Hawaiian Holdings Reports 2018 Fourth Quarter and Full Year Financial Results

HONOLULU, Jan. 29, 2019 /PRNewswire/ -- Hawaiian Holdings, Inc. (NASDAQ: HA) (the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported its financial results for the fourth quarter and full year 2018.

"Hawaiian delivered another year of strong financial results in 2018, with an adjusted pre-tax margin in the top tier of industry performance," said Peter Ingram, Hawaiian Airlines president and CEO.  "Undaunted by higher fuel prices, elevated competitive capacity, aircraft delivery delays and severe weather events, our employees once again demonstrated why Hawaiian is the carrier of choice to Hawai'i.

"2019 will be an important year for Hawaiian.  Successfully dealing with all of 2018's twists and turns gives me tremendous confidence in our ability to sustain and build upon our achievements in the years ahead."

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

Liquidity and Capital Resources

The Company returned $126.7 million to shareholders in 2018 through $102.5 million in share repurchases and $24.2 million in dividends.  In December 2018, the Company also announced a new $100 million share repurchase program in effect through December 31, 2020.

On January 25, 2019 the Company's Board of Directors declared a quarterly cash dividend of 12 cents per share to be paid on February 22, 2019 to all shareholders of record as of February 8, 2019.

As of December 31, 2018 the Company had:

• Unrestricted cash, cash equivalents and short-term investments of $501 million.
• Outstanding debt and capital lease obligations of $710 million.

2018 Highlights

Operational

• Carried a record 11.8 million passengers in 2018, a 2.9 percent increase over the previous year.
• Announced it will open a technology center in Phoenix, Arizona, in the first quarter of 2019 to strengthen its IT capabilities.

New routes and increased frequencies

• North America
• Expanded its routes to the Pacific Northwest with the launch of new daily non-stop service between Portland International Airport (PDX) and Maui's Kahului Airport (OGG).
• Expanded its routes to Southern California with the launch of new daily non-stop flights between Long Beach Airport (LGB) and Honolulu's Daniel K. Inouye International Airport (HNL), and new daily non-stop flights between San Diego International Airport (SAN) and Maui (OGG).
• Extended seasonal non-stop service to year-round non-stop service between Los Angeles International Airport (LAX) and Ellison Onizuka Kona International Airport (KOA).
• Announced expanded service to Northern California with new daily non-stop flights between Sacramento International Airport (SMF) and Maui (OGG) beginning April 2019.
• Announced its second East Coast route with new five-times-a-week non-stop service between Boston's Logan International Airport (BOS) and Honolulu (HNL) beginning April 2019.
• International
• Expanded seasonal winter service to international destinations, including:
• increasing non-stop service between Seoul's Incheon International Airport (ICN) and Honolulu (HNL) to daily flights between mid-January and early-February 2019; and
• increasing non-stop service between Sapporo's New Chitose Airport (CTS) and Honolulu (HNL) with five weekly flights during the first half of February 2019.

Commercial

• Expanded its cargo services with the launch of All-Cargo Neighbor Island service between Honolulu (HNL), Lihu'e Airport (LIH) and Hilo International Airport (ITO).  The All-Cargo Neighbor Island service, which currently consists of two ATR-72 aircraft, is expected to expand in 2019 with the addition of flights between Honolulu (HNL) and both Maui (OGG) and Kona (KOA).

Product and loyalty

• Announced the expansion of its Business Class auction upgrade service, Bid Up by Hawaiian Airlines, to include flights operating between Hawai'i and Japan and South Korea, in addition to flights operating between Hawai'i and North America.
• Extended its partnership with Barclaycard US, Hawaiian's co-branded credit card partner, under a new agreement through 2024 that includes improved economics for Hawaiian and a refreshed rewards structure for the Hawaiian Airlines World Elite Mastercard and the Hawaiian Airlines Business Mastercard to enable cardmembers to earn more miles faster.

Partnerships

• Together with Japan Airlines, filed an application with the U.S. Department of Transportation (DOT) and Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) seeking antitrust immunity to create a joint venture that promises significant consumer benefits and the opportunity for service expansion.
• Enhanced its comprehensive partnership with Japan Airlines with the implementation of reciprocal frequent flyer benefits for HawaiianMiles and JAL Mileage Bank members effective October 2018.  The enhanced program is the second phase of the comprehensive partnership launched in March 2018 with codeshare flights.
• Announced an expansion of the codeshare agreement with JetBlue that allows travelers from dozens of cities, most of them in the eastern U.S., to easily connect to the Hawaiian Islands via Boston's Logan International Airport (BOS) starting in April 2019.

Fleet and financing

• Secured its flagship widebody aircraft of the next decade with the signing of a definitive purchase agreement with Boeing for the purchase of 10 Boeing 787-9 aircraft, including purchase rights for an additional 10 aircraft, to be delivered starting in 2021.
• Signed a definitive agreement with General Electric for the purchase of GEnx engines to power its Boeing 787-9 fleet.
• Took delivery of nine Airbus A321neo aircraft, increasing the size of its Airbus A321neo fleet to eleven aircraft.
• Entered into two Japanese Yen-denominated debt financings, each collateralized by an Airbus A321neo aircraft.
• Took delivery of an ATR-42 turboprop aircraft in June, increasing the size of its 'Ohana by Hawaiian passenger turboprop fleet to four aircraft.
• Increased the size of its secured revolving credit facility from $225 million to $235 million and extended the term through December 2022.

People

• Contributed $50 million during the year to its pilots' pension plan. The plan's funded status improved from 69.6 percent funded at the end of 2017 to 77.4 percent at the end of 2018.
• Celebrated the beginning of its 90th year of service in the Hawaiian Islands with a company-matched employee giving campaign that generated $187,000 in donations to non-profit agencies across the State of Hawai'i.  The 90th year fundraiser is in addition to sponsorships and grants the Company provides annually through its Team Kokua program and Hawaiian Airlines Foundation.

First Quarter and Full Year 2019 Outlook

The table below summarizes the Company's expectations for the first quarter ending March 31, 2019 and the full year ending December 31, 2019 expressed as an expected percentage change compared to the results for the quarter ended March 31, 2018 or the year ended December 31, 2018, as applicable.

The Company expects its effective tax rate for the full year ending December 31, 2019 to be in the range of 25 percent to 27 percent.

Investor Conference Call

Hawaiian Holdings' quarterly and full year earnings conference call is scheduled to begin today (January 29, 2019) at 4:30 p.m. Eastern Time (USA).  The conference call will be broadcast live over the Internet. Investors may 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, the call will be archived and available for 90 days on the investor relations section of the Company's website.

About Hawaiian Airlines

Hawaiian® has led all U.S. carriers in on-time performance for each of the past 14 years (2004-2017) as reported by the U.S. Department of Transportation. Consumer surveys by Condé Nast Traveler, Travel + Leisure and TripAdvisor have placed Hawaiian among the top of all domestic airlines serving Hawai'i.

Now in its 90^th year of continuous service, Hawaiian is Hawai'i's biggest and longest-serving airline. Hawaiian offers non-stop service to Hawai'i from more U.S. gateway cities (12) than any other airline, along with service from Japan, South Korea, Australia, New Zealand, American Samoa and Tahiti. Hawaiian also provides approximately 160 jet flights daily between the Hawaiian Islands, with a total of more than 250 daily flights system-wide.

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 expectations regarding available seat miles, cost per available seat mile, cost per available seat mile excluding fuel, gallons of jet fuel consumed, fuel cost per gallon, and economic fuel cost per gallon each for the quarter ending March 31, 2019 and for the full year ending December 31, 2019; the Company's expectations regarding operating revenue per available seat mile for the quarter ending March 31, 2019; the Company's expected tax rate for 2019; 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, as the case may 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 Company's ability to accurately forecast quarterly and annual results; economic volatility; macroeconomic developments; political developments; the price and availability of aircraft fuel; fluctuations in demand for transportation in the markets in which the Company operates, including due to the occurrence of natural disasters, such as hurricanes, earthquakes and tsunamis; the Company's dependence on tourist travel; labor negotiations and related developments; competitive pressures, including the potential impact of rising industry capacity between North America and Hawai'i; the Company's ability to continue to generate sufficient cash flow to support the payment of a quarterly dividend; changes in the Company's future capital needs; foreign currency exchange rate fluctuations; and the Company's ability to implement its growth strategy.

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.