Hawaiian Holdings, Inc. (NASDAQ: HA) (the “Company”), parent company of Hawaiian Airlines, Inc. (“Hawaiian”), today reported its financial results for the fourth quarter and full year 2022.
“A heartfelt mahalo to our team as they tirelessly worked through a year in which we had multiple projects in motion that make us a stronger, better airline,” said Hawaiian Airlines President and CEO Peter Ingram. “I am incredibly proud of what our team members do to care for our company, our guests and each other. We saw continued strong demand in our domestic markets and recovery in our international markets illustrating that Hawaiʻi is a top destination and we are the carrier of choice. I am excited to see what we can accomplish in 2023 as we continue to build a solid foundation for our future.”
| Fourth Quarter 2022 – Key Financial Metrics and Results | ||||||||
| GAAP | Yo3Y Change | Adjusted (a) | Yo3Y Change | |||||
| Net Loss | ($50.2M) | ($99.9M) | ($24.7M) | ($70.6M) | ||||
| Diluted EPS | ($0.98) | ($2.05) | ($0.49) | ($1.49) | ||||
| Pre-tax Margin | (8.6) % | (18.2) pts. | (4.3) % | (13.2) pts. | ||||
| EBITDA | ($6.1M) | ($120.3M) | $25.6M | ($83.4M) | ||||
| Operating Cost per ASM | 15.46¢ | 3.30¢ | 10.89¢ | 1.35¢ |
| Full Year 2022 – Key Financial Metrics and Results | ||||||||
| GAAP | Yo3Y Change | Adjusted (a) | Yo3Y Change | |||||
| Net Loss | ($240.1M) | ($464.1M) | ($210.5M) | ($429.3M) | ||||
| Diluted EPS | ($4.67) | ($9.38) | ($4.08) | ($8.68) | ||||
| Pre-tax Margin | (11.1) % | (21.9) pts. | (10.0) % | (20.5) pts. | ||||
| EBITDA | ($61.9M) | ($553.6M) | ($31.0M) | ($515.8M) | ||||
| Operating Cost per ASM | 15.26¢ | 3.10¢ | 10.78¢ | 1.24¢ | ||||
| (a) See Table 4 for a reconciliation of adjusted net loss, adjusted diluted EPS, adjusted pre-tax margin, adjusted EBITDA, and adjusted operating cost per ASM (CASM excluding fuel and non-recurring items) to each of their respective most directly comparable GAAP financial measure. |
Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.
Liquidity and Capital Resources
As of December 31, 2022 the Company had:
- Unrestricted cash, cash equivalents and short-term investments of $1.4 billion
- Outstanding debt and finance lease obligations of $1.7 billion
- Air traffic liability of $590.8 million
- Liquidity of $1.6 billion , including an undrawn revolving credit facility of $235 million
Revenue Environment
The strength of the leisure market was evident as Hawaiian saw robust demand in its U.S. Mainland to Hawaiʻi routes and international routes excluding Japan. Demand remained strong for premium products and there was positive momentum in sales of its Extra Comfort product and newer preferred seat option. The Company's overall operating revenue for the fourth quarter 2022 was up 3.2% compared to the fourth quarter 2019 on 6% lower capacity. The Company's overall operating revenue for 2022 was down 6.7% from 2019 on 9.3% lower capacity as the impacts of Omicron were experienced industry wide in most of the first quarter.
Other revenue for fourth quarter 2022 was up 35.1% compared to the same period in 2019 and for the full year 2022 up 30.4% compared to 2019 driven by cargo revenue and sales of HawaiianMiles.
2022 Highlights
Routes and scheduled services
- Operated at 91% of its 2019 capacity, comprised of 115%, 79%, and 44% capacity on its North America , Neighbor Island, and International routes, respectively
- Resumed international flights, between Honolulu , Hawaiʻi and Auckland, New Zealand , and Honolulu , Hawaiʻi and Tokyo Haneda Airport
- Signed agreement with Amazon to operate and maintain an initial fleet of 10 Airbus A330-300 freighters to move cargo between airports near Amazon's distribution facilities starting in the fall of 2023
- Announced a new nonstop flight between Honolulu and Rarotonga, Cook Islands , which will launch in May 2023 , providing travelers from Hawaiian's 15 U.S. Mainland gateway cities convenient one-stop connection to the Cook Islands
Guest experience
- Announced agreement with Starlink to provide complimentary industry leading satellite internet connectivity to every guest onboard flights between Hawaiʻi and the continental U.S., Asia , and Oceania starting in 2023
- Introduced the benefit of two free checked bags for primary cardmembers who purchase their tickets directly with the Company in partnership with Barclays, its co-brand credit card issuer
- Established a new interline agreement with Mokulele to facilitate travel bookings and connections for passengers connecting from Mokulele-served airports to any Hawaiian Airlines destination worldwide in a single transaction
Fleet and financing
- Entered into an agreement with Boeing to purchase 2 additional Boeing 787-9 aircraft, bringing the Company's total order to 12 aircraft, the first of which is scheduled for delivery in the fourth quarter of 2023
- Amended and extended $235 million revolving credit facility that matures in December 2025
- Repurchased the remaining $62.4 million of outstanding Series-2020-1A and Series-2020- 1B Equipment Notes
People
- Received ratification by Hawaiian's employees represented by the International Association of Machinists and Aerospace Workers for five-year contracts that provide for wage increases and important work rule changes for nearly 2,500 employees
- Received ratification by Hawaiian's employees represented by the Transport Workers Union of America for a five-year contract that provides wage increases and important work rule changes for 55 employees
Awards and Recognition
- Recognized by Conde Nast's 2022 Readers Choice Awards as one of The Best Airlines in the United States
- Named by Forbes' 2022 America's Best Employers by State rankings as Hawai'i's Best Employer
- Awarded by Travel + Leisure's World's Best Award as the Best Domestic Airline
Environmental, Social and Corporate Governance
In May 2022 , the Company issued its 2022 Corporate Kuleana (Responsibility) Report, providing updates on Environmental, Social and Governance (“ESG”) initiatives, including new commitments to replace single-use plastics in cabin service by 2029 and to locally source 40% of food and beverage for its Hawai'i-based catering operations by 2025. Other accomplishments in 2022 include the following:
- Engaged over 1250 volunteers comprised of almost 800 employees and over 450 of their family members who donated almost 6800 hours of community service work for almost 150 organizations throughout Hawaiʻi
- Raised more than $33,000 for the Friends of Hakalau Forest National Wildlife Refuge, a group supporting the preservation, protection, and restoration of native forest lands in the Hakalau National Wildlife Refuge on Hawaiʻi island through the annual Hawaiian Airlines Holoholo Challenge
- Donated $117,550 through Hawaiian Airlines Foundation including a $100,000 grant to Kāko'o ‘Ōiwi, a nonprofit organization dedicated to advancing the cultural, spiritual and traditional practices of the Native Hawaiian community
- Expanded decarbonization efforts through research into sustainable aviation fuel with Par Hawaii and a partnership with REGENT, a developer of all-electric seagliders
The Company continues to focus on creating long-term value and positively impacting the people, the environment and the communities it serves. The Company will publish its fourth annual Corporate Kuleana Report in the spring of 2023, highlighting its ESG commitments.
Other
Signed a tentative agreement with the Air Line Pilots Association in January 2023 subject to ratification by the Company's pilots.
First Quarter 2023 Outlook
2023 presents challenges in the core markets in which Hawaiian operates. In building a strong foundation for the future that will make the Company a better airline, it is focused on completing an extensive list of initiatives which include preparing for the launch of freighter operations for Amazon, going live with its new Passenger Service System, offering industry-leading internet connectivity service on its transpacific flights, placing mobile technology in the hands of its guest-facing employees, and flying its new Boeing 787-9 aircraft.
The table below summarizes the Company's expectations for the quarter ending March 31, 2023 expressed as an expected percentage change compared to the results for the quarter ended March 31, 2022 .
| Item | First Quarter 2023 Guidance | GAAP Equivalent | GAAP First Quarter 2023 Guidance | |||
| Available Seat Miles (ASMs) | Up 14.0% to up 17.0% | |||||
| Operating Revenue per ASM (RASM) | Up 7.5% to up 10.5% | |||||
| CASM excluding fuel and non-recurring items (a) | Down 1.0% to up 2.0% | Costs per ASM | Up 1.4% to up 3.6% | |||
| Gallons of Jet Fuel Consumed | Up 17.0% to up 20.0% | |||||
| Economic Fuel Price per Gallon (a)(b) | $3.10 | Average fuel price per gallon, including taxes and delivery | $3.08 | |||
| Effective Tax Rate | ~21% |
Full Year 2023 Outlook
The table below summarizes the Company's expectations for the full year ending December 31, 2023 expressed as an expected percentage change compared to the results for the year ended December 31, 2022 .
The Company expects its effective tax rate for the full year ending December 31, 2023 to be approximately 21% percent.
| Item | Full Year 2023 Guidance | GAAP Equivalent | GAAP Full Year 2023 Guidance | |||
| ASMs | Up 9.5% to up 12.5% | |||||
| CASM excluding fuel and non-recurring items (a) | Up 1.0% to up 5.0% | Costs per ASM | Down 0.4% to up 2.6% | |||
| Gallons of Jet Fuel Consumed | Up 10.5% to up 13.5% | |||||
| Economic Fuel Price per Gallon (a)(b) | $2.92 | Average fuel price per gallon, including taxes and delivery | $2.89 | |||
| Capital Expenditures | $330M to $380M | |||||
| (a) See Table 4 for a reconciliation of CASM excluding fuel and non-recurring items and economic fuel price per gallon to each of their respective most directly comparable GAAP financial measures. | ||||||
| (b) Fuel price per gallon estimates are based on the January 17, 2023 fuel forward curve. |
Statistical information, as well as a reconciliation of certain non-GAAP financial measures, can be found in the accompanying tables.
