Hawaiian Airlines predicts lower passenger numbers and revenues

Hawaiian Airlines, announced its system-wide traffic statistics for the month ended November 30th, 2018 earlier this week which showed the sunny carrier took more than 937,000  passengers for a ride in November 2018, slightly down on last year, with load factor also down slightly to 84.1%. The airline also lowered its expectations for certain fourth quarter results.


SYSTEM-WIDE OPERATIONS

NOVEMBER	2018	2017	% CHANGE
PAX	937,815	945,568	(0.8%)
RPMS (000)	1,365,133	1,327,946	2.8%
ASMS (000)	1,622,929	1,546,170	5.0%
LF	84.1%	85.9%	(1.8) pts.
YEAR-TO-DATE	2018	2017	% CHANGE
PAX	10,858,607	10,504,678	3.4%
RPMS (000)	15,747,820	14,928,462	5.5%
ASMS (000)	18,434,777	17,361,329	6.2%
LF	85.4%	86.0%	(0.6) pts.

   The Company has revised its expectations for the quarter ending December 31, 2018, that were previously listed back at the end of October.  Hawaiian Airlines also lowered its expectations for revenue per ASM (RASM) primarily due to lower than expected market pricing on its North America routes, and lower than expected demand within its neighbour island network, primarily to Hawai'i Island.  Year-over-year visitor growth from North America to Hawai'i remains positive, but at a slower pace than industry capacity growth.

The company also lowered its expectations for costs per ASM (CASM) excluding fuel primarily due to non-recurring offsets to maintenance costs, and lower than expected benefits expense and project-related administrative costs.

The table below summarizes the company's revised expectations for the quarter ending December 31, 2018, expressed as an expected percentage change compared to the results for the quarter ended December 31, 2017.

Item		Original Fourth Quarter 2018 Guidance		Revised Fourth Quarter 2018 Guidance		GAAP Equivalent		Original GAAP Fourth Quarter 2018 Guidance		Revised GAAP Fourth Quarter 2018 Guidance
Operating revenue per available seat mile (ASM)		Down 2.5% - Up 0.5%		Down 3.0 – 5.0%
Cost per ASM (CASM) excluding aircraft fuel (a)		Down 2.0% - Up 1.0%		Down 1.0 – 3.0%		Cost per ASM		Up 2.3 – 5.8%		Up 0.6 – 3.3%

(a)	See Non-GAAP Financial Reconciliations for a reconciliation of GAAP operating expenses to operating expenses excluding aircraft fuel

Non-GAAP Financial Reconciliations

Operating Costs per Available Seat Mile (CASM)

(in thousands, except CASM data) (unaudited)

		Estimated three months ending December 31, 2018
GAAP operating expenses		$	616,369		to		644,904
Less: aircraft fuel, including taxes and delivery		(147,524)			to	(157,235)
Adjusted operating expenses - excluding aircraft fuel			468,844		to		487,669
Available Seat Miles		5,013,951			to	5,109,912
CASM – GAAP		12.29		¢	to	12.62		¢
Less: aircraft fuel		(2.94)			to	(3.08)
CASM - excluding aircraft fuel		9.35		¢	to	9.54		¢