Hawaiian Holdings Adds Two Board Members; Reports 2020 Second Quarter Financial Results

HONOLULU, July 28, 2020 /PRNewswire/ -- Hawaiian Holdings, Inc. (NASDAQ: HA) ("we" or the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today announced the addition of C. Jayne Hrdlicka, former CEO of Australia-based Jetstar Group, and Michael E. McNamara, Executive Vice President and CIO of Target Corporation to its Board of Directors.

Hrdlicka, who served as CEO of New Zealand's a2 Milk Company after her time at Jetstar parent Qantas Airways, has substantial experience in the airline and retail sectors.  McNamara joined Target in 2015 and in his capacity as CIO has overseen the transformation of the retailer's technology portfolio.  Prior to joining Target, McNamara held positions of increasing authority with TESCO, a publicly traded international retailer headquartered in the UK.

"We welcome the additional experience and perspective both Jayne and Mike will bring to our Board of Directors, particularly as we emerge from the COVID-19 pandemic," said Larry Hershfield, Chairman of the Board of Directors of Hawaiian Holdings, Inc.  "Jayne brings significant airline and international perspective to our company, while Mike adds deep expertise in technology with consumer-focused companies."

Also today, the Company reported its financial results for the second quarter of 2020.

"Our second quarter results reflect the continued impact of COVID-19 and State of Hawai'i quarantines on our business," said Peter Ingram, Hawaiian Airlines President and CEO.  "In the face of these unprecedented challenges, we have taken action to preserve and raise cash and are crafting plans to position us for the future even as we address the immediate adversity.  With our leisure business model and relentless focus on the needs of the Hawai'i traveler, we are positioned to emerge from this crisis poised for success.  I am grateful, as always, for the efforts of my extraordinary colleagues, as they take care of our guests and adapt to this ever-changing environment with passion and dedication."

Liquidity and Capital Resources

As of June 30, 2020, the Company had:

• Unrestricted cash, cash equivalents and short-term investments of $761 million
• Outstanding debt and finance lease obligations of $1,006 million
• Air traffic liability of $554 million

Second Quarter 2020

The State of Hawai'i was under the mandatory 14-day self-quarantine for both neighbor island and all incoming travelers for most of the second quarter of 2020, and as a consequence, the Company operated an extremely limited schedule. The mandatory 14-day self-quarantine restriction was lifted on June 16, 2020 for neighbor island travel only. Following this announcement, the Company increased neighbor island flight activity, but continued with its reduced schedule for longer haul flights.

In addition to service suspension and schedule reduction, the Company has taken, and will continue to take, actions to minimize cash outflow in an effort to mitigate the effects of reduced demand, including, but not limited to:

• Suspended dividend payments on, and the repurchase of, its common stock
• Instituted a hiring freeze across the Company, except for operationally critical and essential positions
• Deferred non-critical capital expenditures
• Instituted voluntary unpaid leave programs and exploring involuntary headcount reduction
• Reduced executive pay by 10% - 50%
• Reduced other discretionary spending, including contractor and vendor spend
• Negotiated payment deferrals with key vendors

As of June 30, 2020, the Company has received $214.2 million in grants and $49.0 million in loans pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") Payroll Support Program ("PSP"). The Company expects to receive an additional $29.2 million in July 2020.

Third Quarter 2020

Due to the uncertain timing of the relaxation of travel and quarantine restrictions, the Company is unable to provide detailed guidance related to capacity expectations for the quarter ending September 30, 2020.  July 2020 capacity, in terms of available seat miles (ASMs), is expected to be approximately 86% below the capacity flown in July 2019, and the Company expects August 2020 capacity to decrease 85% compared to August 2019.  As a significant portion of the Company's costs are fixed, operating expenses are not expected to decline in proportion to the capacity decline.

To further increase liquidity, the Company has entered into additional financing transactions in July 2020. This includes the following:

• Raised $114 million through the sale and leaseback of two Airbus A321neo aircraft
• Signed a non-binding letter of intent with the U.S. Department of Treasury pursuant to which the Company is eligible to receive up to $364 million in Economic Relief Program ("ERP") loans offered under the CARES Act; the Company has until March 2021 to determine how much of the available ERP funds to borrow.

COVID-19 Response - Guest Experience and Community Relations

In response to the COVID-19 pandemic, the Company has enhanced cleaning procedures and revised guest-facing procedures in an effort to minimize the risk of transmission of COVID-19. These procedures are in line with current recommendations from leading public health authorities and include:

• Performing enhanced aircraft cleaning between flights and overnight, including recurring electrostatic spraying of all aircraft
• Frequent cleaning and disinfecting of counters and self-service check-in kiosks in our airports
• Ensuring hand sanitizers are readily available for guests statewide and at our mainland airports
• Requiring guests and guest-facing employees to wear face masks or coverings, with guests required to keep them on from check-in to deplaning
• Modifying boarding and deplaning processes and limiting the capacity of available seats on all aircraft to no higher than 70% to provide physical distancing
• Changing in-flight service to reduce close interactions between crew members and guests

The Company, along with its employees, has also taken measures to support the community through the COVID-19 pandemic, which include:

• Donating Main Cabin and Business Class pillowcases, blankets, mattress pads, amenity kits, and Business Class slippers to 12 local organizations serving the community during the pandemic
• Offering complimentary neighbor island transportation for medical professionals in April and May
• Providing complimentary transportation of food and household items from O'ahu to both Moloka'i and Lana'i in April and May
• Volunteering to support local non-profit organizations addressing the COVID-19 pandemic, from company-wide efforts to individual employee initiatives

Statistical information, as well as a reconciliation of the non-GAAP financial measures, can be found in the accompanying tables.

Investor Conference Call

Hawaiian Holdings' quarterly results conference call is scheduled to begin today (July 28, 2020) at 4:30 p.m. Eastern Time (USA).  The conference call will be broadcast live over the Internet. Investors may access and listen to the live audio webcast on the investor relations section of the Company's website at HawaiianAirlines.com. For those who are not available for the live webcast, a replay of the webcast will be archived for 90 days on the investor relations section of the Company's website.

About Hawaiian Airlines

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com. Follow Hawaiian's Twitter updates (@HawaiianAir), become a fan on Facebook (Hawaiian Airlines), and follow us on Instagram (hawaiianairlines). For career postings and updates, follow Hawaiian's LinkedIn page.

For media inquiries, please visit Hawaiian Airlines' online newsroom.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to certain current and future events and financial performance.  Such forward-looking statements include, without limitation, the Company's business plans and ability to successfully emerge from the COVID-19 pandemic; the Company's response to developments related to the COVID-19 pandemic; the Company's efforts to minimize cash outflow, mitigate the effects of declining demand and increase liquidity; expectations regarding available seat miles for the months of July and August 2020 and the Company's operating expenses in the third quarter of 2020; and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing.  Words such as "expects," "anticipates," "projects," "intends," "plans," "believes," "estimates," variations of such words, and similar expressions are also intended to identify such forward-looking statements.  These forward-looking statements are and will be subject to many risks, uncertainties and assumptions relating to the Company's operations and business environment, all of which may cause the Company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements.  These risks and uncertainties include, without limitation, the continuing and developing effects of the spread of COVID-19 on the Company's business operations and financial condition; whether the Company's cost-cutting plans related to the COVID-19 pandemic will be effective or sufficient; the duration of government-mandated and other restrictions on travel; the full effect that the quarantine, restrictions on travel and other measures to limit the spread of COVID-19 will have on demand for air travel in the markets in which the Company operates; fluctuations and the extent of declining demand for air transportation in the markets in which the Company operates; the Company's dependence on the tourism industry; the Company's ability to generate sufficient cash and manage its available cash; the Company's ability to accurately forecast economic volatility; macroeconomic developments; political developments; the price and availability of aircraft fuel; labor negotiations; regulatory determinations and related developments; competitive pressures, including the impact of industry capacity between North America and Hawai'i and interisland; changes in the Company's future capital needs; and foreign currency exchange rate fluctuations.

The risks, uncertainties and assumptions referred to above that could cause the Company's results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company's other public filings and public announcements, including the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission.  All forward-looking statements included in this document are based on information available to the Company on the date hereof.  The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.