, lifting the company’s overall passenger count.

More than 1.9 million passengers flew Hawaiian during the three months ending December 31, 2008, an 8.6 percent increase from the year-earlier period. The company’s passenger count for all of 2008 was up 10.7 percent to nearly 7.9 million customers.

Overall, the number of visitors traveling to Hawaii last year declined 10.7 percent to 6.7 million, according to the state Department of Business, Economic Development and Tourism. Arrivals in the fourth quarter fell 13.3 percent from the year-earlier period.

For the full year, Hawaiian netted US$28.6 million, or 57 cents a share, which was up from 2007’s net income of US$7.1 million, or 15 cents a share. Hawaiian’s quarterly revenues and operating income also showed gains.

The airline said its operating revenues increased 19.9 percent to US$300.5 million in the fourth quarter while operating income hit US$38.1 million, reversing a US$2 million operating loss in fourth quarter 2007.

That was offset by a US$21.3 million nonoperating expense stemming from Hawaiian’s fuel hedging strategy, which protects the airline against volatile jet fuel prices. Hawaiian recorded the loss when prices fell during the fourth quarter.

“No one would have scripted the story line of 2008 one year ago,” Dunkerley said.