Hawaiian Holdings reported consolidated net income for the three months ended September 30, 2008, of $6.0 million, or $0.12 per diluted share, on total operating revenue of $339.9 million. This compares to net income of $19.6 million, or $0.41 per diluted share, for the three months ended September 30, 2007. Operating income during the third quarter improved to $27.3 million, compared to $25.6 million a year ago, while higher non-operating expenses related to fuel hedge contracts and an increase in the Company's tax provision reduced net income year-over-year.
For the nine months ended September 30, 2008, the Company reported consolidated net income of $40.5 million, or $0.81 per diluted share, on total operating revenue of $910.3 million. This compares to net income of $3.7 million, or $0.08 per diluted share, for the nine months ended September 30, 2007. Operating income during the nine months improved to $53.8 million, compared to $8.8 million a year ago. Operating income in 2008 includes a litigation settlement of $52.5 million, related to the Company's settlement of its lawsuit with Mesa Air Group.
“The extent of the rise in fuel prices was evident in our third quarter results as extremely strong improvements in both interisland and transpacific revenue were offset by the high cost of fuel,” commented Mark Dunkerley, the Company's president and chief executive officer. “Our results, nonetheless, bettered the sizable losses posted by many of our principal competitors.”
“The retreat of fuel prices from historic peaks reached in the summer will lower our operating costs, but our enthusiasm over this is tempered by the uncertain economic environment and its effect on short and medium term demand for Hawaii vacations.
“Through this eventful year the one constant has been the outstanding contributions from all of Hawaiian's employees. Their response to the collapse of two major competitors and performance under the operational strain of a rapid expansion of our interisland operations has been fantastic. Our team is the best in the industry and our ability to rely on their continued dedication gives us confidence to meet the challenges and opportunities that lie ahead,” concluded Mr. Dunkerley.
Third Quarter Operating Results
The Company reported operating income of $27.3 million in the third quarter of 2008, a 6.9% increase, compared to operating income of $25.6 million in the third quarter of 2007.
During the third quarter Hawaiian significantly expanded its short haul interisland operations, while long haul capacity increased by a much smaller proportion. Since shorter haul operations tend to have both higher revenue and costs per seat mile, this shift in mix of flying toward a higher percentage of shorter segment interisland operations tends to inflate both revenue per available seat mile (RASM) and cost per seat mile (CASM) relative to the prior year.
Third quarter 2008 operating revenue was $339.9 million, a 24.7% increase compared to the third quarter of 2007. Capacity for the quarter increased 2.6% year-over-year to 2.4 billion available seat miles (ASMs), resulting in RASM of 13.92 cents, up 23.0% from 11.32 cents in the third quarter a year ago. Third quarter load factor decreased to 80.3% from 87.8% in the same period a year ago. Passenger yield (passenger revenue per revenue passenger mile) increased 34.2% to 15.95 cents from 11.89 cents in the third quarter of 2007.
