Hawaiian runs profit
streak to 11 monthsAn SEC panel also says it is
weighing the recommendation
of securities law violations
against former CEO Adams
Hawaiian Airlines posted its 11th consecutive month of operating profits yesterday on a day in which a Securities and Exchange Commission panel announced it is considering recommending civil action against former Chairman and Chief Executive John Adams for possible violations of securities laws.
The bankrupt carrier, which on Sunday marks its 1-year anniversary in reorganization, enjoyed its best February ever with $1.9 million in operating income on revenues of $55.4 million. Hawaiian's cash position also improved as it rose to $94.6 million from $83.1 million at the beginning of the month and $87.7 million from the start of the year.
"Hawaiian's ability to generate profits, even in a slow month like February, shows just how far it has come over the past year," trustee Joshua Gotbaum said. "This is an excellent airline with tremendously dedicated employees, the industry's best on-time record, and superb customer service."
Hawaiian Holdings Inc., which publicly announced on Oct. 2 that the company and several officers were the target of an SEC investigation related to a $25 million tender offer in 2002, said yesterday that the staff of the San Francisco District Office has given Adams and majority shareholder AIP LLC an opportunity to present information and defenses to the staff prior to the staff making a recommendation to the SEC. Adams, chairman and CEO of the parent company, also is the controlling member of AIP.
"Hawaiian Holdings continues to believe that the actions taken by its officers in connection with the tender offer were proper and lawful," said Thomas X. Fritsch, an attorney for Hawaiian Holdings.
The company, which was notified of the formal, nonpublic investigation on Sept. 22, said it continues to cooperate with the SEC staff.
Hawaiian Airlines, the only operating subsidiary of Hawaiian Holdings, said operating income in February improved $11.3 million from an operating loss of $9.4 million in February 2003. Revenues were up 17.9 percent from $47 million a year ago.
Net income last month was $594,000 compared with a net loss of $9.3 million a year earlier. The airline's net income for the first two months is $3.9 million.
Hawaiian said last month's record results were achieved despite a $1 million increase in fuel costs, nearly $1 million in reorganization charges and a $3 million drop in charter flight operations.
However, the airline said those numbers were more than offset by a nearly $10 million increase in scheduled passenger revenues, a $2 million savings in aircraft maintenance, and more than $1 million savings in aircraft rent.
For the first two months of the year, Hawaiian has unaudited operating profits of $7.9 million on revenues of $116.5 million compared with an operating loss of $12.7 million on revenues of $100.8 million over the same period a year ago.