Fed aid helps pare
Hawaiian Air’s loss
The carrier would have had
an operating deficit of $22.4
million
without government assistance
By Russ Lynch
rlynch@xxxxxxxxxxxxxxxx
Federal grants to airlines after the Sept. 11 disaster were not
nearly enough to help Hawaiian Airlines out of a red-ink hole for the final
quarter of last year, according to a filing with Securities and Exchange
Commission.
But the airline's year-end figures show there was so much
unusual about late 2001 that the bottom-line figures don't really tell the
story, though the airline turned a full-year profit of more than $5 million.
Hawaiian posted a net loss of $10.2 million, or 30 cents a share, for the
final quarter of 2001. The loss came in spite of receiving $22.3 million from
the federal government during the quarter as part of the program to compensate
airlines for losses caused by the decline in travel that followed the Sept. 11
hijacking crashes.
Thanks to that financial assistance, the net loss was only about half the
$20.4 million, or 58 cents a share, the carrier lost during the fourth quarter
a year earlier.
Excluding the federal help, Hawaiian said it would have had an operating
loss of $22.4 million in the final quarter of 2001, 25.1 percent more than the
$17.9 million in operating losses for the last quarter of 2000. The latest
loss from operations was also considerably higher than the $12 million to $17
million estimated loss that Hawaiian included in the complex legal documents
related to the now-dead proposal to merge with competitor Aloha Airlines.
Including the federal help, however, Hawaiian's final-quarter loss from
operations for 2001 was only $109,000.
The year-to-year comparison is complicated by a number of factors that made
the last quarter different from other reporting periods in the airline's
history.
Hawaiian had to deal with the federal grant money but also went through
round-the-clock negotiations toward the ill-fated attempt to merge with Aloha.
In the latest quarter, Hawaiian reported merger-related expenses of $3.2
million. Its tax structure changed radically as well, as it adjusted for
future-profit uncertainties that followed Sept. 11.
The airline said it was pleased with the numbers for all of 2001, which
showed a full-year net profit of $5.1 million, or 15 cents a share, compared
to a full-year loss in 2000 of $18.6 million, or 48 cents a share.
"Although the final quarter numbers reflect the profound effects
of the Sept. 11 attacks, they also show Hawaiian's resiliency and the extent
to which we were able to recover, relative to the rest of the industry," said
Paul Casey, vice chairman and chief executive officer.
As the company's recent traffic report for February showed, with passenger
volume about where it was a year earlier, Casey said things are picking up for
airlines. "Leisure travel, and travel to Hawaii in particular, has rebounded
reasonably well in 2002," said Casey, who will also assume the title of
president in mid-April when Robert Zoller leaves that post.
"We are encouraged by the steady increase in bookings through the first
quarter of this year and feel confident that traffic in our markets should
return to full strength by summer," he said.
Since the mid-March collapse of merger talks with competitor Aloha
Airlines, Hawaiian has begun moving ahead to advance in the competitive
environment despite a fall in tourism since Sept. 11. Recently Hawaiian said
it will soon start two new Hawaii-California routes, Honolulu-Sacramento and
Honolulu-Ontario.
The airline is also pressing ahead with its fleet replacement program.
It has already installed an all-new fleet of fuel-efficient Boeing 717-200
aircraft for its interisland operations and by mid-2003 will replace the
DC-10s on its long-haul mainland and Pacific routes with new Boeing 767-300ER
widebody jets.
The Hawaiian-Aloha merger fell through after Hawaiian's board of directors
refused to extend an April 18 deadline to conclude the talks.
Aloha said Hawaiian had proposed a change that would eliminate merger
middleman Greg Brenneman and leave Hawaiian Chairman John Adams in charge of
the combined airline. Aloha's directors rejected that idea, ending all
discussions a month before the deadline.
Both airlines had supported the merger on grounds that new efficiencies
were needed in the wake of the Sept. 11 air travel disaster.
