Hawaiian Airlines has posted a $61 million net loss for the first quarter of 2021. Despite the loss, the carrier is upbeat on the future as it sees North American bookings rebound strong and deploys capacity in new markets. As international and intra-island services remain depressed due to travel restrictions, North American revenues have helped minimize losses and will be a critical market in bringing the carrier back to profitability.
Hawaiian’s first-quarter financial results
The first quarter of 2021 can be split into two parts. At the start of the year, ongoing depressed travel volumes seemed to quell any potential hopes for a quick rebound, as Hawaiian concentrated on a ramp-up by summer. However, things started to pick up in mid-January and onwards. Hawaiian Airlines CEO Peter Ingram stated the following on the carrier’s first-quarter earnings call:
“At the time of our fourth quarter 2020 financial release, our outlook was depressed by sluggish bookings in early January, which in a typical year is the peak period for first half sales. What we didn’t know then is that we were on the cusp of a positive turn. As virus case counts in the US crested in mid January, even before the pace of vaccinations accelerated, we saw material improvement in bookings for our North America routes. Week by week, for the rest of the quarter, the bookings pace continued to accelerate. Neighbor Island bookings also improved, although not as much relative to pre-pandemic levels as North America.”
Total passenger revenue during the quarter amounted to $137.5 million, down 77% compared to the same quarter in 2019. Total revenue for the quarter at $182 million, which was down 72% compared to the first quarter in 2019, on 49% lower capacity.
As of March 31st, Hawaiian Airlines had $2.1 billion in liquidity, excluding the additional payroll support the airline will receive in the future. After the carrier achieved positive operating cash flows in March, it now believes it has sufficient liquidity and is not looking to raise additional capital in the near term.
North America bookings rebounded strong
Bookings accelerated from January to February to March. In fact, according to CEO Peter Ingram, nearly half of the carrier’s passenger revenue for the quarter was recorded in March, which has boosted the airline’s expectations for a rebound in travel and quelled doubts about pent-up leisure demand.
North American bookings saw step changes in February and March. Brent Overbeek, Senior Vice President – Revenue Management and Network Planning, stated the following on the earnings call:
“Finally, after a disappointingly slow start of the year with booking activity, we saw material acceleration in February, with bookings at roughly 80% of 2019 levels for travel in the second quarter. We saw another step change during the month of March, and have been running at over 110% of 2019 booking levels since then. Unlike previous quarters during the pandemic, we’ve seen guests confidence and travel extending further, resulting in appreciably strengthened booking activity for the latter half of the year as well. As such, our current booked load factor for both the third and the fourth quarter of this year are now at or above 2019 levels.”
Responding with capacity
North America has come back strong, and Hawaiian is quickly adding capacity on routes to the mainland US to cater to increased demand and capture revenue. In the first quarter, Hawaiian inaugurated new routes, including Maui (OGG) to Long Beach (LGB), Orlando (MCO) to Honolulu (HNL), and Ontario (ONT) to HNL. Since then, Hawaiian has also inaugurated new nonstop flights between Austin (AUS) and HNL.
In May, Hawaiian will launch a new service from OGG to Phoenix (PHX). This route will complement the return of Hawaiian’s Las Vegas to Maui service starting in late May. Once that route returns, all of Hawaiian’s pre-crisis North American route map will be back up and running, and then some.
By June, Hawaiian’s North American network will be larger than the same month in 2019. Much of this comes after the carrier has reduced frequencies or cut flights altogether on flights to Asia and the South Pacific. Now, it is using spare aircraft to service new routes to Orlando and Austin or upgauge flights previously flown with the Airbus A321neo.
What do you make of Hawaiian’s first-quarter results? Are you glad to see the airline’s success on North American routes? Let us know in the comments!