The interisland market is returning to normalcy just at the right time for Hawaiian Airlines.

With fuel costs spiking again, the state's oldest carrier said yesterday that surplus interisland capacity has disappeared and pricing has returned to more rational levels following the merger between go! and Mokulele airlines last October.

In a quarter that brought about huge losses for many of the nation's largest airlines, parent company Hawaiian Holdings Inc. eked out a $216,000 profit despite a 40.1 percent, or $20.1 million, rise in fuel costs. While its net income was down 99.1 percent from a year-earlier profit of $23.5 million, President and Chief Executive Officer Mark Dunkerley said the year-earlier net income was somewhat of an anomaly in what is historically Hawaiian's weakest quarter.

“;While our modest profit looks impressive when compared to the prevailing losses at many of our competitors, it is overshadowed by the extraordinarily favorable results posited in the first quarter of 2009,”; Dunkerley said. “;Nonetheless, we saw some positive trends this past quarter, and the numbers were generally in line with what we expected when the year began.”;

Nationwide, Delta Air Lines lost $256 million in the first quarter, American Airlines parent AMR Corp. lost $505 million and Continental Airlines lost $146 million, while Southwest Airlines Co. earned $11 million. UAL Corp's United Airlines and US Airways Group Inc. are scheduled to report their earnings on Tuesday.

Bob McAdoo, an analyst with Prairie Village, Kan.-based Avondale Partners LLC, said the reduced interisland competition and improving economy are helping Hawaiian.

“;The competitive situation in Hawaii is not as difficult as it once was, and that's clearly helpful,”; McAdoo said. “;You don't have the fares that were not really sustainable short haul in the islands, and that helps a company like this make a little money in difficult times.”;

Interisland fares, which were as low as $39 one way last year, are now $59.

“;And from all indications,”; McAdoo said, “;business is picking up to Hawaii in a variety of ways. It's clearly not to where everybody likes it, but I understand tourism is coming back and that's clearly helpful. We're seeing, generally, the economy strengthening. And as consumers go back to spending a little bit like they used to, making trips to Hawaii is something of an attractive place to put your money.”;

Dunkerley said unit revenue on the airline's trans-Pacific routes did not rise as quickly last quarter as in the overall U.S. industry.

“;But this was not unexpected given that we did not experience as precipitous a decline in 2009 as most of the carriers,”; he said.

Still, Hawaiian's overall revenue rose 3.4 percent to $298.4 million from $288.6 million.

Dunkerley said interisland revenue per available seat mile in the first quarter was up about 25 percent with meaningful improvements in both yield and load factor, or percentage of seats filled, but that the same measurement on its trans-Pacific routes was only modestly positive year over year.

“;Given the higher fuel prices we are experiencing this year, it is important that we generate more substantial improvement on our trans-Pacific routes,”; he said.

Dunkerley said he expects overall airline capacity from the Western states to Hawaii to rise about 10 percent in the second quarter versus a year ago and about 9 percent for the full year.

“;Put into perspective, if current schedules play out in 2010, capacity will still be about 9 percent lower than what was available in 2007, the peak year for visitor arrivals from the West Coast to Hawaii,”; he said.