Tuesday, February 23, 1999


Hawaiian Air
rises to net gain

The carrier will share
its profits with workers

Hawaiian wins right to sell coupons via ATMs

By Russ Lynch


Hawaiian Airlines Inc. today reported a strong fourth quarter and said it made a record operating profit for all of 1998, enabling it to make a first-ever, profit-sharing payment to employees.

Checks totaling $760,000 will go out in the last week of March to about 2,600 employees, an average of about $290 each, the airline said today.

Info Box Strong passenger business and a $3.3 million drop in fuel costs led Hawaiian Airlines to a profit of $231,000, or 1 cent a share, in the fourth quarter of 1998, a turnaround from a loss of $1.3 million, or 3 cents a share, in the final quarter of 1997. Fourth-quarter revenues of $101.6 million were up 6.7 percent from $95.2 million in the year-earlier quarter.

From operations alone, Hawaii had a profit of $1.7 million in the latest quarter, compared with a loss of $246,000 in the 1997 quarter. That helped the airline make an operating profit of $17.4 million for all of 1998, compared with an operating profit of $2.5 million in 1997, said Paul J. Casey, president and chief executive.

Casey this morning said that the 1996 agreement with employees, in which unions made concessions to help a buyout go through, requires Hawaiian to share profits with the workers whenever it makes an annual operating profit of more than $10 million. The payouts will also go to nonunion employees but not to officers at the level of vice presidents or higher.

Hawaiian spent $66.6 million on fuel in 1998, about $11 million less than in 1997, and saved another $6 million from the state's waiver of landing fees at Hawaii's airports.

That adds up to $17 million less in expenses, about equal to the operating profit, but John Garibaldi, chief financial officer, said there were many other factors that affected the bottom line. Flights were up about 6 percent for the year, for example, so fuel costs can't be compared directly, he said.

Casey said the profit increase also was due to careful cost controls, a new computerized yield management system and strong West Coast-Ha-waii business.

Hawaiian had a net profit for the year of $8.2 million, or 19 cents a share, compared with a loss of $1.02 million, or 3 cents a share, in 1997. Full-year revenues of $426.4 million were up 5.5 percent from $404.2 million in 1997.

The airline spent $15.6 million on fuel and oil in the latest quarter, down from $18.9 million in the year-earlier quarter.Fourth-quarter passenger traffic was up 4.6 percent at 1.22 million passengers, compared with 1.17 million in the 1997 quarter, and passenger revenues in its scheduled services were up 7.5 percent at $83.6 million in the latest quarter, from $77.8 million in the 1997 period.

"Our success in stimulating travel demand on our trans-Pacific routes has to a large extent buffered us from the negative effects Hawaii has seen from the difficulties in Asia," Casey said.

Hawaiian next month starts new Los Angeles-Maui-Los Angeles and Los Angeles-Maui-Kona-Los Angeles services and will start weekly Los Angeles-Tahiti charters in August.

Airline can sell
coupons via ATMs

By Russ Lynch


Hawaiian Airlines Inc. may continue to sell its interisland flight coupons through Bank of Hawaii's automated teller machines and the bank doesn't need a travel agent's license, state officials have ruled.

However, the bank did make a change in the way it handles the transactions before it got the approval, the Department of Commerce & Consumer Affairs said today. The DCCA made its ruling last week.

Regal Travel Inc. filed a complaint in September charging that the bank was functioning as a travel agent by taking fees for dispensing the coupons. The business should go through travel agents or the bank should be required to get a license, Regal argued.

A hearings officer agreed in late October. However, the bank has since stopped taking payments from the airline based on the number of coupons sold through the ATMs and is instead simply "renting the space" to the airline, said Sharon Leng, state complaints and enforcement officer.

"The bank has stepped back from it," she said, and is not functioning as a travel agent. Paul J. Casey, president and chief executive of Hawaiian, said today coupon sales through the ATMs are growing.

E-mail to Business Editor

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
[Stylebook] [Feedback]

© 1999 Honolulu Star-Bulletin