HA - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to Hawaiian Holdings, Inc.

Second Quarter 2021 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alanna James, Managing Director of Investor Relations. Thank you.

begin. may You

Alanna James

Hello, Quarter Doug. welcome Hawaiian to Thank Results everyone, Conference Second XXXX Call. Holdings you, and

Here with Vice me and in Officer. and Honolulu are Peter Chief our Officer; Management Network Financial Overbeek, Shannon Revenue Okinaka, Chief Ingram, Brent our of Senior President and Planning; Executive our President

trends, should our an We an continued of performance the provide and for team Shannon of an our access priorities attendance release also press our members have questions. update up out impact on the provide end and we remarks, for business, our on for will open to management about several our other today. the of the and overview cost Time will and COVID-XX Q&A. on have including went will update Brent X:XX provide Eastern prepared the of in that the Peter XXXX. everyone liquidity. at now, will an At performance call update By commercial

If of our release, you've page Investor hawaiianairlines.com. it on the not is website, Relations available received the

adjusted call to refer website. can to page numbers found press today's metrics our today, end numbers our release detailed the non-GAAP of of at at we Investor non-GAAP and metrics. times on posted GAAP the be will reconciliation of and During A or Relations

to on materially undue forward-looking as refer and recent recent be plans for We Form therefore, factors performance, includes those XX-K additional reminder, risks and the make well detailed most to with subsequent future This the as potential and guarantee financial I These do reliance filed future in including from filings of them. placed differ statements, should over projected may upon statements XX-Q annual the actual not cause a future will and your our and now also questions. a to on As Forms report performance. X-K. the subject about more following prepared forward-looking response results remarks any uncertainties in statement. not and reports statements you SEC are Peter. operating turn to Management Holdings' to forward-looking Hawaiian that could contain call discussion the filed statements

Peter Ingram

everyone, you, Alanna. joining us Mahalo, thank always, as and today. for Aloha,

make During quarter, towards we recovery. second the continued to strides

it results every financial expected Our recovery when the at beginning would have of than at in we belief and were the that the but well on is occurs, the better lagging, routes. beginning particularly period propelled we of our have International clearly what rebound of will of the be purpose we guests the mainland in strong challenges robust. U.S. XXXX rebuilding facing job demand predicted by with day reflect ahead Pacific people to goes to out every an an do They in spite our as My who continue them. embrace and caring to for network outstanding and our connect environment. Aloha appreciation our values our our ever-changing always team of

returned, parts passenger in downsizing business. we have hiring from has moved volume of many to As our

ways company. for a slower were to in that path This, hiring closer restrictions. remain the growth nonfare XXXX encouraging revenue demand back is continues the to and end for Hawaiian turn, towards albeit even relaxation all we America the and year, miles. travel all by seen will than swung to has Neighbor baggage like for each conditions groups We pace mode categories last America pace work recovery that residents the levels. by go to of at in Comfort, the of spoke, leading geographies. fact, a vaccination Korea, have passenger aided grind thus provided as it see to we of recovery, routes lower of the material Island to U.S. remains in our Australia stunted our rates for today. levels, the in It carrier prepandemic exceeded and in case from still In us virtually meaningful June, Extra as prepandemic have of Mainland, the North Zealand low recovery levels, different Japan, and digits we traffic in to islands. in remain the parts business. The the our the visitors recovery choice major X have remains Notably, mid-single of North International relative When prospects in volumes, the border to reopening. South likely any some is meanwhile, New far to

in travel travel when several lead Since encouraging vibrant signs improvement vaccinations positive we any to in the have results, in of in in state's significant Japan seen Hawaii demand And rebounds. a changes are note pace the spoke, as through response reflected our focused be to asset don't recently inspire and reopening has inflection while third June from last Travel we more program. meaningful for in XX. quarter While demand, Neighbor accelerated being when will And restrictions can't to these reflected have easing forecast perspective particular. eliminated our international this a to leisure Safe completely a of we we these as seize trends of precisely been Island both be in to restrictions Travels confidence opportunity to demand robustness on staffing recovery. South are Korea an expect trends prepared in we to there and the the an U.S. of continues

spread other on of we And serve. of of been vaccinated. X, Travels the attribute of July seen achieving on keeping program be an eye been sustainability have with a have as one But to U.S. has with to we carriers, Safe we can Kuleana reinforced variant its you, are prepared committed the many to anyone we the July we X, impact corporate On commitment Like vaccinated on end. are demand our date, we second our will of To no the are publication that we traveling report. geographies throughout with net-zero crisis, all XX% on to nimble. the impact the discernible domestic in carbon of the Along testing Delta and annual day we of governor island of indicated the based rest bypass which importance delivering middle that on carbon we us reduction this. have The of are As Unlike residents of the can Pacific, the the proof flight against by emissions every really [indiscernible] quarantine our Hawaii fully in vaccination. and reminds an XXXX. goals. peers,

the accountable the with expect much But emissions have to and Kuleana carbon the of from milestones XXX of Our AXXXneo, introduction to next introduction to intermediate year. report is we our the for fleet achieving us the renewal, keep continued particularly benefit to more there along and benefited way. help us the substantially do will see

I'm environmental, part ensure well-being place. of island we and have the and have community of giving our proud year. this As to an volunteerism contributions community, this difficult through supporting the corporate economic responsibility employee made we profound social of also to incredibly a through

Hawaiian workforce We're managing engaging great are and facing place feels a of build around issues challenges ensure that our to very heard We diverse work a impact and including dialogue own justice to in social addressing and some looking remains valued and the inward and also inequality. the career. our tourism of of community,

position will half XXXX, our accelerate even more to and our the in second we market niche. As that we prioritizing the initiatives look of are pandemic recovery from be us competitive to out

to network continue a will as on network focus rebuild We improve. international conditions our with our

to of our we Underscoring our We commitment formula our doubling opportunities. for all of Aloha are market beyond. award-winning hospitality ourselves investing in ho‘okipa, that differentiate is competition. to to positions is this us And in and technology down to are from success dedication XXXX our and facilities lokahi on to to and and winning connect service seize Malama, Po'okela. commitment and people a This purpose with our values the

call the our Let details me provide outlook. performance to more commercial Brent on now to over and turn

Brent Overbeek

Thank you, everyone. Peter. Aloha,

by was in Our end X was the XXXX decline guidance was XX% and on down of loyalty. down all than other quarter compared year-over favorable about quarter down cargo at across revenue second driven geographies. revenue the second of while strong to in revenue revenue Passenger our XX% X% capacity. performance and better of continued updated Total our expected a was only about XX% years, performance

first driven primarily at experienced was traffic XXXX reflects Our the capacity demand compared in XXXX, sequential performance of second fares capacity. significant back levels, North this average By given XX%. in that the to lower end rebound improvement quarter, the of America. with quarter elevated America substantial the quarter-over-quarter to albeit revenue volumes by surprisingly, North revenue our Not were and we increasing industry

America network Las routes. and our the and Austin-Honolulu During returned to our prepandemic of we North restored seasonal launched Vegas-Maui have all now our the Phoenix-Maui quarter, routes,

Our performing well. premium products are particularly

XXXX front and We versus continue PRASM May, each in with for June overall. of strength front cabin see to cabin the our in quarter favorable

continue trend positive a ahead to and during also trajectory, month the relative months expect is Comfort We factors in remainder book year. revenue cabin are improving of XXXX the strong average on very this the for to fares load each quarter. as the Extra front

the are improvement by of Our nonfare revenue reached levels. revenue card We quarter. products other the our performing end sequential the And had quarter, in credit well. co-brand prepandemic bag fee meaningful for saw

with consumer during in travel by as Our offer engagement best-ever credit in well the resurgence was driven as card revenue a spend recovery strong continued matched quarter. performance the demand our

spend strong so and far in see card continue acquisitions We to July.

booking ahead, the we're second the by encouraged activity half we've Looking for year. of the seen

visitors operated we our third our up our to We ahead quarter Hawaii end the Safe of XXXX, factor local we the to quarter. then arrivals while in our into the schedule July for Island Neighbor reduces in early, levels to in and Neighbor June. continue travel and quarter. material it testing are and throughout the and fourth leading on to ramping already any went Island is positive the quarantine in in this of changes in quite roughly bookings, compared that guests. bypass from XXXX, not effect of quarter XX% build acceleration for for progress back response recovery Hawaii complexity better-than-expected the quarter development vacation demand that view And our to steady restrictions about program for of a strong. drive to book vaccinated our as was both month network with line revenue second X. third XXXX. the loosening The In residents allow XX% to it's We all booking event, the demand load expecting initially residents In geography, given in saw mid-May, eased for We vaccinated performance and both restrictions to we're travel the ultimately to of as Travel still Our a about mid-June. quarter in saw cost

America recovery of pace these be tempered markets we third by quarter, are Island and to direct our spite our load the near-term increase performance and market, connecting encouraged by the absolute international our forward, approximately the the will Neighbor of XXXX Island -- continue in and schedule fly the moving of to we right relative North and to Neighbor sorry, Going recovery Neighbor an traffic. both of direct in Island XX% lack on the factors, In in of expect factors direction. and expect

the XX% second network operated of the On front, international we quarter. just in our

any third driven In quarter. any Korea, we starting easing once-weekly Games the Games incremental not in Japan, X, least we've the September. our later by on early Samoa of Looking in until improvement August Olympic recovery and marginal of seen quarter, the scheduled after travel service at do not expect conclude restrictions our Paralympic anticipate and American in South reinstatement frequency changes, to ahead and service to only capacity Tahiti likely in the some one

we're planning restrictions now, for in for of we are the quarter, third lifted. incremental As not any preparing Japan are but frequency when

to for our quarter, system level we will for Hawaii positive response the travel and resume demand it the XX% XXXX. up restrictions. not of pent-up year ongoing and the are Rolling their confident restrictions of third much at be all in about due of system the compared operations we ongoing As down to for are be for to to between a level international down expect a restrictions Australia do markets, XX% and capacity expect will travel between New and Overall, the remainder when eased. despite our XX% Zealand, the expect XX% we revenue

be the announced intent over further our revenue revenue with down we've which long our the will legacy RM road, system driver to term. Looking of management PROS meaningful replace Advantage, a improvement

solution, We're turn have Shannon. which of system long-term will this XXXX. We ways forecasting our sometime go the excited value a With begin to half first business. over using the revenue to and call to implement in that, management the new I'll implement to and enhance to world-class and it expect provide capabilities our to

Shannon Okinaka

Thanks, Brent, for and us today. thanks, joining everyone,

loss share. or the For an $X.X in quarter, net quarter. with adjusted We additional cash we the $XX.X billion $XXX funding million investments, the PSP receipt second short-term in of closed the million reported and of an quarter $X.XX which per during includes

$XXX $XXX adjusted driven XXXX. the debt was end million quarter, XX It at from beginning as well levels the generation of an to also net million prepandemic improvement Our of compared an to of represents $XXX June when by PSP as the of incremental million, improvement of funding. compared operations as cash the

end in decline XX% favorable which our to For excluding our the total compared in same at the quarter, second is expenses, on down were the of items, XX% about period XXXX expectations. operating capacity, a special

quarter performance few per These favorability onetime solid fuel for the driven well was higher-than-expected cost across as Our offset a credits. cost various $X.XX gallon. by as was cost which slightly categories

lower flying. We our These amendable resumed of operating higher costs, excluding include items represents assumptions The of with airport to expect on airport increase the mechanics total contract a associated the quarter-over-quarter XX% international to in to negotiations. driven with third to quarter have sequential we XX% more figures rates bigger XX% with capacity. related for preparing costs XXXX among IAM our prices, special resumption third employees, our not to others. contract recently and The do costs is fuel down and quarter variable whom operating by IAM related the higher XX% any compared costs be about to schedule,

So item. let for a last me that moment focus on

expect unit And improvement. second. readily this have the of to in lower in level As fourth fourth business, a international we resulting recovery cost are CASM be rebuild to than possible we begin that improve schedule to if quarter we we relative Korea and our XXXX, we not terms our training the that have activity. to ensure in may resumes special ex is return costs, to conditions, Even the for we term, staff happens. current ensuring quarter, is on the half early third expect to does and fuel appropriate the in our continue planned absolute the preparing Based the particularly surplus in If but as into our we resourcing Japan continue leisure business labor are higher-than-normal and back and recovery planned, it we fourth our in near some business, ex we're unit our recovery quarter it expect ramp-up capitalize international to focused for the materializes on with the available, further cost risk international we when positioned items outcome. international international of both on believe quarter, If to we and accepting our XXXX. demand

gallon costs, to fuel our per levels we're transition in fuel similar capacity, time, of not At third positive XXX quarter, we're place margins million throughout price our hedging conditions of as million prepared operating excluding from our levels EBITDA but $XX a quarter. encouraged to have the fuel on which comparable focused expect We're in for EBITDA does not third any positive network. the improve expect ex to range improve include Looking we the negative sight to $XX in have fuel a $XX from million in should hedging. from are of conditions warrant. line and forecasting demand negative any this further we we CASM quarter generation Despite to impact further be to our any market increase our we once hedging We're of adjusted costs. to ahead, resume do second the [$X] impact XXXX that in improving

to in returning short-term long-term profitability As we're business. remains focus, our investing also of a the strength

drive management and come, of which years our distribution, revenue the service. As system, enhancement new Brent revenue a continuous in we're will in the improvement mentioned, supplementing investing product to

our our demand for call dedicated we complex have initiatives And on and at domestic can and guest the international to to training excited about modernizing of simulator recovery, in quarter. with business. the we gain this opening And We holds. also the in we're what technology open the and on that, focus improvement to continued of training confident facility the new flexibility. of our numerous is operations benefit the Honolulu that our in XXX while that transition uncertain, also a our timing We're is up are the It's a have gate still Honolulu will road cost questions. the long-term success excited experience. recovery efficiency about future encouraging including progress, of and to We're

Operator

[Operator line Our Keay with Instructions] of Research. Wolfe Hunter the from question first comes

Hunter Keay

any the with while. a it's know replaced about, that these if electric? fits mean, a COX-emitting really than any think XXX about about there much I other on you this eVTOLs. we different airline you've But Peter, investing Is with are eVTOLs I the better replacement by talked these all and aircraft? go call. ESG airlines how given really scenario a can for keep hearing ride think you about But the aircraft the stage of, potential is with length been leap it and over an other scenario just I XXXs, weather Hawaiian there electric it, and to straight where talking

Peter Ingram

question, interesting Hunter. It's an

machines and that get really about is that. you people miles the there. is than That do an urban applications. in the mobility, to the the Islands an replacement XXX XXXXs is here. electric X suitable be as of an from and of aircraft a more replacing one certainly, the number today require those an that challenges think suitably and yes, size think each a eVTOL on a the of look middle equipment X,XXX that the passenger And -- are probably of electrification the replacing It's that about point we things future fly limited a trying of we specific for the that to the Neighbor the XXX for understand we've in it said, has answer is miles to is, application provide And little your miles. got year, can airplane at we're between starting lot But by range. aircraft envisioned may more of being their removed a But the have more and the a million interesting for considered question get are to between understand with be is of but think direction Neighbor X appropriate to the some across it, XXX. of landscape still that that the the X I of And before to aircraft electric or we bigger foreseeable technology when prospect manufacturers we than technology are to some the lot travel the replacement going. think ocean a I prospect I before certainly it that a is currently routes producers see traffic X designed generation that flies design Coast West because and The it, typically Island off. ways of to really are As that aircraft of at

Hunter Keay

exchange OpEx have without much analysis XXXs, mean, you on done granted also And issues. walk given imagine, then But can interesting. Okay, we've these Boeing's probably, would really I I mean I might then much away I just for more an planes? talked -- you cool. save you need But know that, CapEx. And too. in do you how about on penalty the that's

to fleet. that where an in scenario all worth world XXX is complexity that Just you new -- to not decide I widebody this the just AXXX we're mean simply switch a there in? is it

Peter Ingram

the fleet the advanced environmentally little that a aircraft and a modern XXX of it But to add requires transition, through from of the you it period and fuel-efficient transition, it most also does go benefit of you remains cost. a benefits it still that and flagship generation of adds anytime bit and to the be new And and evolution we positions through go technology of incredibly complexity through to network. Hunter, We're fleet manage some efficiently can. There you excited as we working it. of as that is of very prepared destined get that, suggest, but will the transitions, is as as through our effectively transition we're be, and the part to efficient.

Operator

question comes the of Our Catherine with next O'Brien line Goldman from Sachs.

Catherine O'Brien

for the first one Maybe Shannon.

higher the to rest holding industry, balance the than typical very a due like liquidity COVID, to you're of understandable. on So

to to are what As prepayments? down next be on assume deploy we pay to Or look forward would that? to trigger first cash? debt, should And priority that how we about thinking any use thoughts you you year, the including would perhaps it

Shannon Okinaka

focus and Catie. the Thanks, this earlier of year for perspective. stand enough Yes. I lasts. obviously, that's last from comfortable mean, -- we liquidity do the where cash first rest pandemic, we Yes, however, our And a it feel to long was obtaining year

through we've we sheet think and do are some working kind really debt expensive we've this buckets with that what early retire that got doesn't delevering. frankly expense make And because have make of pay mentioned the expensive it's I a X got then before, really, debt. debt but got of so cheap. little I balance more We've it sense cheap prepayment early. And the We penalties to can that off some

challenge working through of we negative the better is the debt net carry than were with I where that. in our we're gross prepared bigger remarks, is like our prepandemic. the associated actually because amount But debt said So the

past, positive negative lot we're of carry, can have And the ideas the -- we in a of do to from also lot but to initiatives got a looking we different ideas working areas So we've had one invest. sheet, balance at that with ROI. of manage and through to how we've of just we what ideas can analyses and reduce continue

also how both of about cash sheet to all can greater well us profitability but we when creative on be position to our the returns. use So for network balance we're the trying

Catherine O'Brien

in as with to aircraft balance business. the allocating of Or after at investments? cash of that I sheet, the balance ROI there's more follow-up investing guess quick cash investments maybe also follow-up, back looking are those you're the sheet? that. were we these the idea talking about on of a incremental outside And And potential a between the projects, aircraft quick couple

Shannon Okinaka

Yes. No, I'm deliveries. a I We're at for more least -- technology with bunch of our of think XXX the we've mean, that. short I got the plans outside got now, aircraft term, in projects. looking a little bit We've

have we're on, looking cash. We we're some different working at projects deploy facilities and just to ways the

Catherine O'Brien

you Okay. shoulder seasonal of Thanksgiving anything lot in periods a anything Got then interesting off some And leisure of the the demand or out it. perhaps I drop current period. are Makes further break less guess for or in sense. Christmas bookings, in your fall unusual a of seeing to

currently factors I book ahead of would at load in prepared XQ were fares like, you hear be It where look this think said too. to the remarks, in running XXXX. great you point what

Peter Ingram

Thanks, Catie. Sure.

days. some curve cases, and of elongated kind historical really many our out in So curve kind now it and we was in really in in seeing we were in talked quite advance, of like XQ, has compressed. working of as we're and XX had booking think we year, even earlier a stronger -- have further book through the actually advanced XQ looks when outside compressed and we particular, respects I It booking

of were kind early we where evolve year think -- customer and we what XXX real demographics North in similar of unsurprisingly kind I both terms to we overall, before. a kind to of curve No, were continue in closer back booking to of of in So America. from the terms

cabin leisure a are customers good traveling of themselves traveling that our booking is terms still we're the over of back see to opposed in continue those second a some lot individuals to see in to bit of getting in a larger little in family particularly off convincing than really, the than traffic where look holidays a to fourth later bit really were in We in we We bit And and as they of the traffic the little and performance, younger. to had where demographics So bit. terms older pushed front travel. a they're tended of of strong the the main and business as terms the groups kind little size, holiday comes really periods. we in but see more encouraged both and continue people start, parties a cabin, larger curve out performance of certainly quarter, quarter,

In quarter environment, the pervasive think that's discounting is fall. be there of Industry XXX%, third fair continues a pricing amount unsurprisingly, as for to the XXX% and terms of I of in available quarter of get market XXXX. capacity we it's into the up,

up value period. of So formula compete pressure term of having we things good for we've got think products. have seen the But the to for And outside in further and the there, little America some holding we well there are overall, our in pretty North right the summer. as right the we long terms get over guests a

Operator

question Cunningham Partners. MKM line next from the comes of with Conor Our

Conor Cunningham

just sizing next a year, for reopen to so. know lot of out that the about assuming think and just wanted to on when things look the like get like is But fourth market hands, to South Korea expect thoughts your It stuff seems continue network is going XXXX. Japan your international but in be I get to expectations is that what quarter, and to curious So your of back which in you we good. of your

Peter Ingram

Yes. Conor, Peter. it's

and add start over it I'll me to Let to a then Brent color. turn little more bit

All to the likely X state in XXXX major to that of and the is the quite viewed similar some a Our for prepandemic we've at thinking we we first point recover that have least geographies is among end serve. international actually think at are I now along, considered or right while, the international Korea portfolio Japan portfolio.

we is of recovery. that a internationally. is travelers global months schedules I Australia expect although that changes to and We believe international then Pacific we won't we to impact Japan. that. are lag know entire is likely it North really we the the think very that still that by seen of going working appetite coming to longer planet. half around the on Australians Hawaii travel Brent much year, some Zealand to New And embark pent-up the in have are feature pent-up available a in in Hawaii of travel the several unlikely repeat most a And eager for said, start But realization great the we're publishing able travel are we And past for And act quarter demand America of rim. it's the of is the is in that itself that a that sort rebound America harbinger again that again. revenue from the we to I to the real when actually we having North fourth policy that the for same the and means some before think to experienced in, we leisure know to recover desire as see over time just once any what's there's really we've more year. to think wait voracious And people from closer on traveling little happen that of fact of but necessary next a we to get assumption and in have, until what we this the to reflect do in back expect can have visitors

Brent Overbeek

Yes.

the really only of add believe the to I is market. seen think we in would Peter's we've thing everything heard I that and in do kind comments

it be So we're leisure It that. in may of back. to books, bit but traffic little looking how to really terms a look forward different going is

will of what participation to that similar we we little compete some there terms network Peter it little in to be some trade-offs than on broader in a the as XXXX, was some we as of our of think We're bit eye pretty keen where as overall, that will our a be aircraft. In we'll to so likely occur will a those some mentioned now to likely well that I get more take eye and market terms critical in in larger competitors. and apt it markets of as happens When North changes changes there's some by were, place market keeping how on constrained before. that in of we America a

Peter Ingram

add. one final thought just I'll And

important confines the have America as other we safe I recovery a of the to reopening to think also present of that or of think travelers the early done stead year visit as will has standpoint as occurred. country begin that virus, good conditions fact a their place are Hawaii the has is leaving good when about for be international of for in North visitors later the they next. the One benefits to And own managing and this positioned the us that job, the spread from

Conor Cunningham

of lot there's costs color. then the all as you may appreciate but missed I great. restart you a That about I it. quarter this cost, I been on Okay. And talked little was so on have about whole bit, may have But throughout this from discussion think, everyone. and -- Shannon, a network just

-- far far expense maintenance continues not levels. XXXX to but below pretty like below, your below So track

So I to deferred Like happen just up or like need point? is there's on curious sort been bubble but that international left maintenance that may be you the may start that maybe would widebodies lot a what imagine I'm deferral made potential there's that's as not, restart to a of later do on at some again? a

Peter Ingram

that Conor, start me let on one.

fact is being on lower likely costs the hour lot driver the power expense, for by is of our fleets think a the all biggest based side on contracts. particularly I maintenance the that maintenance engine our of the

in to our And so back. costs And accelerate costs maintenance we flying less, as period. lower come begin fly that we those maintenance we as have

biggest So driver. that's the probably

You've seen heavy have we of not deferred lot a costs. maintenance

fold have now, actually that's normal work aircraft not maintenance cycles. but We of enormously some airplanes XXXs checks those that a and that the we most we their material. get are back back -- operating We had to deferred couple in now of our on have underway

months point. We But are on this to taking that we're the over next really side of the several some at snapback of events maintenance the huge done. paint in expecting downtime get some aircraft of it's not advantage costs here a

Shannon Okinaka

really if long-term do didn't you our kind parking of any Conor, remember, Yes. aircraft. we of

done a to really Really, the So back. that it bring be on there's not few to of maintenance put not cost lot a needs of XXXs, to work lot down back but a side. aircraft bring maybe we

point, advantage fact, matter took to do deferring. of to a we more work Peter's As been had of the downtime that on airplanes we

Operator

of Linenberg with Our next question line Deutsche the Mike comes from Bank.

Mike Linenberg

dropped to for And quarantine testing domestic guess international? fully July X, back not where I the state I want that I vaccinated all go rules. and was what, Peter, guess, passengers, this to

Peter Ingram

that at being distinction recognize of some who there, state better goal and that handle hope place that was this Hawaii extend It's people anyone to United just in I belief how through extended administrative I It's vaccinated elsewhere, only Mike, thing to more they're That's in recall, really sorting then that to would and of to the may were of it's it, the you the an the point. And people's if other It's able a than -- a vaccinations. vaccinations vaccination you people to were was that of initially, for be for are our and exemption correct. documentation. administratively. government really the following in think domestic than And the them vaccinated sense the matter would understand going certainly States.

Mike Linenberg

Yes.

U.S. it when seems issue. U.S. it or so some just just Okay. vaccinated guess the cases, percent they're vaccinated vaccines. you the states. now and number -- look that I fully hopeful It Japanese And sense. with like we're does That fact, at some in are odd, sound makes because in that it's I of an administrative I'm rivals close --

Or issues just just we're like of it that something this this go administration time? very is close could So that the feel on? for because does it's on some

Peter Ingram

think in but test is the travel at go course it's of just international fact quarantine have of in to the are I XX within those requiring COVID-XX restrictions of of for geographies for a paying a have COVID on also it's a tests of hours we they the X face with a one is question Hawaii, Japan their which someone and home the currently another arrival the travel. to Well, one here returning before not visitor, that what that challenges an despite international back, after period enjoy test would

it's about happens they the as restrictions, know of out, just what Olympics we the the somewhat on also focused Brent try extent will particularly after which international and view for Japan, not that, as really Hawaii of we towards can that focus So place in of and pointed terms the has but in about that probably conservative restrictions. that as much think more their appropriate, And that and because sure do that that's the made case something Japan we're the getting been has influence policies in possible as I that to it's can for been we and their execute making a people, how safely COVID-XX. preparations them they

Mike Linenberg

carry on sort a What Many X-, widebodies, sense. then talked is through headwind. There's be the talked that's there And quick is a clearly underutilized. Okay. there the cost any they're that X-point give you That's Shannon, feel aircraft underutilized way can a or pretty couple prepared year. Shannon. that some the because can some the out I of got -- about us additional into headwind other But earlier. grounded are next are one idle. to helpful. like That that? know you that carriers of you CASM them these makes are help? And people a know sizable. I'm X-, fact you for all numbers carrying these that that I just there I'm you CASM estimates just Any -- and widebodies. to throwing to carry international

Shannon Okinaka

Yes. Thanks, Mike.

of during year, We labor optimize over. we're the schedule that we aircraft optimize head. a of -- those ramping at our number the kind utilization. that -- have -- up, I don't we did costs. because do created I we past his flying my top Brent and couldn't what to no, is mean, And switching team Sorry, to as

I to come Now But end I'm sorry, don't I that to of depending utilize utilization. the out how international think figure up, impact as have on XXXX Brent CASM had standpoint. we'll from how aircraft right of the number XXXX, as mid lower to far -- ramps profitability now have aircraft mentioned a utilization best

Operator

Our next of comes line Helane from Cowen. question with Becker the

Helane Becker

international you growing about thinking available As that to you makes you about sense for to to think how in back? you're North you markets fully just talk fly comes before could that America, about maybe be might

Peter Ingram

Orlando in this. of if it see a Yes. Obviously, again, year little and thinking beginning about color for and our how I'll with cities some been on to March of Brent about were top had flying April, -- new on any time consideration considering. we wants the and add that talk some added bit this new we're and that list of Austin a Ontario we couple for

into points that also map adding of over by initiatives that Long and several follow-through on was lot our the extra We of a last really added of Beach connection, XXX lines we between adding our served. route years service extra a a Maui already

advantage into waiting which cities about in have how availability recovery availability them we for serve and for take crew are be about Seoul. One aircraft new be not aircraft careful think obviously to we that the to able to fleet very lot we like of of have enthusiastic want while a want and international we we is adding about to our of the going the eventual we're challenges are Tokyo not we're markets that Osaka core when back to our swing we to

start-up cities. the term, but we're new advantage costs take And associated and bit with to a the desire chase balance in those revenue little so short near-term trying incremental not incurring opportunities to long-term of

on more And done would something I short couple. probably be so, the already term, we network. were so doing we about But are we've think that thinking a if points more

Brent Overbeek

Yes.

that on would thought XXXs. some done kind their it where markets I at would few We the some had some be this were markets stead. that a think XXXs. potential upgrades operating We've XXXs of economics, planning We were of to we in looked fly it be sensible to summer.

existing connecting terms continue of what to Peter in dots mentioned as those fall So kind more well we've the efficiently. as revisit of done into that. We'll

Helane Becker

helpful. really That's

was served The Or Coast. on on other aren't you the I are airports any into question issues pipeline. you having getting West by fuel But fly the think Coast? I any had don't on West fuel that

Peter Ingram

fuel at point issues We're with not this supply. having any

Helane Becker

Yes.

far my charge this maybe, question million $X of which impact should about thinking modeling termination shutdown we of and just $X not... I -- Ohana I saw is revenue the we next Shannon, impact the CPA think the I for sort from the Okay. year, of Yes. by you. And impact about million meaningful last it's million revenue agreement. if from first any Is that then saw on is the related is quarter the But as to away, $X.X think of a there Hawaiian. about know.

Shannon Okinaka

it really, going So to Hawaiian haven't Helane, pass revenue But for about Ohana while. I'm impact. a we to Brent over to been by flying the talk

Brent Overbeek

Island a significant while Honolulu. Lana'i about to mean, Ohana total portion within be between an a from the it round islands able I trips to all ATR revenue amounted markets perspective of we and had of was overall And portfolio. Moloka'i a the to what day network was not X Neighbor part to major the important connect chain, it call our

revenue So forward. a modeling impact that going material I wouldn't from to expect a perspective,

Operator

next question the comes DeNardi Stifel. with from Joseph of line Our

Joseph DeNardi

capacity back can where that to is just ex to see Shannon, falling? of you get think you talk XXXX CASM you kind whenever when you capacity, levels

Shannon Okinaka

costs doing ex XXX in had to figuring our -- our XXXX. What in quite Thanks, as same modeling similar out we we've moving be CASM get modeled once exact it, to capacity finished mode, close, we back funds. But different a We've to haven't Joe. very operating transition we or XXXX and is directions. normal expect

But our capacity that levels expect our be XXXX is the to we hasn't factored at So same. been when CASM in. part

Joseph DeNardi

living side do for route hurting West routes, all Coast helping for or domestic mean earnings and question maybe vast that not a North kind either that the the Great. then you And the in international and When America is credit cardholders the the is to I a imagine impactful and Peter variable profitability of your of you I Hawaiian or on how of allocate residents profitability on profitable of Brent. how would side. from Okay. much international terms majority are that or all?

Peter Ingram

Sure.

our and me portfolio, to then in Let may portfolio some credit or comments card. But our U.S. got the Mannis and on card also add primary room, that, want issued right, Avi is he credit start you're we've a Brent.

Western main the the the Hawaii U.S. geographies So those for in are residents and programs. of folks

co-brand we -- using sort on card, as credit relationship. we are the which -- do allocation of to smaller travel than to have for people our actually issued to Japan flights card that performance awards It have account credit those that domestic our more when we have endeavor of in card. there assess performance have credit a extent on that make the is mileage in we flights international members flights. our than than The we the those either a much, We we the routes is that issue we is just revenue -- much or on speaking flyer frequent and revenue -- do interisland broadly And a our flights, U.S. that. profitability mainland we on more

revenue getting attributed a is routes, with those it as -- So cash. different it's still of of to in just think but you can essence, form payment than

Joseph DeNardi

that? that And suggest the once than it 'XX. end co-brand. spend would where the of was better Okay. maybe another on I the still to T&E comes actually typically know, do I that it spend with meaningfully said quarter, But is by spend what don't on you the the How I And T&E changes just that one portfolio? on does the T&E in lower for think Peter, card on maybe to in back back? and speak guess is to or big can was just customer you patterns. was the card has spending

Peter Ingram

day-to-day to am. definitely normalized. at you're last -- on I the think at closer We current, a have fairly Avi, I But Yes. different probably than it year. when the on And largely basis things was dramatically times spend that we looked

Avi Mannis

spend looking is seeing Yes, and good. acquisition start overall category I normalize we are is to think mix good very the looking very

moving see behavior a over we're lot other last So moving where our we the the certainly, saw seeing in customer it kind of it mix we but shift a back as was. year, of

Operator

from of comes the Chris question next Our line Susquehanna Group. with Stathoulopoulos International

ChrisStathoulopoulos

more your -- you initiatives product the So various us you to in that could Peter, alluded some on remarks? color and opening give revenue these

Peter Ingram

some things doing You're we're the of talking on about the customer side.

changes to in got going Hawaii. in experience, which new gates of gates come free that think be our Los our opportunities months to to for facilities is eliminate experience. guest to We've we it be next to and on benefits where our of in and some number are announced provide miles the relocating expiration our the of program. Angeles are months expect we loyalty We're couple work new a our travelers. continuing several that up to made next that will the going improve sure tickets. terms on particularly change of we I front product to the haven't We're portfolio to some make some going around We've in we of of some on the continuing innovation, -- in in we're with

make that. a which wanting everything center right not disclosed putting I But we that this and broadly perspective we Hawaii service forum be think that products publicly the great and of hospitality we a traveler. do of do so the we've that, service And right and to got sure to at wouldn't are variety all things, do the from win is key and the airline guests because a differentiator, under of is the to we the and of it of yet, the there's think have focus

Chris Stathoulopoulos

half expected. And Could help you Shannon, would Okay. you mentioned categories headcount come second you then, then And from? as in overstaffed pick that we up to demand doesn't which or frame temporarily X or run ASM? that productivity might us base XXXX, X labor ASMs a labor also, you the be ASM per think and perhaps XXXX full relative per about to on the how could recovery or specifically FTEs should FTE full at relative if network X%

Shannon Okinaka

it's primarily long a pilots. doesn't potential training if near-term labor Great. Thanks, of Chris. horizon. got back, international the They've from come surplus Yes,

need to think So advance in of we we them. months kind out when that of we need plan

if voluntary So leaves through we in throughout the that. mark late pandemic managing hit pilots. really all don't fourth been we've short-term We've could the been pretty groups have some of labor period, our that surplus with like some that time quarter we and And things of successful.

on So to what obviously, From operation labor productivity. closer with full continue back, the we're that long-term with back we're can a a we We we where contract are surplus. unions knowing But heavily just international go wage. our when comes with of rates will in that productivity in technology-wise, we have now. mitigate and implemented productivity think unions And a like wise rates efficiency and labor try when get complement. concerned. be -- head Obviously, want we we initiatives and to crew on exact we've perspective, an of versus -- improvement focused frankly, people what I on not and process But my capacity we're very our as and lot comparison are negotiations. fully also some don't very labor to fair working pay also things up.

pressures way inflationary we So -- and against the or the mitigate fight that's rates. the of wage

going don't are forward I we're think But going I'm So where productivity a we definitely number really more comparison sorry, from you. than have a now. I productive to be standpoint, for

Peter Ingram

to pilots we I'm are And then going about right a would now. to talk pilots. bit besides clarify Chris, just say where little and -- everyone I

characterize we our And it to in definitely on well. able besides operations, fine-tune as overstaffed For not in we're where everyone pilots, are I ground would right fairly now. hiring We're fact, we the right really we a in now on right and are to is fleet amount seat mode. where the get training With pilots people positioned -- recovery. for are disproportionate -- spending

a the little of So opportunities there it's the in doesn't probably as a when revenue the of very as as place which wrong on it. revenue it's characterize to overstaffed in but sure be training, right still prepared more making part to is flying, generate disproportionate are XXXX. we're way important -- It's emphasis much bit

Operator

comes from line Global the with Dan Seaport question of next McKenzie Securities. Our

DanMcKenzie

A here. couple questions of

or in there spool with If down And prepandemic, you just with initiatives? remind far how premium the more going got those up guess And that upside far is far I'm can with is in how basic the how down where along you road I got you XXXX, road we us revenue? economy?

Peter Ingram

America rolled the in really So of in out domestic yes, Dan, had America we basic so economy XXXX. our part markets or North North or in latter

we'll encouraged of product, work compete and working mean the that we've what out to And our continue that where So that around as and change product. in to forward? through got there. in some understand, way there, we what XQ, start seen and work were I'm implemented it. to in kind we how of can in spooling was too And It's how on changing we and -- that's continue of a that points going we've to continue that? tweak an we're do given how to the there important the is tool does of and place fully understand seeing that particularly we're we customer we kind and that market, now behavior optimize price So continue with pandemic that's the optimize

us, invested much continue before at time of mentioned just envelope, factors, to space kind premium that's don't where really extra well great of well industry cabin high do talked our first-class fair the and above we push paid previous you well, on have how competitors. pandemic business the given existing we and frankly, side, in improved frankly, We've certainly the on And a yields do there. seen a lot We we layouts. because how more strength. Days. the won for the of and we've load to about differentiator of improving just the Investor the above our that had performance continue amount really As see And team even effort a a part on that's a

the some encouraged of over we're second the benefits the months really year. and I'm team's half of so foundation XX that of reap this last to laid starting And the with the in

Dan McKenzie

Okay.

across I far of guess innings story inning? -- premium to get just I the I upside using where a that seeing along competitive be you it the whether sense network. I'm just is did inning the I'm in So got may these elsewhere is of some these guess story, is? are or the potentially trying going thought here, don't for of premium of what is second both fully with partially sort baseball how understand the fifth quite on you backfilled you there that And questions challenges initiatives can backfill

Peter Ingram

like a do able Extra improve be we that. we Comfort And and to optimization as certainly well. we're can -- So premium I to we're got is would to more that there's probably to really game. done say the about think we middle about of things earlier think of but some improve basic as the think think that in as product, on we've that to a go And relative side, think probably the innings. the closer products part there, basis, I I on I long ways performance We've

innings overall, say, would closer to probably I we're So in premium, of terms middle the there.

Operator

question-and-answer session. hand like for remarks. concludes it That back to Ingram our closing to I'd Peter

Peter Ingram

joining today. our Hello you progress on updating We again, Aloha. us and everyone interest again look in few appreciate forward your to to for a months.

Operator

Ladies you and today's teleconference. for participation. gentlemen, this Thank conclude does your

this You have a time, at may disconnect and lines your day. wonderful

Hawaiian (HA) 28 Jul 212021 Q2 Earnings call transcript