Hawaiian posts $137 million net loss in 2024 first quarter as maintenance expenses surge

Hawaiian Holdings, the parent company of Hawaiian Airlines, posted a GAAP net loss of $137.6 million for the first quarter of 2024, marking a greater loss than its 2023 first quarter net loss of $98.3 million. It also falls short of its estimated net loss of $139.2 million. Its total operating revenue was up 5.4% to $645.6 million with passenger revenue up 6.4% to $583.4 million. Its total operating expenses were up 8.8% to $794.2 million. Most notably, its maintenance, materials and repairs expenses were up 41.1% to $70.97 million. Its wages and benefits expenses were also up 8.3% as well as aircraft rent up 5.4%. It had made savings in the first quarter YoY in aircraft fuel (including taxes and delivery) expenses, which was down 4.5% to $188.8 million. Its loss per share was at $2.65, down 74 cents from its loss per share of $1.91 in the same period last year. “While some core parts of our network, notably Maui and Japan, have room to improve” said Hawaiian Airlines president and CEO Peter Ingram in an earnings call, “the aggregate demand we’re seeing across our portfolio of routes is encouraging.” He added that the company had a lot to look forward to in the year ahead including the pending merger with Alaska Air. Revenue passengers flown during its total operations in the first quarter were stable at a 1.1% increase to 2.6 million. Revenue passenger miles (RPM) and its available seat miles (ASM) were up 5.9% and 2.7%, respectively. Its operating cost per available seat mile (CASM) was up 5.9% while its operating revenue per available seat mile (RASM) was up 2.6%, which indicates the company is still managing the cost pressures it faced throughout the first quarter. Ingram had added that he expects all of the airline’s A321neo aircraft to be back in service within the next few weeks following jets being grounded due to the Pratt & Whitney engine issues. Additionally, the airline had begun taking delivery of its new 787 fleet, which will gradually replace its 717 aircraft. Management was enthusiastic about the new fleet, noting that it would provide a better customer experience while also boosting its overall capacity. “Pilot training and other fleet induction costs are being incurred now but will be offset by the capacity and revenue generated as we begin operating the new additions to our fleet,” said Hawaiian Airlines chief financial officer Shannon Okinawa. Management had later added in the call that the airline is continuing to hire new staff for the introduction of its new fleet, though most of the hiring has been completed. It added that it would be hiring at a reduced pace throughout the year as it sets up for 2025. It ended the quarter on March 31, 2024, with a liquidity of $1.15bn, including an undrawn revolving credit facility of $235 million as well as unrestricted cash, cash equivalents and short-term investments of $897 million. Its outstanding debt and finance lease obligations stood at $175bn by the end of the first quarter. For its second quarter guidance, the company estimates its CASM to be up between 8.4-10.7% and its RASM to be between a negative 1.5% and a positive 1.5%. For the full year, it has updated its CASM to be up between 4.1-6.3%, versus its prior guidance of being up between 0.7% and 3%. Additionally, it expects an increase of between 3.5% and 6.5% in its available seat miles (ASM) for the second quarter of the year. It updated its full year ASMs to see an increase of between 4.5% and 7.5%.