Aloha Airlines’
net descends
78 percent
A drop-off in Japanese travelers
By Russ Lynch
to Hawaii is cited as the main
reason for the earnings shortfall
Star-Bulletin
Aloha Airlines' second-quarter profit fell 78 percent to $249,633, from $2.1 million in the equivalent period of last year after a 3.3 percent decline in revenues and a 1.8 percent increase in expenses.
"There is a relatively simple explanation" for the slip in revenues, said Glenn R. Zander, president and chief executive officer.
Due mostly to the drop in Japanese travel to Hawaii, the airline was carrying 10,000 passengers a month fewer in the latest quarter than in the year-earlier period, he said.
Nevertheless, that was an improvement over the 30,000-a-month decline the airline had been experiencing in earlier quarters, he said. The airline earlier cut back some flights because of the drop in business.
Zander said business has picked up since the end of the second quarter and passenger volume in July was ahead of the previous July's.
Freight revenues were down in the latest quarter because of lower activity in the Hawaii economy and the airline also did not fly as many passenger charter flights this year as it had last year, Zander said.
The bottom was affected by increased expense, virtually all of it going into promotion and sales, such as advertising a new frequent-flier program in which Aloha passengers can earn AlohaPass and United Airlines Mileage Plus points at the same time.
Zander said a financial plan the airline drew up earlier assumed that Aloha would lose money in the second quarter and instead it made a small profit, "so actually we're quite pleased with the result."
The privately-owned airline's financial report filed with the U.S. Department of Transportation shows operating revenues of $56.5 million in the second quarter of this year, down $1.9 million from $58.4 million in the 1998 quarter.
Second-quarter operating expenses were $56.05 million this year, up $1.05 million from $55 million in the year-earlier period.
For the first half of 1999, Aloha had a profit of $2.2 million, down 43 percent from a profit of $3.8 million in the first half of the previous year. Revenues of $113.9 million in the latest six months were 3 percent below the revenues of $117.4 million the 1998 first half. The figures filed in Washington are for Aloha Airlines only, not the parent Aloha Airgroup Inc. or the company's commuter airline, Island Air.
