Fuel drags
Hawaiian Air
into loss

Hawaiian Airlines' streak of consecutive monthly operating profits has ended after 17 months.

Higher fuel, maintenance and labor costs took their toll in September as the carrier posted a $2 million operating loss after generating an operating gain of $4.7 million a year ago.

Revenues rose 7.1 percent to $55.7 million from $52 million.

The airline, which is expected to emerge from a 19-month-old bankruptcy proceeding early next year, also recorded $113 million in reorganization expenses last month. Most of that amount -- $110.6 million -- were one-time, noncash claims to settle aircraft leases with Boeing Capital Corp. and Ansett Worldwide.

As a result of the one-time items, Hawaiian had a net loss for the month of $113.8 million.

"Predictably, the combination of high fuel prices and increasing labor and maintenance costs finally tipped our monthly operating profit to an operating loss," Hawaiian Airlines trustee Joshua Gotbaum said. "Even though we increased both our overall revenue and load factor compared to last September, higher operating costs and low air fares nullified these gains."

Operating expenses jumped 22 percent to $57.7 million from $47.3 million. Fuel costs continued to climb as the airline paid $11.4 million, 48 percent higher than the $7.7 million it paid during September 2003. Aircraft maintenance expense jumped 75.8 percent to $4.7 million from $2.7 million, primarily because of the expiration of aircraft warranties this year. Wage-and-benefit costs rose 12.1 percent to $18.3 million from $16.3 million.

Hawaiian filled 87.5 percent of its seats last month -- a gain of 5.6 percentage points from September 2003 -- even as the number of seats increased by 2.6 percentage points over a year ago.

The airline saw its unrestricted cash decline to $114.5 million from $143.5 million at the start of September. The airline had $87.7 million at the beginning of the year.