Hawaiian Holdings Inc., parent company of Hawaiian Airlines has reported its financial results for the first quarter of 2023.
“A big mahalo to our team who continue to make us a stronger, better airline. The demand for leisure travel remains strong in the domestic markets we serve, and we see similar conditions in most of our international markets,” said Hawaiian Airlines President and CEO Peter Ingram.
“In recent days, our team completed a significant technology initiative, one of many projects underway in 2023 that position us for a bright future. We look forward to sustaining momentum on these initiatives and returning Hawaiian to profitability,” Ingram stated.
Let’s take a look at some of the challenges the airline faced in the first quarter of the year, and some of the achievements which look to set Hawaiian on a firm path moving forward through the year.
Revenue Environment
As the aviation sector emerges from the extended pandemic hiatus, and re-establishes network links, Hawaiian airlines have benefited particularly by the continued robust demand from the contiguous United States.
As well as the continuing strong leisure demand from North America to Hawaiʻi, the carrier continued the restoration of its international network excluding Japan. International traffic was buoyed by strong U.S. point of sale activity.
Demand remained strong for premium products both domestically and internationally. The Company’s overall operating revenue for the first quarter 2023 was up 28.4% from the first quarter 2022.
This was achieved on 15.4% higher capacity as Hawaiian recovered from the effects of the Omicron variant of COVID-19, which had significantly impacted results in the first quarter 2022.
Other revenue was down 12.4% compared to the first quarter of 2022 driven by a decrease in cargo revenue.
Operational Environment
Several challenges continued to negatively affect the environment in which the Company operates. Typically, these challenges have revolved around in the ongoing problem experienced by the industry in general with respect to spares and components supply issues.
A321 fleet issues
Constraints on the availability of A321 aircraft due to Pratt & Whitney engine delays was a strong influencing factor on the carriers first quarter results.
Limitations on Hawaiian’s A321 fleet availability necessitated the substitution of A330 aircraft, which are less fuel efficient, on some A321 routes.
Subsequently, fuel consumption for the first quarter 2023 was up 21.4% as compared to the first quarter of 2022 due to higher capacity and the inefficiencies resulting from these challenges.
In addition to the knock-on effect created by engine delay issues, airport infrastructure was a further factor which presented a challenge for the airline.
Airport infrastructure issues
The ongoing runway construction at Daniel K. Inouye International Airport in Honolulu (“HNL”), and delays related to air traffic control protocols disrupted Hawaiian’s on-time performance, impaired its scheduling, and adversely affected its financial results.
First Quarter 2023 Highlights
Overall, Hawaiian airlines listed in number of significant highlights across the beginning of 2023. These bode well for the carrier’s progress through the coming year, and we note some of the key passenger and operational highlights here.
Technology Advancement
- Transitioned its Passenger Service System to Amadeus’ Altea platform marking a significant information technology (“IT”) accomplishment for the Company in April; this new platform will enable the Company to be more commercially and operationally nimble
Routes and Network
- Operated at 115% of its 2022 first quarter capacity, comprised of 98%, 119%, and 275% capacity on its North America, Neighbor Island and International routes, respectively
- Announced an increase in summer weekly frequencies between Honolulu and Austin, Boston, Las Vegas, and Pago Pago in preparation for strong summer demand to Hawai’i as well as a fourth daily flight between Honolulu and Los Angeles twice per week
- Announced resumption of service between Honolulu and Fukuoka beginning April 28 with thrice-weekly service
Guest Experience
- Streamlined the Honolulu travel experience with the opening of a new TSA security checkpoint at HNL, which added 1,000 square feet for passenger queuing and 3,000 square feet of screening area; expanded screening capacity alleviates congestion and benefits all guests whether they are flying to a neighbor island or boarding a transpacific flight.
Summary
CEO Peter Ingram remarked on sustaining momentum on these initiatives, as the airline continues the path towards a return to profitability.
Despite clear operational challenges experienced in the start to the year, Hawaiian seem to be laying a firm foundation from which to build on.
