Hawaiian Airlines continues to ride a wave of positive unit revenue momentum, outshining competitors

As most US airlines suffered from a negative unit revenue performance during the past year, Hawaiian Airlines enjoyed positive results in that metric. This result was driven by its unique geography and benign industry capacity growth in its markets that appears to be continuing throughout most of 2017. As many US airlines believe they will finally recover to a positive unit revenue result in 2Q2017, Hawaiian expects another strong performance in that metric, despite continued capacity pressure in its interisland markets. Despite tougher year-on-year unit revenue comparisons as 2017 progresses, Hawaiian believes much upside remains in the sales of premium products.

Due to the timing of new Airbus A321neo deliveries, Hawaiian's capacity growth targets for 2017 have moved around. But the airline now believes its supply should increase between 2% and 5% as Hawaiian works to adjust its fleet to meet higher levels of travel demand at YE2017.

Hawaiian was one of the few US airlines that actually posted an increase in pretax margins year-on-year in 1Q2017, and it appears as if the company's valuation in 2Q2017 is reaping some rewards from that performance.