Hawaiian Airlines reported a net income increase of 27% to $36.4 million in the first quarter compared to $28.5 million in the year-ago period, despite slightly lower operating revenue.
Operating revenue for the quarter was $656.8 million—down 1.3% year-over-year (YOY) from $665.4 million.
The income gain “reflects a solid start to 2019. … Relative to the expectations we provided at the beginning of the period, we came in right in line—if not at the better end—in terms of revenue, cost, capacity and fuel consumption,” Hawaiian CEO Peter Ingram said.
First quarter RASM was down 3.7% YOY, which was in line with the company’s latest guidance update and slightly higher than midpoint guidance from the previous quarter. The results included a 1 percentage point collective benefit from fuel surcharges and foreign currency rates in the quarter, offset by 1 point in headwinds from the shift in the Easter holiday to April 21, which was three weeks later than in 2018.
First quarter domestic PRASM was down 7% YOY because of pressure on average fares in North America, continuing demand softness in the carrier’s neighbor island network and network changes that drove domestic stage length up 6.5% YOY.
“To highlight the impact of stage length on our results, North America and neighbor island entities’ year-over-year performance were each 2 to 3 points better than the combined domestic total,” Overbeek said.
International PRASM was up 2.6 % YOY, helped by continued strong performance in Japan and partially driven by fuel surcharges, which helped offset pricing and currency pressure in Australia.
The company expects 2Q RASM to be down 2%-5% YOY on capacity growth of 1.5%-3.5%. The carrier also estimates the Easter shift will benefit 2Q RASM by about 1 percentage point, while fuel surcharges and foreign exchange rates will produce a headwind of roughly 0.25 points. Hawaiian expects 2Q domestic stage length will grow by 8.5% YOY, putting further pressure on RASM…
