Shortly after Hawaiian Airlines outlined its plans forge a codesharing partnership and an eventual joint venture with Japan Airlines, Southwest Airlines moved closer to launching service to Hawaii, declaring it would serve the islands at some point – possibly in 2018 or 2019. Southwest’s aspirations for Hawaii along with United’s planned boost in capacity to Hawaii have pressured Hawaiian’s valuation, even as its revenue performance has outpaced most US airlines for more than a year.
Hawaiian’s management has clearly determined that the company is undervalued, and has decided to buy back USD46 million of stock in 3Q2017, planning to pay USD12 cent per share dividend in Nov-2017.
Hawaiian’s message regarding changing competitive dynamics remains clear – the airline believes higher numbers of premium seats and the quality of its brand position it favourably to withstand the latest competitive onslaught. It is not the first time Hawaiian has faced competitive capacity pressure; but markets remain jittery about changes in Hawaiian’s North American markets, which still represent the bulk of the airline’s revenue.
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