Hawaiian Airlines reported a decline in net profit for the second quarter, as the airline comes under increasing competitive pressure in some of its key markets.
The Hawaiian flag carrier achieved a net profit of $57.8 million in the three months through June 30, a 27.2% decline from Hawaiian’s $79.5 million net profit in 2Q 2018. Revenues were down by 0.5% to $712.2 million, with costs essentially flat.
The airline recorded an operating profit of $88.9 million in the second quarter, down 4.4% from the previous year. Yield declined 3.7%, and passenger unit revenue dropped by 2.8%. Traffic on scheduled services rose 3.6% on a 2.7% capacity gain, resulting in load factor increasing by 0.8 point to 87.1%.
CEO Peter Ingram said these represent “solid results in the context of an evolving competitive environment.” He noted that Dallas-based Southwest Airlines ramped up services on routes between Hawaii and the US mainland in the second quarter, and Japan’s All Nippon Airways (ANA) introduced Airbus A380s to the Hawaii market, replacing smaller aircraft. These changes were not a surprise and had been signaled for some time, Hawaiian said.
There is “no denying that the competitive environment and industry capacity here in Hawaii is more active than it was a couple of years ago,” Ingram said. However, the airline’s “ability to continue to execute well, both financially and operationally, demonstrates that Hawaiian is built to compete and win,” he said.
Despite the new developments, Hawaiian remains “extremely well positioned” in the US mainland, Japan and inter-island markets, Ingram said. He stressed that “while others are looking at opportunities in Hawaii, we see opportunity too.” This means Hawaiian is continuing to build its presence in these markets.
The airline launched additional mainland routes from both Honolulu and Maui in the second quarter and is building up its A321neo fleet. In the Japan market, Hawaiian is launching a new route to Fukuoka in November and has gained tentative approval to add another daily frequency to Tokyo Haneda airport. Hawaiian’s proposed joint venture with Japan Airlines is in the final stages of regulatory review, with a decision expected by the end of the third quarter…
