Hawaiian Airlines announced (17-Sep-2009) plans to put the first two of its new A330 aircraft into service on the Honolulu-Los Angeles sector from Jun-2010. The carrier also plans to launch Maui-Oakland and Maui-San Diego services on 17-Jun-2010 - see Route Changes Table for more information. [more]
Hawaiian to debut A330 on Los Angeles route
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Hawaiian Airlines: favourable revenue trends, but aircraft delivery delays add cost pressure
Hawaiian Airlines is maintaining a positive outlook for 2017, despite cost pressure and delays in delivery of the first Airbus A321neo aircraft to join the company’s fleet. The airline is a huge proponent of the new generation narrowbody, touting the jet as the only aircraft that serves its mission of serving secondary North American markets at the right cost point. Because of the delays Hawaiian faces the undesirable situation of incurring the costs of adding the A321s to its fleet without enjoying any revenue benefit from their operation.
The delays may intensify the cost pressure Hawaiian already faces in 2017, and its current guidance does not include any effects from a potential collective bargaining agreement it could reach with its pilots. Hawaiian is not alone in facing cost pressure in 2017; nearly every US airline is bracing for non fuel unit cost challenges alongside rising oil prices.
But the unit revenue momentum Hawaiian enjoyed throughout most of 2016 is continuing into early 2017 as industry capacity to Hawaii remains rational, and its own growth is largely driven by new long haul routes introduced in late 2016. But it will be tough for Hawaiian, and the industry in general, to sustain a revenue performance that offsets the cost pressure that most US airlines, Hawaiian included, face in 2017.
Hawaiian Airlines bolsters its balance sheet strength ahead of a capex spike in 2017
During the first of half of the decade Hawaiian Airlines’ business strategy was marked by significant long haul growth that required equally meaningful cash outlays. As a result, the company undertook significant borrowings and invested all of the cash that it generated back into the business.
Over the past two years Hawaiian’s growth has slowed, its long haul routes have matured and overall competitive dynamics in the airline’s markets have tilted in its favour. Those factors, along with others, have resulted in Hawaiian posting a robust financial performance. This has allowed Hawaiian to slash debt and improve its leverage, leading to a markedly stronger balance sheet.
Now Hawaiian is in a position to determine the optimal cash balances for its business. The company also continues to study allocation of its cash, but with a spike in capital expenditures in 2017 spurred by aircraft acquisitions Hawaiian is not gearing up for a massive change in shareholder returns.