Hawaiian posts first-quarter profit rise on hedging gains

Hawaiian Holdings, parent of Hawaiian Airlines, reported net income of $855,000 in the three months ended March 31, an almost fourfold improvement over a profit of $216,000 in the year-ago period as $8.4 million in gains on fuel derivative contracts offset a 56% rise in fuel costs between the two quarters.

Hawaiian President and CEO Mark Dunkerley said, “In the first quarter, the company did a good job of mitigating the effects of the rising cost of fuel and the tragedy in Japan. Fuel prices have climbed further since then, creating a substantial challenge for all airlines, including Hawaiian.” Revenue rose 22.5% to $365.6 million while expenses increased 26.6% to $370.6 million, producing an operating loss of $4.9 million, compared to operating income of $5.6 million in the first quarter of 2010.

Scheduled traffic for the quarter rose 22% to 2.34 billion RPMs on a 21.1% increase in capacity to 2.78 billion ASMs, producing a load factor of 84.1%, up 0.5 point. Scheduled yield lifted 1.2% to 13.89 cents while passenger RASM heightened 2% to 11.69 cents and CASM rose 4.5% to 13.31 cents. CASM ex-fuel was 9.38 cents, down 3.1%.

Looking forward, Dunkerley said, “We will continue our focus on controlling those costs that lie within our grasp. At the same time, we expect that strong demand in our core markets, the recovery we believe we will begin to see in Japan and the unequalled quality of service that our employees deliver will raise revenues and help offset some of the increase in fuel prices.”