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Hawaiian Airlines Carries Record 11.5 Million Passengers in 2017

Updates Expected Fourth Quarter and Full Year 2017 Metrics

Hawaiian Airlines, Inc., a subsidiary of Hawaiian Holdings, Inc. (NASDAQ:  HA), welcomed a record 11,505,324 guests in 2017, a 4.1 percent increase over the previous year.  Hawai’i’s largest and longest-serving airline today announced its system-wide traffic statistics for the month, quarter, and full year ended December 31, 2017.  The Company also updated its expectations for certain fourth quarter and full year 2017 financial metrics.

The record number of passengers in 2017 marks 13 straight years of growth as the Company continues to expand its network and fleet, providing travelers with more options to fly to, and within, the Hawaiian Islands than any other carrier.

Hawaiian took delivery of its first of 18 A321neo aircraft in November, and its second in December.  The A321neo aircraft will help the airline to build upon its already strong U.S. West Coast presence, highlighted by recent announcements that included new daily non-stop service to Maui’s Kahului Airport from San Diego and Portland international airports as well as to Honolulu’s Daniel K. Inouye Airport from Long Beach Airport.  Hawaiian will also expand its summer seasonal service with four additional daily summer flights in 2018, including its first international seasonal service between Narita and Honolulu international airports. Additionally, Hawaiian added its 24th A330-200 aircraft in October and its first of three expected ATR 72 turboprop aircraft in an all-cargo configuration in December.

SYSTEM-WIDE OPERATIONS1

DECEMBER

2017

2016

% CHANGE

PAX

1,000,646

927,521

7.9%

RPMS (000)

1,388,279

1,336,613

3.9%

ASMS (000)

1,645,354

1,589,264

3.5%

LF

84.4%

84.1%

0.3 pts

FOURTH QUARTER

2017

2016

% CHANGE

PAX

2,913,591

2,729,726

6.7%

RPMS (000)

4,125,894

3,932,713

4.9%

ASMS (000)

4,798,039

4,570,679

5.0%

LF

86.0%

86.0%

0.0 pts

YEAR-TO-DATE

2017

2016

% CHANGE

PAX

11,505,324

11,050,911

4.1%

RPMS (000)

16,316,739

15,492,509

5.3%

ASMS (000)

19,006,682

18,384,637

3.4%

LF

85.8%

84.3%

1.5 pts

Fourth Quarter & Full Year 2017 Outlook

The Company has revised certain of its expectations for the quarter and year ended December 31, 2017, that were previously provided in its Third Quarter 2017 Earnings Release on October 19, 2017 and updated on December 5, 2017.

Specifically, for the quarter and year ended December 31, 2017, the Company:

The tables below summarize the Company’s revised expectations, expressed as an expected percentage change compared to the results for the quarter and year ended December 31, 2016.

Item

Prior Fourth Quarter 2017 Guidance

Revised Fourth Quarter 2017 Guidance

GAAP Equivalent

Prior GAAP Fourth Quarter 2017 Guidance

Revised GAAP Fourth Quarter 2017 Guidance

Cost per ASM excluding fuel and special items (a)

Up 3.5% to up 6.5%

Up 6.0% to up 7.0%

Cost per ASM (a)

Down 10.3% to down 13.5%

Down 8.6% to down 10.5%

Operating revenue per ASM

Up 1.5% to up 3.5%

Up 2.5% to up 3.5%

Gallons of jet fuel consumed

Up 5.0% to up 8.0%

Up 7.5% to up 8.5%

Item

Prior Full Year 2017 Guidance

Revised Full Year 2017 Guidance

GAAP Equivalent

Prior GAAP Full Year 2017 Guidance

Revised GAAP Full Year 2017 Guidance

Cost per ASM excluding fuel and special items (a)

Up 6.0% to up 7.0%

Up 6.7% to up 7.2%

Cost per ASM (a)

Up 3.6% to up 5.5%

Up 4.3% to up 6.0%

Operating revenue per ASM

Up 5.5% to up 6.5%

Up 6.1% to up 6.6%

Gallons of jet fuel consumed

Up 5.5% to up 6.5%

Up 6.3% to up 6.8%

The Company believes that CASM excluding fuel and special items provides useful information about the underlying cost structure of the Company and is consistent with the metrics used by management to measure and monitor the Company’s costs.

Tax Reform Impact

For the quarter ended December 31, 2017, the Company expects to record a one-time reduction to income tax expense in the range of $90$140 million due to the expected effect of the Tax Cuts and Jobs Act of 2017. This reduction is a result of the difference between rates in effect when income tax expense was accrued, and the rates expected to be in effect when the income taxes will likely be paid. This estimated impact is a non-cash item and is expected to be treated as a special item.

Non-GAAP Financial Reconciliations

(in thousands)

Table 1

Estimated three months ended December 31, 2017

GAAP operating expenses

$

579,637

to

$

591,763

Less: aircraft fuel, including taxes and delivery

(120,887)

to

(128,685)

Adjusted operating expenses – excluding aircraft fuel

$

458,750

to

$

463,078

Available Seat Miles

4,798,039

to

4,798,039

CASM – GAAP

12.08

¢

to

12.33

¢

Less: aircraft fuel

(2.52)

to

(2.68)

CASM – excluding aircraft fuel and special items

9.56

¢

to

9.65

¢

Estimated twelve months ended December 31, 2017

GAAP operating expenses

$

2,194,731

to

$

2,230,991

Less: aircraft fuel, including taxes and delivery

(427,190)

to

(455,277)

Less: special items

    Loss on sale of aircraft

(4,771)

to

(4,771)

    Collective bargaining charge

(18,679)

To

(18,679)

Adjusted operating expenses – excluding aircraft fuel

$

1,744,091

to

$

1,752,264

Available Seat Miles

19,006,682

to

19,006,682

CASM – GAAP

11.55

¢

to

11.74

¢

Less: aircraft fuel

(2.24)

to

(2.39)

Less: special items

    Loss on sale of aircraft

(0.03)

to

(0.03)

    Collective bargaining charge

(0.10)

to

(0.10)

CASM – excluding aircraft fuel and special items

9.18

¢

to

9.22

¢

Posted by on January 9, 2018.

Categories: Travel Industry News

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