Hawaiian Holdings(US:HA)2021-10-26 16:00Financial Performance - GAAP net income for Q3 2021 was $14.7 million, or $0.28 per diluted share, on total revenue of $508.8 million, compared to a net loss of $97.1 million, or $2.11 per diluted share, on total revenue of $76.0 million in Q3 2020[136]. - The company generated a net income of $14.7 million, or $0.28 per diluted share, for the three months ended September 30, 2021, compared to a net loss of $97.1 million, or $2.11 per diluted share, for the same period in 2020[162]. - Adjusted net loss for the three months ended September 30, 2021, was $48,690, or $(0.95) per share, compared to a loss of $172,664, or $(3.76) per share for the same period in 2020[219]. - The company reported an income (loss) before income taxes of $19,169 for the three months ended September 30, 2021, compared to a loss of $143,584 for the same period in 2020[221]. - The adjusted loss before income taxes for the three months ended September 30, 2021, was $(61,032), compared to $(244,195) for the same period in 2020, showing an improvement in financial results[221]. Revenue and Capacity - Capacity (measured in Available Seat Miles) increased by 488.7% in Q3 2021 compared to Q3 2020, while Revenue Passenger Miles rose by 1,625.3% during the same period, driven by increased customer demand[136]. - Overall capacity increased by 17.9% compared to Q2 2021, but remained down 20.7% and 32.9% compared to Q3 2019[137]. - Domestic network accounted for approximately 94.9% of total passenger revenue in Q3 2021, while international travel revenue was down 88.1% compared to Q3 2019[139]. - Operating revenue for the three months ended September 30, 2021, increased by $432.9 million, or 569.7%, compared to the same period in 2020, primarily driven by the return of passenger travel demand[164]. - Passenger revenue for the three months ended September 30, 2021, increased by $414.3 million, or 1,041.5%, compared to the same period in 2020, with domestic passenger revenue increasing by 1,017.9%[165]. - The passenger load factor for the three months ended September 30, 2021, was 75.9%, significantly up from 25.6% in the same period of 2020[163]. - Domestic passenger revenue during the nine months ended September 30, 2021, increased by 108.7% on capacity growth of 109.1% compared to the same period in 2020[168]. - International passenger revenue for the three months ended September 30, 2021, increased by 1,769.0% compared to the same period in 2020, but decreased by 66.7% during the nine months ended September 30, 2021[171]. Expenses - Total operating expenses for the three months ended September 30, 2021, were $268.3 million, an increase of 136.2% compared to the same period in 2020[174]. - Aircraft fuel expense for the three months ended September 30, 2021, increased by $94.2 million, or 648.0%, compared to the same period in 2020[175]. - The average cost per gallon of aircraft fuel for the three months ended September 30, 2021, was $2.07, compared to $1.09 in the same period of 2020[163]. - Wages and benefits expense increased by $31.8 million, or 21.4%, for the three months ended September 30, 2021, compared to the same period in 2020, due to ramping up of domestic operations[175]. - Maintenance, materials, and repairs expense rose by $29.4 million, or 157.6%, for the three months ended September 30, 2021, compared to the same period in 2020[178]. - Aircraft and passenger servicing expense increased by $25.8 million, or 501.5%, for the three months ended September 30, 2021, compared to the same period in 2020[179]. - Commissions and other selling expenses increased by $15.8 million, or 303.1%, for the three months ended September 30, 2021, compared to the same period in 2020[180]. Cash and Debt - Unrestricted cash, cash equivalents, and short-term investments totaled $2.0 billion as of September 30, 2021[136]. - Total debt increased to $2.0 billion as of September 30, 2021, reflecting an increase of $821.8 million, or 71.5%, compared to $1.1 billion as of December 31, 2020[155]. - The company issued $1.2 billion in 5.75% senior secured notes on February 4, 2021, which are collateralized by its loyalty program and intellectual property, requiring quarterly interest payments and maturing in January 2026[150][155]. - The company raised approximately $1.3 billion in cash during the nine months ended September 30, 2021, primarily from loyalty and intellectual property financing, PSP funding programs, and shares issued through an at-the-market offering[197]. - The company is required to maintain minimum liquidity of at least $300.0 million at the end of any business day as per the Indenture[154]. - The company had capital commitments consisting of firm aircraft and engine orders, including 10 B787-9 aircraft and 2 B787-9 spare engines, with expected delivery dates between 2022 and 2026[200]. - As of September 30, 2021, total contractual obligations were estimated at $5.14 billion, including $2.45 billion in debt obligations and $1.65 billion in aircraft purchase commitments[207]. Government Assistance - The CARES Act provided approximately $300.9 million in financial assistance to support employee salaries and benefits, with restrictions on involuntary furloughs and executive compensation[144]. - The company received a total of $179.7 million under the PSP3 Agreement, consisting of approximately $155.8 million in grants and $23.9 million in a ten-year loan during the nine months ended September 30, 2021[149][157]. - The company recognized $320.6 million in contra-expense during the nine months ended September 30, 2021, related to grant proceeds from federal Payroll Support Programs[212]. - Government grant recognition amounted to $78,256 for the three months ended September 30, 2021, compared to $129,088 in the same period of 2020[223]. Compliance and Future Outlook - The company was in compliance with covenants in its financing agreements as of September 30, 2021[198]. - The company anticipates sufficient liquidity to satisfy obligations and remain compliant with existing debt covenants based on actions taken and revenue recovery assumptions[158]. - The company suspended all share repurchases and dividend payments until September 2022 due to federal Payroll Support Program restrictions[202]. - The company has backstop financing available from aircraft and engine manufacturers to secure financing for capital commitments[201].