Thursday, November 15, 2001

Hawaiian Air profits
up in 3rd quarter

But business has dropped off
sharply since the Sept. 11 attacks

By Dave Segal

Hawaiian Airlines Inc., bolstered by an $8.5 million federal grant to help it compensate for terrorism-related losses, posted third-quarter net income of $12 million during a period that saw air travel take a precipitous drop nationwide.

Hawaiian Air The Honolulu-based carrier, which was forced to lay off 430 workers and cut 20 percent of its flights in the wake of the Sept. 11 attacks, said yesterday that it expects overall passenger yield and revenue to decline through March amid a statewide tourism slowdown.

"Our company experienced immediate and profound negative effects of the terrorist attacks," Vice Chairman and Chief Executive Officer Paul J. Casey said in a statement. "Prior to September 11, and particularly in July and August, Hawaiian was generating profits. Immediately following September 11, very few of our customers canceled their travel plans. However, the pace of new bookings dropped precipitously.

"We have since succeeded in stimulating more demand with tactical fare sales. However, these sales will likely diminish overall yield and revenues in the next two quarters."

The airline, which had earnings of 35 cents a share, returned to the black after losing $218,000, or 1 cent a share, in the same quarter a year ago. That quarter included a $12.8 million restructuring charge related to the company's transition to 10 new Boeing 717-200 aircraft from an aging DC-9 fleet. Its operating profit in the most recent quarter was $14.8 million compared with $1 million in the third quarter of 2000.

Without the federal assistance from the U.S. Air Transportation Safety and System Stabilization Act, Hawaiian would have had net income of $7.4 million, or 21 cents per share, and operating profit of $6.3 million.

Excluding the restructuring charge, Hawaiian's net income for the third quarter of 2000 would have been $6.8 million, or 18 cents a share, and its operating income in that quarter would have been $13.9 million.

Hawaiian's total revenue slipped 2 percent last quarter to $166.4 million from $169.9 million a year ago. Passenger yield, the revenue per passenger mile flown, rose 3 percent to 11.28 cents per passenger mile from 10.95 cents in the 2000.

Shares of Hawaiian rose 24 cents to close at $2.49 today on the American Stock Exchange. The company an- nounced its earnings after the close of the market yesterday.

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