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Hawaiian Air Hawaiian Airlines Inc. today reported a third-quarter net loss of $218,000, or 1 cent a share, saying higher fuel costs and a restructuring charge related to fleet changes wiped out increased revenues.
posts loss but
revenues rise
The carrier, hurt by expensive
fuel and expansion costs, still
lacks a contract with its pilots' unionBy Russ Lynch
Star-Bulletin
In the year-earlier quarter, Hawaii has a profit of $3.4 million, or 8 cents a share.
Revenues totaled $169.9 million in the latest period, up 26 percent from $134.8 million in the year-earlier quarter. The airline said it had an operating profit of $1 million in the third quarter, down from an operating profit of $6.9 million in 1999's third quarter.
Costs rose sharply over the past year, Hawaiian said. Fuel costs were up 60 percent and the airline took a $12.8 million restructuring charge in the latest quarter, as it lowered the value of some of its 15 DC-9 interisland jets and prepared to end leases on others. Hawaiian plans to replace them with new Boeing 717s starting in February.
Hawaiian also paid $1.6 million more in landing fees at Hawaii airports than it did last year, a result of the Sept. 1, 1999, reinstatement of the state's landing charges. The state had suspended collection of the landing fees for two years in 1997.
The airline also paid $810,000 in rent in the latest quarter for two additional DC-10s it brought in to boost its long-haul capacity. The increased flying also required it to hire more people, raising staff expenses.
The airline announced its earnings after the market closed today. Its American Stock Exchange-traded stock slipped 6 cents to close at $2. The shares are down about 6 percent so far this year. Hawaiian more than doubled its second-quarter profit this year, after rising fuel prices brought it a first-quarter loss. Adding the third-quarter result, Hawaiian had a net profit through the first nine months of $1.8 million, or 4 cents a share, on revenues of $460.5 million. That compares with a profit of $4.9 million, or 12 cents a share, on revenues of $366.5 million in the 1999 nine months.
One uncertainty facing Hawaiian is that it has yet to wrap up contract negotiations with its pilots' union. Hawaiian did not mention the negotiations in today's financial report but has said it expects to get an agreement.
The Air Line Pilots Association representing the 300-plus Hawaiian Air pilots has said that pilots took a pay cut to help the airline recover from bankruptcy in the early 1990s but the airline has now recovered and it is time they received a raise.
The pilots' contract became open for amendments at the end of February. The pilots say that without a new contract they won't fly the Boeing 717s. The company brought in the National Mediation Board, which has held meetings with both sides but has yet to reach a deal. If the board announces its mediation efforts have failed, the pilots would have a 30-day cooling-off period before they would be allowed to strike.