Hawaiian Holdings reported a consolidated net loss for the three months ended June 30, 2011 of $50.0 million, or $0.99 per basic and diluted share, on total operating revenue of $395.0 million.
The loss was impacted by a non-recurring pre-tax lease termination expense of $70.0 million ($42.0 million after-tax) related to the purchase of 15 Boeing 717-200 aircraft previously operated under lease agreements. Excluding the lease termination charge, the airline reported an adjusted net loss of $8.0 million or $0.16 per basic and diluted share for the three months ended June 30, 2011, compared to net income of $9.0 million, or $0.17 per diluted share, on total operating revenue of $315.9 million for the three months ended June 30, 2010.
Reflecting economic fuel expense and excluding the impact of the lease termination costs, the airline reported an adjusted net income of $0.1 million, or $0.00 per basic and diluted share, compared to adjusted net income of $11.0 million, or $0.21 per diluted share, in the prior year period.
The main impact on profit was the high cost of fuel. Hawaiian reported fuel costs in the second quarter to have increased by 72.3% year-over-year to $135.5 million, which represents 29.1% of operating expenses (34.3% of operating expenses excluding lease termination expense). Hawaiian’s average cost per gallon of jet fuel increased 45.9% year-over-year to $3.34 (including taxes and delivery). The financial impact of hedging activities is included in nonoperating income/expenses, and as such is not reflected in fuel expense. Nonoperating expense in the second quarter reflects $10.5 million in net losses from Hawaiian’s fuel hedging activity.