Hawaiian Holdings' Arm Posts Drop in September Load Factor

Hawaiian Holdings, Inc.’s HA wholly owned subsidiary Hawaiian Airlines reported traffic figures for September. Simultaneously, the company has revised its third-quarter 2018 outlook pertaining to a few metrics.

Traffic

Traffic (measured in Revenue Passenger Miles or RPMs) increased 5.8% to 1.45 billion in the month.  Available Seat Miles (ASMs) also climbed 9.6% to 1.73 billion in the period. Load factor (percentage of seats filled by passengers) contracted 300 basis points (bps) to 83.6% as traffic growth was outpaced by capacity expansion.

During the first nine months of 2018, the carrier recorded a 6% rise in RPMs while ASMs rose 6.3%. As a result, load factor slipped 30 bps. Additionally, passenger count increased 4.2% on a year-to-date basis, while the same inched up 0.6% in September.

Hawaiian Holdings, Inc. Price

 

Hawaiian Holdings, Inc. Price | Hawaiian Holdings, Inc. Quote

 

Q3 Guidance

Hurricane Olivia and Typhoon Jebi disrupted the carrier’s operations this September, leading to passenger cancellations and hampering bookings in turn. Consequently, the airline trimmed its projections for third-quarter operating revenue per available seat mile (RASM). RASM is now anticipated to decline between 1.5% and 2.5%. Earlier, the metric was expected in the range of -2 to 0% (year-over-year change).

Additionally, the company increased forecast for gallons of jet fuel consumed due to higher fuel burn in the quarter. Gallons of jet fuel consumed are now anticipated to expand 7-8% in the period compared with the earlier expectation of 5-7%increase.

However, on a positive note, unit costs (excluding fuel and special items) are now estimated to rise 1-2%, lower than the past forecast of a 0.5-3.5% increase.

Zacks Rank & Key Picks

Hawaiian Holdings carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Spirit Airlines, Inc. SAVE, Southwest Airlines Co. LUV and United Continental Holdings, Inc. UAL. While Spirit sports a Zacks Rank #1 (Strong Buy), Southwest and United Continental hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Spirit, Southwest and United Continental have gained more than 25%, 5% and 29%, respectively, in a year.

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