HONOLULU, July 27, 2021 /PRNewswire/ -- Hawaiian Holdings, Inc. (NASDAQ: HA) (the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported its financial results for the second quarter of 2021.
Second Quarter 2021 - Key Financial Metrics |
||||||||
GAAP |
YoY Change |
Adjusted |
YoY Change |
|||||
Net Loss |
$(6.2)M |
$100.7M |
$(73.8)M |
$100.9M |
||||
Diluted EPS |
$(0.12) |
$2.21 |
$(1.44) |
$2.37 |
||||
Pre-tax Margin |
(2.0)% |
+252.2 pts. |
(22.9)% |
+361.0 pts. |
"We made meaningful strides toward recovery during the second quarter, propelled by continued strong demand on our US mainland routes," said Peter Ingram, Hawaiian Airlines President and CEO. "It is encouraging to see how far we've come and I am optimistic about our continued recovery. My immense appreciation goes out to our team, who continues to embrace our purpose, in spite of the challenges facing them."
Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.
Second Quarter 2021
Financial Results
For the second quarter of 2021, the Company reported a net loss of $6.2 million, and an adjusted net loss of $73.8 million.
The Company reported total revenue of $410.8 million, down 42% compared to the second quarter of 2019, on 30% lower capacity.
The Company reported total operating expenses of $392.3 million, and operating expenses excluding non-recurring items of $478.4 million, down 23% compared to the second quarter of 2019.
Routes and Network
The State of Hawai'i made several positive changes to its Safe Travels program in the second quarter of 2021, including:
- Beginning May 11, 2021, travelers who were fully vaccinated in Hawaiʻi and had proof of vaccination were permitted to bypass COVID-19 testing and quarantine restrictions when traveling within the Hawaiian islands.
- Beginning June 15, 2021, all travel restrictions were removed for travel within the Hawaiian islands, and travelers who were fully vaccinated in Hawaiʻi were permitted to bypass COVID-19 testing and quarantine restrictions with proof of vaccination when traveling into the state.
- Beginning July 8, 2021, all domestic travelers who were fully vaccinated in the U.S. were permitted to bypass COVID-19 testing and quarantine restrictions with proof of vaccination when traveling into the state.
- The State of Hawaiʻi announced that the Safe Travel Program will end when 70% of the state's residents are fully vaccinated.
In the second quarter of 2021, the Company continued to rebuild and expand its network, primarily in North America. In June 2021, Hawaiian's North America traffic exceeded June 2019 levels. During the second quarter of 2021, the Company operated at an average of 70% of its 2019 second quarter system capacity, comprised of 97%, 57% and 11% capacity on its North America, Neighbor Island and International routes, respectively.
In April 2021, the Company launched twice weekly service between Honolulu's Daniel K. Inouye International Airport (HNL) and Austin-Bergstrom International Airport (AUS), and expanded this service to three-times-weekly for the summer of 2021.
In May 2021, the Company launched four-times-weekly seasonal service through August 15, 2021 between Kahului, Maui (OGG) and Phoenix Sky Harbor International Airport (PHX).
In June 2021, the Company announced the resumption of its Tahiti service following the launch of a pre-travel testing program between Hawaiʻi and French Polynesia that allows for quarantine-free travel between the two archipelagos. As part of the program, travelers inbound to Hawai'i will need to provide proof of a negative test result from a State-approved testing partner, while travelers outbound to Tahiti will need to provide proof of vaccination and have fulfilled the government of Tahiti's COVID-19 entry requirements prior to travel. Beginning August 7, 2021, the Company will reinstate its nonstop once-weekly service between Honolulu's Daniel K. Inouye International Airport (HNL) and Tahiti's Fa'a'ā International Airport (PPT).
Liquidity and Capital Resources
As of June 30, 2021, the Company had:
- Unrestricted cash, cash equivalents and short-term investments of $2.2 billion, up $304 million from March 31, 2021
- Outstanding debt and finance lease obligations of $2.2 billion, up $22 million from March 31, 2021
- Air traffic liability of $823 million, up $136 million from March 31, 2021
The Company further enhanced its liquidity position during the second quarter of 2021 with $173.4 million in grants and $31.4 million in loans pursuant to the Payroll Support Program Extension Agreement (the "PSP Extension Agreement") and Payroll Support Program 3 Agreement with the U.S. Department of the Treasury.
As of June 30, 2021, the Company had $2.4 billion in liquidity, including the undrawn portion of its $235 million revolving credit facility.
Guest Experience
In June 2021, the Company announced a partnership with Boyd Gaming Corporation that will allow members to earn greater benefits and rewards with Boyd Gaming's award-winning B Connected player loyalty program and the HawaiianMiles program. Boyd Gaming and Hawaiian Airlines loyalty members will enjoy reciprocal earning and redemption benefits, providing the Company's customers with greater access to B Connected's selection of rewards tiers, exclusive player benefits and entertainment experiences, as well as more ways to earn and use HawaiianMiles.
As of July 15, 2021, the Company restored its full cabin meal and beverage service, while maintaining safety standards for its guests and guest-facing team members.
The Company continues its enhanced cleaning procedures and guest-facing protocols to minimize the risk of transmission of COVID-19. Understanding that health and safety are still critical concerns for our guests, the Company will continue to focus on protective measures such as:
- Frequent cleaning and disinfecting of counters and self-service check-in kiosks in airports.
- Ensuring hand sanitizers are readily available for guests at airports it serves.
- Requiring guests and guest-facing employees to wear face masks or coverings, with guests required to wear masks from check-in to deplaning (except when eating or drinking on board).
- Performing enhanced aircraft cleaning between flights and during overnight parking.
Environmental, Social and Corporate Governance
In July 2021, the Company published its 2021 Corporate Kuleana Report reinforcing its commitment to sustainability and outlining its progress advancing various environmental, social and governance (ESG) initiatives. A link to the report can be found through the Investor Relations, Corporate Responsibility section of Hawaiian's website.
Addressing climate change remains one of the Company's key ESG priorities. The Company has committed to achieving net-zero carbon emissions by 2050 through ongoing fleet investments, more efficient flying, carbon offsets, industry advocacy for air traffic control reform and development of sustainable aviation fuel supply. Starting this year, the Company has pledged to offset emissions from international flights above 2019 levels, in accordance with the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
In 2020, the Company decreased Available Seat Miles (ASMs) by 63.3 percent and Revenue Passenger Miles (RPMs) by 74.3 percent compared to 2019. The Company's CO2 greenhouse gas emissions (GHG) dropped commensurately by 60.7 percent. After adjusting its fuel consumption figures to remove cargo-only flying, the Company reduced CO2 emissions intensity per ASM year-over-year by 2.1%.
The Company also defined steps it is taking to foster diversity and inclusion. Evidence-based processes to minimize bias in hiring and promotional practices across the Company have contributed to team diversity, with approximately 78% of Hawaiian's active workforce identifying as diverse based on ethnicity and 44% based on gender.
Third Quarter 2021 Outlook
The Company expects to continue to rebuild its network in the third quarter, driven primarily by North America and Neighbor Island flying, as the timing of International demand recovery remains uncertain. The Company expects improvement in total revenue, with continued strength in North America demand, and steady improvement in Neighbor Island. The Company expects an increase in operating expenses, excluding non-recurring items, primarily driven by the increase in capacity as compared to the second quarter, higher fuel price, higher airport rates, and costs related to preparing for the resumption of more significant international flying.
The table below summarizes the Company's expectations for the third quarter ending September 30, 2021, expressed as an expected percentage change compared to the results for the quarter ended September 30, 2019, as applicable.
Item |
Third Quarter 2021 |
GAAP Equivalent |
GAAP Third Quarter |
|||
ASMs |
Down 20 to 23% |
|||||
Total Revenue |
Down 28 to 33% |
|||||
Operating Expenses, excluding non-recurring items (a) |
Down 10 to 14% |
Operating Expenses (a) |
Down 22 to 26% |
|||
Interest Expense |
$30 million |
|||||
Adjusted EBITDA (b) |
$(20) million to $20 million |
|||||
Effective Tax Rate |
~21% |
|||||
Fuel Price per Gallon (c) |
$2.04 |
(a) |
See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding non-recurring items. |
(b) |
The Company is not providing a reconciliation of adjusted EBITDA to GAAP net income, the most directly comparable GAAP measure, as it is unable, without unreasonable efforts, to calculate certain special and non-recurring charges, which could have a significant impact on the GAAP measure. |
(c) |
Fuel Price per Gallon estimates are based on the July 23, 2021 fuel forward curve. |
Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.
Investor Conference Call
Hawaiian Holdings' quarterly results conference call is scheduled to begin today (July 27, 2021) at 4:30 p.m. Eastern Time (USA). The conference call will be broadcast live over the Internet. Investors may access and listen to the live audio webcast on the investor relations section of the Company's website at HawaiianAirlines.com. For those who are not available for the live webcast, a replay of the webcast will be archived for 90 days on the investor relations section of the Company's website.
About Hawaiian Airlines
Hawaiian® has led all U.S. carriers in on-time performance for each of the past 17 years (2004-2020) as reported by the U.S. Department of Transportation. Consumer surveys by Condé Nast Traveler, Travel + Leisure and TripAdvisor have placed Hawaiian among the top of all domestic airlines serving Hawai'i.
Now in its 92nd year of continuous service, Hawaiian is Hawai'i's biggest and longest-serving airline. Hawaiian offers approximately 130 flights within the Hawaiian Islands, daily nonstop flights between Hawai'i and 16 U.S. gateway cities – more than any other airline – as well as once-weekly service connecting Honolulu and Tahiti. As a result of the COVID-19 pandemic, Hawaiian is operating an adjusted flight schedule between Hawai'i and Japan and Korea, and has temporarily suspended service in Australia, New Zealand and American Samoa.
The airline is committed to connecting people with aloha by offering complimentary meals for all guests on transpacific routes and the convenience of no change fees on Main Cabin and Premium Cabin seats. HawaiianMiles members also enjoy flexibility with miles that never expire.
Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com. Follow Hawaiian's Twitter updates (@HawaiianAir), become a fan on Facebook (Hawaiian Airlines), and follow us on Instagram (hawaiianairlines). For career postings and updates, follow Hawaiian's LinkedIn page.
For media inquiries, please visit Hawaiian Airlines' online newsroom.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to certain current and future events and financial performance. Such forward-looking statements include, without limitation, the Company's recovery from the COVID-19 pandemic, including the timing to rebuild its business; route schedules; the outcome of the Company's partnership with Boyd Gaming Corporation, the Company's continued focus on effective cleaning, sanitization and safety efforts; the Company's ESG commitments, the Company's expectations related to rebuilding its network and improvement in revenue in the third quarter of 2021, including the expected strength of the North America market; expectations related to the recovery of our international routes; the Company's expectations regarding the increase in operating expenses, excluding non-recurring items, driven by the increase in capacity in the third quarter of 2021; the Company's outlook for the third quarter of 2021, including expectations regarding ASMs, total revenue, operating expense, interest expense, adjusted EBITDA, effective tax rate, capital expenditures and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Words such as "expects," "anticipates," "projects," "intends," "plans," "believes," "estimates," variations of such words, and similar expressions are also intended to identify such forward-looking statements. These forward-looking statements are and will be subject to many risks, uncertainties and assumptions relating to the Company's operations and business environment, all of which may cause the Company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. These risks and uncertainties include, without limitation, the continuing and developing effects of the spread of COVID-19 on the Company's business operations and financial condition; the duration of government-mandated and other restrictions on travel; the full effect that the quarantine, restrictions on travel and other measures to limit the spread of COVID-19 will have on demand for air travel in the markets in which the Company operates; fluctuations and the extent of declining demand for air transportation in the markets in which the Company operates; the Company's dependence on the tourism industry; the Company's ability to manage its available cash; the Company's ability to accurately forecast economic volatility; macroeconomic developments; political developments; the price and availability of aircraft fuel; labor negotiations; regulatory determinations and related developments; competitive pressures, including the impact of industry capacity between North America and Hawai'i and interisland; changes in the Company's future capital needs; and foreign currency exchange rate fluctuations.
The risks, uncertainties and assumptions referred to above that could cause the Company's results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company's other public filings and public announcements, including the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available to the Company on the date hereof. The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.
Table 1. Hawaiian Holdings, Inc. Consolidated Statements of Operations (unaudited) |
||||||||||||||||||||||
Three Months Ended June 30, |
Six months ended June 30, |
|||||||||||||||||||||
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
|||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||||
Operating Revenue: |
||||||||||||||||||||||
Passenger |
$ |
356,271 |
$ |
29,762 |
1,097.1 |
% |
$ |
493,740 |
$ |
533,231 |
(7.4) |
% |
||||||||||
Other |
54,510 |
30,242 |
80.2 |
% |
99,258 |
85,917 |
15.5 |
% |
||||||||||||||
Total |
410,781 |
60,004 |
584.6 |
% |
592,998 |
619,148 |
(4.2) |
% |
||||||||||||||
Operating Expenses: |
||||||||||||||||||||||
Wages and benefits |
170,858 |
141,889 |
20.4 |
% |
330,937 |
330,143 |
0.2 |
% |
||||||||||||||
Aircraft fuel, including taxes and delivery |
83,840 |
7,003 |
1,097.2 |
% |
131,576 |
120,481 |
9.2 |
% |
||||||||||||||
Maintenance, materials and repairs |
37,083 |
13,994 |
165.0 |
% |
71,335 |
74,403 |
(4.1) |
% |
||||||||||||||
Aircraft and passenger servicing |
25,730 |
3,036 |
747.5 |
% |
42,981 |
41,319 |
4.0 |
% |
||||||||||||||
Depreciation and amortization |
35,113 |
39,333 |
(10.7) |
% |
70,469 |
78,782 |
(10.6) |
% |
||||||||||||||
Commissions and other selling |
17,270 |
2,927 |
490.0 |
% |
28,679 |
29,643 |
(3.3) |
% |
||||||||||||||
Aircraft rent |
27,679 |
23,886 |
15.9 |
% |
57,520 |
50,890 |
13.0 |
% |
||||||||||||||
Other rentals and landing fees |
27,339 |
13,677 |
99.9 |
% |
47,007 |
43,443 |
8.2 |
% |
||||||||||||||
Purchased services |
23,771 |
19,887 |
19.5 |
% |
47,868 |
54,128 |
(11.6) |
% |
||||||||||||||
Special items |
8,983 |
34,014 |
(73.6) |
% |
8,983 |
160,918 |
(94.4) |
% |
||||||||||||||
Government grant recognition |
(95,119) |
(111,560) |
(14.7) |
% |
(242,389) |
(111,560) |
117.3 |
% |
||||||||||||||
Other |
29,759 |
20,882 |
42.5 |
% |
52,721 |
63,618 |
(17.1) |
% |
||||||||||||||
Total |
392,306 |
208,968 |
87.7 |
% |
647,687 |
936,208 |
(30.8) |
% |
||||||||||||||
Operating Income (Loss) |
18,475 |
(148,964) |
(112.4) |
% |
(54,689) |
(317,060) |
(82.8) |
% |
||||||||||||||
Nonoperating Income (Expense): |
||||||||||||||||||||||
Interest expense and amortization of debt discounts and issuance costs |
(30,315) |
(8,221) |
(54,008) |
(15,016) |
||||||||||||||||||
Interest income |
1,345 |
2,766 |
2,594 |
5,786 |
||||||||||||||||||
Capitalized interest |
776 |
921 |
1,460 |
1,752 |
||||||||||||||||||
Gains (losses) on fuel derivatives |
— |
(184) |
217 |
(6,636) |
||||||||||||||||||
Loss on extinguishment of debt |
— |
— |
(3,994) |
— |
||||||||||||||||||
Other components of net periodic benefit cost |
981 |
387 |
1,962 |
725 |
||||||||||||||||||
Other, net |
444 |
774 |
21,340 |
2,740 |
||||||||||||||||||
Total |
(26,769) |
(3,557) |
(30,429) |
(10,649) |
||||||||||||||||||
Loss Before Income Taxes |
(8,294) |
(152,521) |
(85,118) |
(327,709) |
||||||||||||||||||
Income tax benefit |
(2,117) |
(45,617) |
(18,250) |
(76,433) |
||||||||||||||||||
Net Loss |
$ |
(6,177) |
$ |
(106,904) |
$ |
(66,868) |
$ |
(251,276) |
||||||||||||||
Net Loss Per Share |
||||||||||||||||||||||
Basic |
$ |
(0.12) |
$ |
(2.33) |
$ |
(1.33) |
$ |
(5.47) |
||||||||||||||
Diluted |
$ |
(0.12) |
$ |
(2.33) |
$ |
(1.33) |
$ |
(5.47) |
||||||||||||||
Weighted Average Number of Common Stock Shares Outstanding: |
||||||||||||||||||||||
Basic |
51,156 |
45,971 |
50,319 |
45,969 |
||||||||||||||||||
Diluted |
51,156 |
45,971 |
50,319 |
45,969 |
Hawaiian Holdings, Inc. Consolidated Balance Sheet (unaudited) |
||||||||
June 30, 2021 (unaudited) |
December 31, |
|||||||
(in thousands, except shares) |
||||||||
ASSETS |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ |
1,248,480 |
$ |
509,639 |
||||
Restricted cash |
31,820 |
— |
||||||
Short-term investments |
933,099 |
354,782 |
||||||
Accounts receivable, net |
63,829 |
67,527 |
||||||
Income taxes receivable |
94,508 |
95,002 |
||||||
Spare parts and supplies, net |
35,439 |
35,442 |
||||||
Prepaid expenses and other |
74,893 |
56,086 |
||||||
Total |
2,482,068 |
1,118,478 |
||||||
Property and equipment, less accumulated depreciation and amortization of $963,989 |
2,001,829 |
2,085,030 |
||||||
Other Assets: |
||||||||
Assets held for sale |
29,542 |
— |
||||||
Operating lease right-of-use assets |
582,040 |
627,359 |
||||||
Long-term prepayments and other |
107,157 |
133,663 |
||||||
Intangible assets, net |
13,500 |
13,500 |
||||||
Total Assets |
$ |
5,216,136 |
$ |
3,978,030 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current Liabilities: |
||||||||
Accounts payable |
$ |
109,058 |
$ |
112,002 |
||||
Air traffic liability and current frequent flyer deferred revenue |
823,074 |
533,702 |
||||||
Other accrued liabilities |
256,342 |
140,081 |
||||||
Current maturities of long-term debt, less discount |
141,536 |
115,019 |
||||||
Current maturities of finance lease obligations |
24,004 |
21,290 |
||||||
Current maturities of operating leases |
82,574 |
82,454 |
||||||
Total |
1,436,588 |
1,004,548 |
||||||
Long-Term Debt |
1,887,541 |
1,034,805 |
||||||
Other Liabilities and Deferred Credits: |
||||||||
Noncurrent finance lease obligations |
112,932 |
120,618 |
||||||
Noncurrent operating leases |
461,822 |
503,376 |
||||||
Accumulated pension and other post-retirement benefit obligations |
211,976 |
217,737 |
||||||
Other liabilities and deferred credits |
83,022 |
78,908 |
||||||
Noncurrent frequent flyer deferred revenue |
212,326 |
201,239 |
||||||
Deferred tax liability, net |
199,455 |
216,642 |
||||||
Total |
1,281,533 |
1,338,520 |
||||||
Commitments and Contingencies |
||||||||
Shareholders' Equity: |
||||||||
Special preferred stock, $0.01 par value per share, three shares issued and |
— |
— |
||||||
Common stock, $0.01 par value per share, 51,207,816 and 48,145,093 shares |
512 |
481 |
||||||
Capital in excess of par value |
265,654 |
188,593 |
||||||
Accumulated income |
458,742 |
525,610 |
||||||
Accumulated other comprehensive loss, net |
(114,434) |
(114,527) |
||||||
Total |
610,474 |
600,157 |
||||||
Total Liabilities and Shareholders' Equity |
$ |
5,216,136 |
$ |
3,978,030 |
Hawaiian Holdings, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) |
||||||||
Six months ended June 30, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Net cash provided by Operating Activities |
$ |
417,277 |
$ |
3,458 |
||||
Cash flows from Investing Activities: |
||||||||
Additions to property and equipment, including pre-delivery payments |
(17,886) |
(93,956) |
||||||
Proceeds from the disposition of aircraft related equipment |
117 |
— |
||||||
Purchases of investments |
(862,001) |
(64,215) |
||||||
Sales of investments |
280,007 |
143,679 |
||||||
Net cash used in investing activities |
(599,763) |
(14,492) |
||||||
Cash flows from Financing Activities: |
||||||||
Proceeds from the issuance of common stock |
68,132 |
— |
||||||
Long-term borrowings |
1,251,705 |
283,964 |
||||||
Repayments of long-term debt and finance lease obligations |
(342,151) |
(39,129) |
||||||
Dividend payments |
— |
(5,514) |
||||||
Debt issuance costs |
(24,664) |
— |
||||||
Repurchases of common stock |
— |
(7,510) |
||||||
Payment for taxes withheld for stock compensation |
(1,712) |
(1,313) |
||||||
Other |
1,837 |
— |
||||||
Net cash provided by financing activities |
953,147 |
230,498 |
||||||
Net increase in cash and cash equivalents |
770,661 |
219,464 |
||||||
Cash, cash equivalents, and restricted cash - Beginning of Period |
509,639 |
373,056 |
||||||
Cash, cash equivalents, and restricted cash - End of Period |
$ |
1,280,300 |
$ |
592,520 |
Table 2. Hawaiian Holdings, Inc. Selected Statistical Data (unaudited) |
||||||||||||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||||||||
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
|||||||||||||||||
(in thousands, except as otherwise indicated) |
||||||||||||||||||||||
Scheduled Operations (a) : |
||||||||||||||||||||||
Revenue passengers flown |
1,723 |
182 |
846.7 |
% |
2,456 |
2,542 |
(3.4) |
% |
||||||||||||||
Revenue passenger miles (RPM) |
2,764,719 |
95,084 |
2,807.7 |
% |
3,818,847 |
3,806,558 |
0.3 |
% |
||||||||||||||
Available seat miles (ASM) |
3,546,316 |
409,490 |
766.0 |
% |
6,012,358 |
5,384,460 |
11.7 |
% |
||||||||||||||
Passenger revenue per RPM (Yield) |
12.89 |
¢ |
31.30 |
¢ |
(58.8) |
% |
12.93 |
¢ |
14.01 |
¢ |
(7.7) |
% |
||||||||||
Passenger load factor (RPM/ASM) |
78.0 |
% |
23.2 |
% |
54.8 |
pts. |
63.5 |
% |
70.7 |
% |
(7.2) |
pts. |
||||||||||
Passenger revenue per ASM (PRASM) |
10.05 |
¢ |
7.27 |
¢ |
38.2 |
% |
8.21 |
¢ |
9.90 |
¢ |
(17.1) |
% |
||||||||||
Total Operations (a) : |
||||||||||||||||||||||
Revenue passengers flown |
1,730 |
182 |
850.5 |
% |
2,466 |
2,544 |
(3.1) |
% |
||||||||||||||
Revenue passenger miles (RPM) |
2,789,129 |
95,084 |
2,833.3 |
% |
3,851,446 |
3,809,858 |
1.1 |
% |
||||||||||||||
Available seat miles (ASM) |
3,586,928 |
409,490 |
776.0 |
% |
6,068,574 |
5,389,019 |
12.6 |
% |
||||||||||||||
Operating revenue per ASM (RASM) |
11.45 |
¢ |
14.65 |
¢ |
(21.8) |
% |
9.77 |
¢ |
11.49 |
¢ |
(15.0) |
% |
||||||||||
Operating cost per ASM (CASM) |
10.94 |
¢ |
51.03 |
¢ |
(78.6) |
% |
10.67 |
¢ |
17.37 |
¢ |
(38.6) |
% |
||||||||||
CASM excluding aircraft fuel and non-recurring items (b) |
11.00 |
¢ |
68.26 |
¢ |
(83.9) |
% |
12.35 |
¢ |
14.22 |
¢ |
(13.2) |
% |
||||||||||
Aircraft fuel expense per ASM (c) |
2.34 |
¢ |
1.70 |
¢ |
37.6 |
% |
2.17 |
¢ |
2.23 |
¢ |
(2.7) |
% |
||||||||||
Revenue block hours operated |
39,250 |
6,496 |
504.2 |
% |
66,245 |
59,355 |
11.6 |
% |
||||||||||||||
Gallons of jet fuel consumed |
44,442 |
7,759 |
472.8 |
% |
74,388 |
71,580 |
3.9 |
% |
||||||||||||||
Average cost per gallon of jet fuel (actual) (c) |
$ |
1.89 |
$ |
0.90 |
110.0 |
% |
$ |
1.77 |
$ |
1.68 |
5.4 |
% |
||||||||||
Economic fuel cost per gallon (c)(d) |
$ |
1.89 |
$ |
1.26 |
50.0 |
% |
$ |
1.77 |
$ |
1.76 |
0.6 |
% |
(a) |
Includes the operations of the Company's contract carrier under a capacity purchase agreement. |
(b) |
See Table 4 for a reconciliation of GAAP operating expenses to operating expenses excluding aircraft fuel and non-recurring items. |
(c) |
Includes applicable taxes and fees. |
(d) |
See Table 3 for a reconciliation of GAAP fuel costs to economic fuel costs. |
Table 3.
Hawaiian Holdings, Inc.
Economic Fuel Expense (unaudited)
The Company believes that economic fuel expense is a good measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period. The Company defines economic fuel expense as GAAP fuel expense plus losses/(gains) realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period.
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||||||||
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
|||||||||||||||||
(in thousands, except per-gallon amounts) |
||||||||||||||||||||||
Aircraft fuel expense, including taxes and delivery |
$ |
83,840 |
$ |
7,003 |
1,097.2 |
% |
$ |
131,576 |
$ |
120,481 |
9.2 |
% |
||||||||||
Realized losses on settlement of fuel derivative contracts |
— |
2,751 |
(100.0) |
% |
165 |
5,837 |
(97.2) |
% |
||||||||||||||
Economic fuel expense |
$ |
83,840 |
$ |
9,754 |
759.5 |
% |
$ |
131,741 |
$ |
126,318 |
4.3 |
% |
||||||||||
Fuel gallons consumed |
44,442 |
7,759 |
472.8 |
% |
74,388 |
71,580 |
3.9 |
% |
||||||||||||||
Economic fuel costs per gallon |
$ |
1.89 |
$ |
1.26 |
50.0 |
% |
$ |
1.77 |
$ |
1.76 |
0.6 |
% |
Table 4.
Hawaiian Holdings, Inc.
Non-GAAP Financial Reconciliation (unaudited)
The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including net income (loss), operating expenses, diluted net income per share, CASM, PRASM, RASM, Passenger Revenue per RPM, EBITDA, and pre-tax margin. Pursuant to Regulation G, the Company has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis. The adjustments are described below:
- During the three and six months ended June 30, 2020, the effective tax rate included a tax benefit of $9.2 million and $23.4 million, respectively, resulting from the rate differential between the prevailing tax rate of 21% during the years that generated net operating losses and the previous tax rate of 35% that was in effect during the years to which net operating losses were carried back as a result of the enactment of the Coronavirus Aid Relief and Economic Security (CARES) Act.
- During the three and six months ended June 30, 2020, the Company recognized $111.6 million in contra-expense related to grant proceeds under the PSP Extension Agreement. During the three and six months ended June 30, 2021, the Company recognized $95.1 million and $245.2 million, respectively in contra-expense related to grant proceeds under the PSP Extension Agreement. The grant proceeds were recognized in proportion to estimated wages and benefits expense over the period the PSP Extension Agreement covers. The Company expects to fully recognize the remaining grant proceeds by the end of the third quarter 2021.
- Loss on extinguishment of debt is excluded to allow investors to better analyze our core operational performance and more readily compare our results to other airlines in the periods presented below.
- Changes in fair value of fuel derivative contracts, net of tax, are based on market prices for open contracts as of the end of the reporting period, and include the unrealized amounts of fuel derivatives (not designated as hedges) that will settle in future periods and the reversal of prior period unrealized amounts.
- Unrealized loss (gain) on foreign debt is based on fluctuation in exchange rates and the measurement of foreign-denominated debt to our functional currency.
- Changes in fair value of foreign currency derivative contracts, net of tax, are based on market prices for open contracts as of the end of the reporting period, including the unrealized amounts of foreign currency derivatives (not designated as hedges) that will settle in future periods and the reversal of prior period unrealized amounts.
- The Company recorded the following as special items:
- During the three months ended March 31, 2020, a charge of $20.2 million was recorded for the ratification of a collective bargaining agreement with the Association of Flight Attendants in April 2020 (related to service prior to January 1, 2020).
- During the three months ended March 31, 2020, a special charge of $106.7 million was recorded for goodwill impairment resulting from the decline in the market value of the Company's equity (i.e., share price), and the Company's inability to support the carrying value of goodwill on its financial statements.
- During the three months ended June 30, 2021, a special charge of $9.0 million was recorded for the termination of the Company's 'Ohana by Hawaiian passenger and cargo operations, which operated under a Capacity Purchase Agreement (CPA) with a third party carrier. The charge included $6.4 million related to the write-down of the asset group and $2.6 million related to the early termination of the CPA.
- During the six months ended June 30, 2020, the Company recorded special items of $34.0 million comprised of the following: (a) an impairment charge of $27.5 million to fair value the Company's ATR-42 and ATR-72 fleets, (b) an impairment charge of $3.4 million to fair value the Company's commercial real estate assets, and (c) an approximately $3.1 million write-off for discontinued software-related projects as a result of the COVID-19 pandemic.
The Company believes that adjusting for the impact of an effective tax rate differential, the recognition of grant proceeds, changes in fair value of fuel and foreign currency derivative contracts, fluctuations in exchange rates on debt instruments denominated in foreign currency, special items and the loss recognized on the extinguishment of debt helps investors better analyze the Company's operational performance and compare its results to other airlines in the periods presented.
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||||||||||||
Total |
Diluted Net |
Total |
Diluted Net |
Total |
Diluted Net |
Total |
Diluted Net |
|||||||||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||||||||||||||||
GAAP Net Loss, as reported |
$ |
(6,177) |
$ |
(0.12) |
$ |
(106,904) |
$ |
(2.33) |
$ |
(66,868) |
$ |
(1.33) |
$ |
(251,276) |
$ |
(5.47) |
||||||||||||||||
Adjusted for: |
||||||||||||||||||||||||||||||||
CARES Act carryback of additional NOLs |
— |
— |
(9,238) |
(0.20) |
— |
— |
(23,394) |
(0.51) |
||||||||||||||||||||||||
Government grant recognition |
(95,119) |
(1.86) |
(111,560) |
(2.43) |
(242,389) |
(4.82) |
(111,560) |
(2.43) |
||||||||||||||||||||||||
Loss on debt extinguishment |
— |
— |
— |
— |
3,994 |
0.08 |
— |
— |
||||||||||||||||||||||||
Changes in fair value of fuel derivative contracts |
— |
— |
(2,567) |
(0.06) |
(382) |
(0.01) |
799 |
0.02 |
||||||||||||||||||||||||
Unrealized (gains) losses on foreign debt |
92 |
— |
1,679 |
0.04 |
(18,951) |
(0.38) |
2,422 |
0.05 |
||||||||||||||||||||||||
Unrealized (gains) losses on non-designated foreign exchange positions |
397 |
0.01 |
612 |
0.01 |
(1,352) |
(0.03) |
(200) |
— |
||||||||||||||||||||||||
Special items |
8,983 |
0.18 |
34,014 |
0.74 |
8,983 |
0.18 |
160,918 |
3.50 |
||||||||||||||||||||||||
Tax effect of adjustments |
17,986 |
0.35 |
19,253 |
0.42 |
52,520 |
1.04 |
13,430 |
0.29 |
||||||||||||||||||||||||
Adjusted net loss |
$ |
(73,838) |
$ |
(1.44) |
$ |
(174,711) |
$ |
(3.81) |
$ |
(264,445) |
$ |
(5.27) |
$ |
(208,861) |
$ |
(4.55) |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||||||||
Total |
Margin |
Total |
Margin |
Total |
Margin |
Total |
Margin |
|||||||||||||||||||||
(in thousands, except margin data) |
||||||||||||||||||||||||||||
Loss Before Income Taxes, as reported |
$ |
(8,294) |
(2.0) |
% |
$ |
(152,521) |
(254.2) |
% |
$ |
(85,118) |
(14.4) |
% |
$ |
(327,709) |
(52.9) |
% |
||||||||||||
Adjusted for: |
||||||||||||||||||||||||||||
Government grant recognition |
(95,119) |
(23.2) |
(111,560) |
(185.9) |
(242,389) |
(40.8) |
(111,560) |
(18.0) |
||||||||||||||||||||
Loss on debt extinguishment |
— |
— |
— |
— |
3,994 |
0.7 |
— |
— |
||||||||||||||||||||
Changes in fair value of fuel derivative contracts |
— |
— |
(2,567) |
(4.3) |
(382) |
(0.1) |
799 |
0.1 |
||||||||||||||||||||
Unrealized (gains) losses on foreign debt |
92 |
— |
1,679 |
2.8 |
(18,951) |
(3.2) |
2,422 |
0.3 |
||||||||||||||||||||
Unrealized (gains) losses on non-designated foreign exchange positions |
397 |
0.1 |
612 |
1.0 |
(1,352) |
(0.2) |
(200) |
— |
||||||||||||||||||||
Special items |
8,983 |
2.2 |
34,014 |
56.7 |
8,983 |
1.5 |
160,918 |
26.0 |
||||||||||||||||||||
Adjusted Loss Before Income Taxes |
$ |
(93,941) |
(22.9) |
% |
$ |
(230,343) |
(383.9) |
% |
$ |
(335,215) |
(56.5) |
% |
$ |
(275,330) |
(44.5) |
% |
Operating Costs per Available Seat Mile (CASM)
The Company has separately listed in the table below its fuel costs per ASM and non-GAAP unit costs, excluding fuel and non-recurring items. These amounts are included in CASM, but for internal purposes the Company consistently uses cost metrics that exclude fuel and non-recurring items (if applicable) to measure and monitor its costs.
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
(in thousands, except CASM data) |
||||||||||||||||
GAAP Operating Expenses |
$ |
392,306 |
$ |
208,968 |
$ |
647,687 |
$ |
936,208 |
||||||||
Adjusted for: |
||||||||||||||||
Government grant recognition |
95,119 |
111,560 |
242,389 |
111,560 |
||||||||||||
Special items |
(8,983) |
(34,014) |
(8,983) |
(160,918) |
||||||||||||
Operating Expenses excluding non-recurring items |
$ |
478,442 |
$ |
286,514 |
$ |
881,093 |
$ |
886,850 |
||||||||
Aircraft fuel, including taxes and delivery |
(83,840) |
(7,003) |
(131,576) |
(120,481) |
||||||||||||
Operating Expenses excluding fuel and non-recurring items |
$ |
394,602 |
$ |
279,511 |
$ |
749,517 |
$ |
766,369 |
||||||||
Available Seat Miles |
3,586,928 |
409,490 |
6,068,574 |
5,389,019 |
||||||||||||
CASM - GAAP |
10.94 |
¢ |
51.03 |
¢ |
10.67 |
¢ |
17.37 |
¢ |
||||||||
Aircraft fuel, including taxes and delivery |
(2.34) |
(1.70) |
(2.17) |
(2.23) |
||||||||||||
Government grant recognition |
2.65 |
27.24 |
3.99 |
2.07 |
||||||||||||
Special items |
(0.25) |
(8.31) |
(0.14) |
(2.99) |
||||||||||||
CASM excluding fuel and non-recurring items |
11.00 |
¢ |
68.26 |
¢ |
12.35 |
¢ |
14.22 |
¢ |
Operating Expenses Excluding Non-recurring Items Outlook
The Company excludes non-recurring items from its operating expense outlook for the same reasons as described above.
Estimated three months ending |
||||||||
(in thousands) |
||||||||
GAAP operating expenses |
$ |
471,123 |
- |
$ |
496,663 |
|||
Adjusted for: |
||||||||
Non-recurring items |
(78,000) |
- |
(78,000) |
|||||
Operating expenses, excluding non-recurring items |
$ |
549,123 |
- |
$ |
574,663 |
Adjusted EBITDA
The Company believes that adjusting earnings for interest, taxes, depreciation and amortization, non-recurring operating expenses (such as changes in unrealized gains and losses on financial instruments) and one-time charges helps investors better analyze the Company's financial performance by allowing for company-to-company and period-over-period comparisons that are unaffected by company-specific or one-time occurrences.
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
(in thousands) |
||||||||||||||||
Net Loss |
$ |
(6,177) |
(106,904) |
$ |
(66,868) |
(251,276) |
||||||||||
Income tax benefit |
(2,117) |
(45,617) |
(18,250) |
(76,433) |
||||||||||||
Depreciation and amortization |
35,113 |
39,333 |
70,469 |
78,782 |
||||||||||||
Interest expense and amortization of debt discounts and issuance costs |
30,315 |
8,221 |
54,008 |
15,016 |
||||||||||||
EBITDA, as reported |
57,134 |
(104,967) |
39,359 |
(233,911) |
||||||||||||
Adjusted for: |
||||||||||||||||
Government grant recognition |
(95,119) |
(111,560) |
(242,389) |
(111,560) |
||||||||||||
Changes in fair value of fuel derivative instruments |
— |
(2,567) |
(382) |
799 |
||||||||||||
Unrealized gain on non-designated foreign exchange positions |
397 |
612 |
(1,352) |
(200) |
||||||||||||
Unrealized (gains) losses on foreign debt |
92 |
1,679 |
(18,951) |
2,422 |
||||||||||||
Special items |
8,983 |
34,014 |
8,983 |
160,918 |
||||||||||||
Loss on extinguishment of debt |
— |
— |
3,994 |
— |
||||||||||||
Adjusted EBITDA |
$ |
(28,513) |
$ |
(182,789) |
$ |
(210,738) |
$ |
(181,532) |
||||||||
SOURCE Hawaiian Holdings, Inc.
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