Hawaiian Airlines President and CEO Peter Ingram said Tuesday on the heels of a $98.3 million first-quarter loss that the carrier’s investment in technology and other projects underway this year have positioned it for a “bright future.”
Honolulu-based parent company Hawaiian Holdings Inc. reported that the airline improved its results from a loss of $133.3 million in the year-ago period. Its loss per share of $1.91 was smaller than the loss per share of $2.60 a year ago.
Losses, adjusted for nonrecurring costs, came to $2.17 a share, compared with $2.54 a share in the first quarter of 2022.
The first-quarter results surpassed Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for a loss of $2.28 a share. Hawaiian posted revenue of $612.6 million in the period, which also beat Street forecasts.Three analysts surveyed by Zacks expected $608.3 million.
Ingram said during an earnings conference call with analysts that “2023 is off to an encouraging start. Many of the challenges we have discussed on previous calls remain, but leisure demand and the substantial majority of our markets remain and we outperformed our revenue guidance in the first quarter. At the same time, we continue to execute against a wide variety of important initiatives this year that are going to position us extremely well for the years to come.”
Ingram said Hawaiian made the transition of its passenger service system to Amadeus’ Altea platform last week.
“This is the largest technology project in the history of our company, and hundreds of people worked for more than a year to make it happen,” he said.
Hawaiian has high hopes for the transition, which Ingram said allows the airline to “build new digital experiences and revenue-generating products, on top of this fundamentally sounder technology foundation.”
However, the transition, which took place April 18-19, was accompanied by some intermittent technical problems that continued through Friday.
Ingram said, “The core PSS transition went smoothly, but we did experience issues in some of the Hawaiian Airline systems that connect it, particularly our website and kiosk check-in. Those systems have been stabilized since the end of last week. But in the three days immediately following the cutover, we faced crowded airport lobbies and were unable to take the normal volume of bookings on our website.”
Hawaiian spokesperson Alex Da Silva said Hawaiian restored booking on its website and mobile apps Friday. Da Silva said Hawaiian is not releasing booking data relative to the incident but that as it “relates to revenue impact, we believe will have a roughly $4 million-to-$6 million drag on revenue in the second quarter.”
While Hawaiian has been experiencing operational disruptions, Da Silva said that the “system upgrade did not significantly affect our operations, though we do know that some guests missed flights and we worked to reaccommodate them.”
“Our operational disruptions continue to be largely attributed to runway construction and air traffic control challenges at Honolulu airport,” he said.
Ingram said that since October, Daniel K. Inouye International Airport has operated without access to its primary arrivals runway. The project, which has experienced delays, is currently scheduled to be completed before the end of May.
Ingram said another important operational change will take place in less than a week when Hawaiian “insources substantial elements of our A330 (aircraft) maintenance from a third party, reducing our steady state expenses, giving our team greater control of our day-to-day operation and allowing us to scale our costs more effectively as we grow the fleet with the Amazon A330 freighters.”
Ingram said demand from the mainland, Australia, New Zealand and South Korea to Hawaii was strong in the first quarter. However, he said Japan’s recovery remained slow.
“We’ve seen some green shoots in recent weeks, but our Japan routes remain far from a complete recovery. With the extension of slot flexibility for a few more months, we are going to fly less Japan capacity in the summer than we anticipated when building our 2023 plans,” Ingram said.
Hawaiian said it would shift some capacity from Japan this summer to the more rewarding mainland market but is limited by supply chain issues affecting capacity for its A321neo fleet and preventing Hawaiian from optimizing its schedule.
Brent Overbeek, Hawaiian’s senior vice president and chief revenue officer, said Hawaiian’s neighbor island revenue performance also continues to be challenged by low fares.
“Our competitor (Southwest) is no longer offering $39 last-seat availability as they were for most of the second half of last year,” Overbeek said. “However, low fares remain broadly available in the market.”
He said Hawaiian is committed to serving the neighbor islands and that data from the state Department of Transportation shows “we have a unit revenue that was almost three times our competitor (Southwest) and a load factor that was almost 30 points higher.”
FIRST-QUARTER LOSS
$98.3 million
YEAR-EARLIER LOSS
$133.3 million
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The Associated Press contributed to this story.
