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Hawaiian Holdings Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 30, 2009 10:07PM

Hawaiian Holdings Inc (HA) filed Quarterly Report for the period ended 2009-03-31. Hawaiian Holdings is a holding company of Hawaiian Airlines. Hawaiian Airlines is the largest airline headquartered in Hawaii. They are engaged primarily in the scheduled transportation of passengers cargo and mail. Scheduled passenger service consists of daily service between Hawaii and Las Vegas Nevada and the four key United States West Coast gateway cities of Los Angeles and San Francisco California Seattle Washington and Portland Oregon; daily service among the major islands of Hawaii; and bi-weekly service to Pago Pago American Samoa Papeete and Tahiti. Hawaiian Holdings Inc has a market cap of $257.6 million; its shares were traded at around $4.99 with and P/S ratio of 0.2.

Highlight of Business Operations:

· Reported $23.5 million in net income or $0.46 net income per diluted share for the quarter.

Operating Revenue. Operating revenue was $288.6 million for the three months ended March 31, 2009, a 14.9% increase over operating revenue of $251.2 million for the same three-month period in 2008, driven mainly by the increase in passenger revenue.

Operating Expenses. Operating expenses were $252.7 million for the three months ended March 31, 2009, a $20.5 million decrease from operating expenses of $273.2 million for the comparable three-month period in 2008. The decrease in our operating expenses is detailed below.

During the three months ended March 31, 2009, our fuel derivatives were not designated for hedge accounting under SFAS No. 133 and were marked to fair value. As such, $1.4 million of losses from our fuel hedging activities were not recorded as part of Aircraft fuel expense in operating activities, but rather as nonoperating expense. Included in this amount are losses realized during the period of $10.9 million, $7.9 million of which had been recognized in prior periods as a result of adjusting contracts to fair value and $1.6 million of unrealized gains recognized in the current period for derivative contracts settling in future periods.

Nonoperating Income and Expense. Nonoperating expense, net, was $6.3 million for the three months ended March 31, 2009, as compared to nonoperating income, net, of $2.1 million for the three months ended March 31, 2008. The increase of $8.4 million was primarily due to losses recognized in 2009 on our fuel derivative instruments compared to gains recognized during the comparable period in 2008. We realized losses of $10.9 million on contracts that settled during the period, $7.9 million of which was recognized in previous periods as a result of adjusting the contracts to their fair value, and $1.6 million related to unrealized gains on contracts settling in future periods. For the comparable period in 2008, we realized gains of $4.5 million as well as a reversal of $3.3 million of gains which were recognized in previous periods on a fair value basis and unrealized gains of $4.4 million on contracts settling in future periods.

Our liquidity is dependent on the operating results and cash flows of Hawaiian, along with our significant debt financings. Cash, cash equivalents, and short-term investments were $248.0 million as of March 31, 2009, an increase of $42.0 million from December 31, 2008. We also had restricted cash on those dates of $34.7 million and $28.0 million, respectively, which consisted almost entirely of cash held as collateral by entities that process our credit card sales transactions for advance ticket sales. Substantially all of the cash held as collateral for credit card sales transactio

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