Aloha Airlines posted a net gain of $1.3 million in 2003.
Aloha turns to profit
Aloha Airlines is back in the black again after four straight years of losses.
The privately held carrier ended 2003 with a net gain of $1.3 million despite suffering a loss of $3.2 million in the final three months of the year.
It was the first profitable year for Aloha since 1998, when it made $5.3 million. In 2002, Aloha had a loss of $43.7 million, which included a nationally required accounting change that added more than $17 million to the company's expenses. Aloha lost $29.8 million in the fourth quarter of that year.
The results were made public yesterday by the federal Bureau of Transportation Statistics and include only Aloha Airlines' results. They do not include financial information from parent company Aloha Airgroup Inc. or its subsidiary, Island Air, which has since been sold.
"The overall results for 2003 were a big improvement over the previous years," said Aloha President and Chief Executive Glenn Zander. "Among the factors were wage concessions worth approximately $10 million for the year and a record third quarter ($11.3 million), which were the best quarterly financial results in the company's 57-year history."
Zander attributed the loss in the fourth quarter to unanticipated engine maintenance costs and higher-than-anticipated fuel costs.
Aloha also would have had a loss for the year without $12.7 million it received in May as part of $2.3 billion 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.
Aloha's revenues rose 20.3 percent in the fourth quarter to $102 million from $84.8 million a year ago and increased 24.6 percent for the full year to $410 million from $329 million in 2002.
The airline's operating loss in the fourth quarter narrowed to $2 million from an operating loss of $3.8 million a year ago. For the year, though, Aloha swung to an operating profit of $8.1 million from an operating loss of $23.5 million in 2002.
Rival Hawaiian Airlines, which filed for Chapter 11 reorganization bankruptcy on March 21, 2003, also improved its performance last year over the previous 12 months. Although it had a net loss of $49.5 million due to $115 million in reorganization items, Hawaiian's operating income was $77.5 million on $706.1 million in revenues. The results are only for the airline and don't include parent company Hawaiian Holdings Inc.
Airline consultant Robert Mann said part of the discrepancy in the numbers between the two airlines might lie in their different operating economics. Mann said this would be most evident in Hawaiian's 767 fleet and Aloha's 737 fleet that the airlines use for trans-Pacific routes.
"They have different fleets and different route structures," said Mann, president of R.W. Mann & Co. in Port Washington, N.Y. "Independent of the cost of fuel, the fuel burn of a 767 per seat is going to be lower than the fuel burn per seat of a 737. And if fuel costs are higher, the dollar cost of fuel per seat becomes larger as fuel prices go up."
Aloha's operating expenses rose 11.5 percent in the quarter to $98.8 million from $88.6 million and gained 13.5 percent for the year to $400.2 million from $352.5 million.
The airline's cash position dropped to $23.2 million at the end of 2003 from $37 million when the year started.
It was an eventful year for Aloha, which added new routes throughout 2003. It launched Burbank-Maui service in February, Sacramento-Maui in April, Reno-Honolulu in July, Orange County-Kona in July and Honolulu-Pago Pago in mid-December. It also added to seasonal service between Oakland and Lihue from June to September.
Aloha now serves the California cities of Oakland, Burbank, Orange County and Sacramento; as well as Reno, Nev.; Las Vegas; Phoenix; Vancouver, British Columbia; Rarotonga in the Cook Islands; and Majuro and Kwajalein in the Marshall Islands
The airline, which operates 11 737-700s for long-distance routes and 14 737-200s for interisland flights, saw its interisland seat capacity agreement with Hawaiian Airlines end on Oct. 1, 2003. The special federal exemption had gone into effect in December 2002 to allow the airlines to cut duplication and help them recover financially following the terrorist attacks of Sept. 11, 2001.
