Hawaiian Air’s passenger yield falls

Competitors squeeze its interisland and mainland routes

Hawaiian Airlines' parent said yesterday the amount of revenue it generates per passenger will fall 11 percent to 12 percent in the current quarter as it continues to get squeezed on both its mainland and interisland routes.

The decline in passenger yield, which measures passenger revenue per revenue passenger mile, is mainly due to intensified price competition on its trans-Pacific flights and the continuing impact of increased capacity on interisland flights since go! began service in June 2006, according to the company's 8-K filing with the Securities and Exchange Commission.

Hawaiian Holdings Inc. also said a portion of the yield decline is due to its increased flights to the mainland. Those flights, the carrier said, generally produce lower yields than interisland flights because of the additional miles flown. However, the passenger yields don't reflect operating costs.

The carrier, which earlier this month placed a recently acquired Boeing 767-300 EM aircraft into service, said the airline's capacity, or available seat miles, will increase 13.8 percent in the first quarter from a year ago and that for all of 2007 will be up about 12 percent from 2006.

Hawaiian said its revenue passenger miles -- one paying passenger transported one mile -- is expected to "increase at a slightly lower pace" in the first quarter and result in 87 percent of its seats being filled, down from 87.6 percent a year earlier.

In addition, Hawaiian said its operating expense per seat mile will decline 2.5 percent to 3.5 percent in the first quarter due to a decrease in aircraft rental expense following the purchase of three previously leased Boeing 767s from Ansett Worldwide in December 2006.

Those planes don't include the 767 that was put into service earlier this month. That was one of four aircraft purchased in the first quarter of 2006 from Delta Air Lines.