Hawaiian Airlines' favourable geography helps it post a PRASM performance that outshines its peers

Hawaiian Airlines' unique geographical positioning is helping the airline to deliver a passenger unit revenue performance that is outstripping its peers, who are more exposed to a lack of pricing traction and growing capacity on many domestic routes on the US mainland. Demand to Hawaii remains solid and competitive capacity growth in Hawaiian's markets remains reasonable.

Hawaiian's capacity expansion has been tempered during the last couple of years after a massive push into long haul markets earlier in the decade. Its planned capacity growth for 2016 is 2.5% to 5.5%, and expansion in 2017 is expected to remain in the low single digits. The airline plans to use existing capacity to support additional services to Tokyo Haneda, which will allow the airline to improve its service offering in one its most important markets - Hawaiian estimates that Hawaii is the end destination for one in four passengers travelling from Japan to the US.

Alaska Air Group's intention to purchase Virgin America and merge with its rival has fuelled speculation about other potential M&A deals in the US market. Hawaiian believes that its attributes could create value for another company but stresses that it is not for sale, and many opportunities remain for the airline to grow independently.