HAWAIIAN HOLDINGS INC (HA)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 operating revenue increased to $731.9M (+3.5% YoY) as capacity rose 4.3%, but the company posted a GAAP net loss of $67.6M and diluted EPS of -$1.30 with pre-tax margin at -9.2% .
• Guidance updated: FY 2024 GAAP CASM outlook cut to up 0.4%–2.7% (from up 4.1%–6.3%), economic fuel price lowered to $2.71/gal (from $2.83), and CapEx reduced to $350–$400M (from $500–$550M) .
• Q3 2024 outlook: ASMs up 5.5%–8.5%; RASM down 4.5% to down 1.5%; GAAP CASM down 3.0% to down 0.8%; CASM ex fuel/non-recurring down 1.5% to up 1.5%; average fuel price $2.69/gal (economic $2.71) .
• Liquidity strengthened: $1.5B total liquidity, $1.3B unrestricted cash/investments, and $2.3B debt; completed exchange of $1,193.7M 2026 notes into $984.8M 2029 notes + $204.7M cash; 99.5% participation .
• DOJ merger review timing extended with Alaska to Aug 15, 2024; company continues to work cooperatively with DOJ; Barclays credit card partnership renewed (strategic loyalty tie-in) .

What Went Well and What Went Wrong

What Went Well

• Continued network/product execution: began flying first two Boeing 787‑9s, rolled out free high-speed Starlink Wi‑Fi across long-haul narrow bodies and installed Starlink on first A330; launched SLC–HNL and new SMF–KOA/LIH routes .
• Liquidity and liability management: $1.5B liquidity and successful note exchange (99.5% tender) extended runway and simplified capital structure .
• Management noted sequential RASM improvement and strongest unit revenue improvement since Q2 2022; ancillary revenue (Extra Comfort/preferred seats) up 18% YoY, reflecting demand and price optimization .

Quote: “This quarter we delivered on important investments in the future of our company, including flying the first two Boeing 787-9’s in our fleet, rolling out free, high-speed Starlink WiFi across our long-haul narrow body fleet, and adding three new routes to our North America network.” — Peter Ingram, CEO .

What Went Wrong

• Profitability pressure: GAAP net loss widened to $67.6M; adjusted net loss $71.0M; pre-tax margin of -9.2% (adjusted -9.7%) .
• Cost inflation: GAAP CASM rose 5.3% YoY to 15.05¢; maintenance +30.3% YoY; wages/benefits +11.5% YoY; fuel price per gallon increased 4.4% YoY .
• RASM softened: total RASM down 0.8% YoY; passenger load factor dipped slightly (-0.2 pts YoY) even as ASMs rose .

Financial Results

Q2 2024 YoY comparison:

KPIs

Estimates vs Actuals (S&P Global consensus)

Note: S&P Global consensus data unavailable due to missing CIQ mapping. Values retrieved from S&P Global would be used when available.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO message: “While delivering on those initiatives and prioritizing our return to industry-leading levels of operational performance, we continue to pursue regulatory clearance to complete our combination with Alaska Airlines.” — Peter Ingram .
• Revenue/ancillaries: Management highlighted “positive sequential RASM improvement” and noted Extra Comfort/preferred seats revenue up 18% YoY, driven by demand and pricing .
• Balance sheet/liquidity: $1.3B unrestricted cash/investments; $1.5B liquidity incl. undrawn $235M revolver; $2.3B debt; notes exchange to 2029 maturities .
• Operations/guest experience: Starlink installed on first A330; A321 rollout complete; 787‑9 operations began; new North America routes launched .

Q&A Highlights

• Barclays credit card agreement: Extension adds a few more years; no specific economics disclosed .
• International/Japan strategy: Scaled back Japan capacity amid weak yen; focusing on product evolution (Starlink, 787) and point-of-sale mix across markets .
• Network flexibility pre-merger: Full control over pricing/network until close; continue to compete independently and adjust as needed .
• Premium/ancillaries and Starlink impact: Strong resilience in premium; Starlink drives guest satisfaction and expected to support demand over time .

Estimates Context

• S&P Global consensus for Q2 2024 revenue and EPS was unavailable due to a missing CIQ mapping for HA; management commentary and media summaries referenced an EPS “beat,” but we do not anchor to non‑SPGI sources per methodology .
• Near-term estimate revisions likely focus on lower FY 2024 CASM trajectory, reduced CapEx, and fuel price assumptions (GAAP $2.68/gal; economic $2.71/gal), alongside RASM pressure into Q3 .

Key Takeaways for Investors

• Revenue grew 3.5% YoY to $731.9M, but profitability remained negative amid higher maintenance and labor costs; GAAP CASM up 5.3% YoY to 15.05¢, while CASM ex fuel/non-recurring was 11.50¢ .
• FY 2024 outlook improved on costs: GAAP CASM and CASM ex-fuel guided lower; fuel price assumptions reduced; CapEx cut materially to $350–$400M, supporting liquidity .
• Q3 guide implies continued RASM pressure even as capacity grows; watch pricing discipline and mix (premium/resilient ancillaries) .
• Product/operations upgrades (Starlink across A321, first A330 installs, 787‑9 ramp) and network adds should enhance customer value and revenue quality over time .
• International/Japan remains a drag due to FX; Maui recovery is ongoing but incomplete—expect continued network/point-of-sale optimization .
• Balance sheet actions (notes exchange) and co‑brand renewal with Barclays fortify liquidity and loyalty economics into the merger review timeline .
• Merger with Alaska remains a key medium‑term catalyst; DOJ timing extended to Aug 15, 2024—monitor regulatory milestones and integration planning signals .