While still not doing well, the Hawaiian Air Q2 2024 financial results show improvements in the airline’s financial performance. Unfortunately, there still doesn’t appear to be a path to profitability for them, especially not given the current competitive and economic environment.
Hawaiian started the year in much the same way as it has since the start of the pandemic – bleeding money – though, there was some glimmers of hope. Their most recent quarter was, unfortunately, much of the same. However, as we’ll see with the Hawaiian Air Q2 2024 financial results, things are improving. For example, they didn’t lose as much money this past quarter as they have been in recent times.
Hawaiian Air Q2 2024 Financial Results
In the Hawaiian Air Q2 2024 financial results, the airline reported a net loss of $67.6 million, which is significantly higher than the $12.3 million loss reported this time last year, but is $55.3 million lower than Q2 2023’s loss, and $70 million less than the prior quarter. Revenue was up 3.5% year-over-year at $731.91 million, though the growth didn’t match the increase in capacity, which was up 4% year-over-year. Operating costs jumped 5.3% year-over-year to $0.1505 per available seat mile, which is a smaller increase than the prior quarter.
Liquidity was improved further this quarter to $1.3 billion cash, cash equivalents, and short-term investments. Hawaiian accomplished this by financing 10 of its A321neos, which gave them $400 million in liquidity. This compares to the $1.15 billion the had available at the end of last quarter.
The airline also did a bit of debt restructuring, converting a sizable amount of notes and paying some down. This now pushes their due dates out from the 2025-2026 timeframe to 2029. As Ingram notes, this will give them a liquidity runway to help carry the airline should they run into regulatory hurdles with the proposed Alaska merge, though they remain optimistic (as do I) that they won’t. To be fair, if they didn’t do this, and the merger took a little longer than anticipated, they’d be in trouble.
Fleet
As I mentioned previously, it was reported in the Hawaiian Air Q2 2024 financial results call that Starlink installations are progressing at full speed across their entire A330 fleet, with full integration expected by the end of September of this year. Moreover, as reported last quarter, all A321neos are back in the air, and all are equipped with Starlink.
Unfortunately, things aren’t going as well with Hawaiian’s new Dreamliners. Thanks to manufacturer delays, they no longer expect to receive their third 787 by the end of the year. Instead, N782HA is expected to be delivered some time in the first half of 2025. That’s a really broad delivery estimate, which tells us that Boeing still doesn’t have a full grasp on its production following all of its recent turmoil.
For what it’s worth, N782HA is Boeing line number 1268, with 65 orders yet to enter production ahead of it. Boeing South Carolina is currently building four to five Dreamliners per month. At that rate at least 13 months to work through the current backlog – that’s not to say Hawaiian will have to wait that long for its next 787, three or four are now due in 2025, but it does highlight the supplier challenges Boeing continues to face.
Returning to more positive news, Hawaiian recently took delivery of its third Airbus A330-300F. Four more are due by the end of the year, with three more scheduled for arrival in Q1 2025. Once those three are delivered in the first months of next year, Hawaiian will have receive all 10 of its Amazon-owned freighters, which should further help further bolster their revenue.
Network
The financial elephant in the room during the Hawaiian Air Q2 2024 financial results conference call was, undoubtedly, the airline’s network. Japan and Ocean remain weak points for Hawaiian, which is one of the major contributing factors to their current financial position. Unfortunately, this doesn’t look like it’ll change any time soon, as currencies in these regions continue to lag majorly behind the dollar.
As we all know, this means Hawaiian will continue to focus on the domestic market. This has been evident with new routes such as HNL-SLC and SMF-LIH/KOA. By the way, Ingram notes that they’re please with the results of both these new routes, though they didn’t provide any figures for them. As previously reported, Hawaiian has also been bulking up domestic seasonal routes this summer and winter.
All that said, Maui continues to be a weak spot. We’re at nearly the one-year mark since the tragic disasters altered the west side of the island forever. Yet, despite the visitor industry operating as normal, tourists continue to avoid the island. That’s unfortunate as, not only does it harm Hawaiian’s revenue-potential, but the tax revenues are needed on-island to help with rebuilding efforts.
Credit Card
An interesting tidbit in the Hawaiian Air Q2 2024 financial results call came up about their co-brand credit cards with Barclays. Namely, their existing contract with them has been extended. When the newly extended contract runs through wasn’t disclosed. Brent Overbeek, Hawaiian’s Chief Revenue Officer state”[i]t’s a few more years that we are adding on to that, working with our existing partner that we’ve worked with for 10 years. And we thought it was important to extend that program for a few more years at this time.”
While I know Hawaiian converted to Barclays 10 years ago, I have no idea how long that initial contract was for. Of course, even a short extension has implications for the pending merger, as it’ll force Alaska Air to either keep two co-brand credit card issuers, or buy out the rest the contract with either Barclays or Bank of America.
Hawaiian Air Q2 2024 Financial Results, Final Thoughts
My takeaway from the Hawaiian Air Q2 2024 financial results is that things are slowly improving. However, despite these improvements, and certain strategies undertaken recently, Hawaiian’s ability to remain solvent in the long-term is tenuous. In my opinion, they’d still be better off merging with Alaska Airlines. And though we have to wait longer to see if the merger will be approved, we won’t have to wait too long.