April adds to losses
at HawaiianLast month's $747,000 deficit
brings the carrier's loss to
$16 million in the first
four months of 2003
Hawaiian Airlines, which lost $15.5 million in the first quarter of the year, continued spilling red ink in April as it lost an additional $747,000.
The carrier's statement of operations, filed this morning with U.S. Bankruptcy Court, also showed that Hawaiian lost $57,000 from the time of its March 21 Chapter 11 reorganization filing to the end of that month. For the first four months of this year, Hawaiian lost $16.1 million.
Hawaiian's operating income, however, improved in April with a gain of $721,000. That reduced the airline's operating loss for the first four months to $12.8 million.
The monthly operating expense report comes one day after the airline's parent Hawaiian Holdings Inc., announced it lost $15.5 million in the first three months of the year. Hawaiian blamed the loss on a travel slowdown stemming from the Iraq war and SARS fears, as well as legal expenses associated with its bankruptcy filing.
In what is seasonally a weak travel period, Hawaiian posted its second straight quarterly loss and its fifth loss in the past six quarters.
"Like the rest of the U.S. airline industry, we continue to experience downward pressure on yield (passenger revenue per passenger mile) and therefore we currently expect to incur a pre-tax loss for the second quarter of 2003, before consideration of any reimbursement to be received under the Wartime Act," Hawaiian said in its quarterly filing with the Securities and Exchange Commission.
Hawaiian received $17.5 million Thursday for reimbursement of airline security fees from $2.3 billion being distributed under the Emergency Wartime Supplemental Appropriations Act. The act compensates carriers for the suspension of passenger security fees from June 1 through Sept. 30 and costs associated with installing strengthened flight deck doors and locks.
Meanwhile, Hawaiian's first-quarter loss was narrower than the $18.6 million it lost in the same period a year ago. Earnings per share for the quarter were a loss of 55 cents compared with a loss of 54 cents a year ago.
Hawaiian, which lost $58 million last year, acknowledged in its SEC filing that it faces a lot of uncertainty because of an order by U.S. Bankruptcy Judge Robert Faris last week to appoint a trustee to oversee the airline through reorganization.
Hawaiian Chairman and Chief Executive Officer John Adams, who will lose his job when the trustee is appointed, said fuel prices which increased 23 percent to $4.8 million and sluggish travel demand compounded problems for the airline. But Adams said the outlook is promising for the summer.
"Bookings for the summer travel season have been encouraging so far and the company will begin to realize some of the benefits of its cost restructuring efforts in the second quarter," Adams said. "However, competitive pricing is putting downward pressure on average yield."
The yield remained steady at 11.7 cents.
Hawaiian said the second-quarter savings it will realize stem from the benefits of $15 million in annual labor cost concessions it negotiated with its three major unions in the first quarter and reduced cash rental expenses as a result of its restructured leases on seven Boeing 767s with lessor Ansett Worldwide.
Hawaiian said its net operating loss was $13.6 million compared with a loss of $18.6 million in the first quarter of 2002. Operating revenues rose 13.7 percent to $157.1 million from $138.1 million as the number of available seats on transpacific routes increased 39.4 percent from the year-earlier quarter as the airline added new flights. Operating expenses grew 8.8 percent to $170.6 million from $156.8 million.
The airline said its cash and cash equivalents in the quarter shrunk to $30.6 million as of March 31 from $71.9 million at the end of the year and $93.6 million a year ago.
Hawaiian's cash position was a key issue during the airline's recent trustee hearing.
In other developments:
>> Todd Cole, a consultant for Hawaiian whose consulting contracts were questioned by Boeing Capital, resigned Thursday. Cole was one of the five board members that Hawaiian said would resign if the airline's proposal for the appointment of an examiner instead of a trustee was accepted.