Hawaiian Airlines' long-haul routes deliver weak results, challenging rapid expansion strategy

Questions are being raised over exactly when numerous long-haul markets introduced by Hawaiian Airlines during the last three years will reach maturity and cease being a drag on the carrier's network.

The airline's tempered capacity growth during FY2014 is a welcome sign. But other metrics are not as encouraging. Hawaiian has refined unit costs guidance upwards for 2014, citing several factors including the launch of its new inter-island turboprop operator Ohana, aircraft reconfigurations to support a new extra-legroom product and a rise in labour costs resulting from the hiring of additional pilots to comply with new US flight and duty time rules.

Hawaiian is beginning to field requests about when it will be in a position to consider shareholder returns. The carrier doesn't expect to generate positive free cash flow until 2015, which can be an eternity for investors eager to see some return on their investment. The company assures that it is ending a period of heavy investment that will pay off over the long term. But in the short term Hawaiian may find itself having to defend its strategy to impatient shareholders.