HA - Earnings call transcript Q4 2021

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Operator

Greetings. Welcome to the Hawaiian Holdings, Inc. 2021 Fourth Quarter and Full Year Financial Results Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Ashlee Kishimoto, Managing Director, Investor Relations. you. Thank

begin. may You

Ashlee Kishimoto

Hello full welcome conference year Alex. fourth call. Hawaiian quarter and XXXX everyone you, to and Holdings Thank financial results

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

priorities other this At the will and balance for end our Peter and have management should press about remarks, revenue prepared an afternoon provide we We now, o’clock an will will went attendance on of By open sheet. in discuss have Brent up several overview Eastern also performance the for call Time. team and Shannon that of to the members at release the of the our discuss update access everyone will our Q&A. XXXX, for out costs questions. the X

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

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

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

Peter Ingram

business. Hello with We, mitigated rapid of challenges, Ashley. some without now but believe guests. business our from domestic year, of to beginning not we the cases. joining expected The operational to restore and recovery months end side of at Mahalo, level international December, of remain last the and the quarter we better integrity I strong positive as the and lag. operational footing are modest tail second everyone, businesses, you of the today. of COVID particularly business of our other we of us of disruption like of demand demand Since solid our ended on largely a half the impact substantial adjustments signs team the to We’ve that spoke confident on our faced We for in for disruption worst pass continues these in and to ahead. recovery, international Despite latest recovery the some wave related the made spread this we’ll outstanding of the our results near-term we domestic as XXXX Omicron see XXXX. in thank efforts

toolbox that the pandemic. of to before, restoration enable business availability were the we’ve by scale conditions at part our early As supported vaccinations aligning not the of in said are a full therapeutics of and

delayed variant has are continues rapidly likely transmissible policies what to relief travel to international, borders. regard regarding For limit by response a this of Omicron in governmental couple The across months. the us

readiness. is control in what We but that, our of aren’t and control can we preparation

during of summer and comprehensive in operation international year an a preparing the the for beyond. more increase are second quarter We the and in

solid service, underlying the realize our sustained leisure exceptional brand, and me. performance, travel, Excuse operational positions As conditions to for extremely focus us success. us allow we well unique demand, on a that know

our an work in to outstanding to one the employees for have throughout continues to efforts of contributions relentlessly team company their each help long-term. made as recovery. ever-changing of business remained teammates help we environment Our substantial our the the The recover for tremendous towards strengthen pandemic. in constant XXXX and our Mahalo my to strides

this and several the teams flights been to help handful schedule are unique to address last other past beginning training talk seen in North equipment, To XXXX, we the a more Also, us year behind members I more the the month our increased cancellation compounded I experienced airlines over have our one. our scheduled XXXX. America XXXX of flexibility last of operating availability stabilize. more in downtime part to the at absences. affected days feel of place, January, the we our were by and the absences of about put fleet period operational several levels for about to spread the bit what flights restore and that Before some island like this have to some performance guests subsequently and as XXXX operations made them. to of I’d the worst accustomed led us. to. XXX days Like through these led talk in disruption unscheduled Omicron changes of disruptions operations we disruptions we the of waning of adjustments Since in a of manage to our beginning which this begin of to us provide the the we the and confident these early neighbor have factors our These have to short-term end with crew done

travel country, COVID much with Back will our is enhance airport, These a The But sick of December, December, changes represents line remind us subject impact – couple our Since have declining take benefits. the have that maintenance underlying I’m of advantage our changed, as demand Aided with line and high didn’t back the spoke continues the state’s Hawaii counts January with the mid-February, variant policies of into the updates. are online. for you which high we have protocols. in the ready which last and Despite calls In delayed vaccination more from the us restrictive. with increases since have that a in with expectation provide have policy pay provide to identification remained Omicron, ramp cases, have rate, second we to may operations the variant. I’d clear Omicron road of desire highly we from pleased Consistent Hawaii we of end some we in and the governmental increases up to quarter. will for the for our employees. remain would pushed and international sight liberalization agreements, our and record in new with rate cross-border pent-up of and react. the ratification it in of the not reached for profound, be by This we case months cargo IAM, saw was been training hospitalization because leisure rates variant, state experience the be of seen are of have not to contagious Omicron smooth. that how the rate limited travel Our spiked to provide would policy contrasts changes with our safety ahead be response for when in March and open equipment remains with initiatives continue travel materializes. like agreements Delta tentative XXXX and hospitalization to the Japan our tourism manageable. pay

will the competitively. new And terms retain us these rewarded that. and increasingly will when yield continue market, with proud deserve ratified, technology Our pandemic. the unions pleased the The I’m this provisions employees. and updated labor is beyond we our pay to manage contracts our the in representing collaborate the and higher business our in for completed beginning contract, in of an our representing our long-term, commitment the be reached hires unique help XXXX with and soon employees flight I’m process to we will have also commitment compete This to to long-term provide labor rates that benefits that XXXX. in agreement to since employees. investing representing benefit agreements, costs our in of with and coupled reflects of workforce productivity the XX% will the attendants, to industry with Along for existing AFA, in enhancements, our competitive shared

meet for our also We’re technology expected continues productivity use as revenue remain in to and to on the the cost guests. advancing in our experience and goals best tools We these of mature. track technology invest deliver for benefits the commitment to XXXX, our

With the capacity of for domestic the the Omicron significant not enable and that simplification last spring the the will service to that is and investments we for since outlook processes. travel Hawaii coming over other remains, have competitive Much to remains which seen stream environment of markets, in new in develop change Our streamlining benefits the commercial the business as catalyst in slow. service system capacity be of spoke a expected a travel of December. These passenger to will of guest years. shifting we shifted a XXXX, and our will continue recovery international launch

return. that domestically As may the marginal recovery was evolve, some environment capacity reevaluated. added be continues, and we competitive pre-pandemic Internationally, will the capacity expect not that will of marginal

opportunities on competitive committed we that the are We ensuring are environment as positioned to capitalize to involves.

little our As and aircraft two now some will XXXX delay. and back XXXX the not. less desire the of precisely The even of be waves than for our expectation Omicron XXXX. capacity Domestically, industry. if first previous been recovery isn’t expect about on International of related we activities surround changes timing December, into been COVID of delayed, underlying than we policy trajectory signs XXXs linear with to to capacity cannot continue has bit travel has the year readiness the the full no on to has from an our a that and had with receive recover plan right, despite continues optimistic removed of the remain delivered progress these our impact on earlier to pandemic, recovery have scheduled is our we Yes, international has expected to leisure the progress we the I already in the but from the now pace. The of path our are and it forecast of for some that costs uncertainty the evident. are by half and in travel shifted XXXX. them mentioned make were trajectory interrupted to the side the but business

detail. more recovery call results the over let turn will positioned to for success. the of to to commercial outlook me and ready and in our that, are well continuing advantage Brent take XXXX We the be discuss With

Brent Overbeek

Thank aloha, guests and closed you, take and out to our teammates taking all XXXX. we of care thank brief as like to their everyone. moment and of and Peter, for each I’d efforts a our dedication other,

revenue continues capacity in fourth Passenger with international with quarter leisure our North XX.X% expected, up capacity XXXX. an cancellations compared from domestic operating was XXXX, strong American revenue by XXX% we our our with environment and stronger from down and a we performance of as challenging our as had revenue sales period. of we as and closing resilient down our this reguided but driven of XXXX, account from from retail holiday didn’t December to be was Mastercard, Our we line XX% see Miles XXXX, expected as quarter We travel our compared lower period a the demand to operated were related record by volumes yields Hawaii. a performance new Hawaiian and strong much bright acquisitions. what to total from busy revenue to spot, travel XX.X% just impact quarter domestic operated XX.X% from in co-branded XX% when revenue to XXXX, throughout was strong Hawaii same to Despite cargo in our competitive network, a the capacity of in in elevated of markets. Nonpassenger Omicron, capacity evidenced

continue and we to XX% to from our down we and quarter, traffic short our in fourth this from our headwind will stabilize. starting will recover results as Looking be anticipate We business, be quarter, ahead Omicron impacting and are overall cancellations anticipate our revenue the to a with slight first the our bookings headwind to the that see deceleration variant term, we XXXX, XX% schedule.

governmental policies network us, Our international network continues here our as to domestic suspended. limit lag and of to remains continue most

for Let net me bookings we’re each of take of the North In business. lower with the through you segment Omicron variant our quarter. America, first impact seeing

from And are be as what for closely we first seeing to ahead. the see continue the momentum the upward we today, will months of bookings. impact We monitor bookings in the quarter, worst in

in spoke focus North strength American Neighbor about expect year, Islands demonstrates XX% higher have than We how aircraft. our schedule XXXX XXX% network to data well for rest is in our XXXX. and Neighbor and This capacity. on network, premium from to materially our North In last the the which were of our outperforming the our planning in fly we the the leisure we We latest of this the our on of quarter, developed positioned remain we of optimally expanded to Hawaii traveler very our and revenue operate XXXX configured XX% to further anticipate the December, they’re Islands, we America due since the DOT, based markets.

stay that fly booking in first excess of we’re now at remain versus the Peter XX% local improvement in quarter. to Neighbor seat the we’re home, share well customers and our for seeing bookings. premium load and our curve to of As in. some changes of resulting surge, see we mentioned, And share with close we But about positioned XXXX continue a in temporary significant through schedule schedule of to choose Islands are is and The work maintain well signs starting Omicron expecting the lower the traffic competitors. our factor to

of Japan. certainty pace speak recovery the With the on in Omicron, news evolving can’t we international with markets, key particularly of

originally resumption that’s moments expectations of the Japan yet to up know the not discussing ramp versus today, we on quarter, our in published for a Let reflected we schedules schedule. bit later Based Japan. planned published our had in me we spend planned, service expect to what service few our a to but second currently the than

published processes further delay And around accordingly reopen. upcoming gets working authorities. to as summer we’ll our schedules and of a restoration about could route We through remain international season our Japan respective for are fully when governmental resolved. the network we as There that our slots update be uncertain will

control policy can’t as our precise ready Japan we relaunch soon be the open; will international conditions when we While allow. network however, date will fully to as

that quarter, our about of guest XXXX materializes. expecting for now full remain in vacation is which positioned in resumed higher quarter, fly of are a We brand Sydney and well to than We slightly schedule to to demand XX% capitalize when mid-December. with fourth reflecting first experience a international the quarter of the on Hawaii flights the quality it

recovery our XXXX to quarter capacity bit, Moving that overall to is capacity outlook. With from Omicron basis, a the our XX% back quarter the first fourth sequential of of On a the from will down capacity shifting we XX% quarter XXXX essentially XXXX. for our be flat. anticipate to first

capacity pushback and service Japan up first full XXXX, second X% changes the the XXXX. to to the of driven by quarter, expect delay quarter, to the XXXs we For in year, the to the be schedule primarily now the X% resumption the of down in from of

revenue a travel enhancements strategy, distribution system, to a products and products. new to For travel we launch remain existing on management new XXXX, track new

million benefits approximately We initiatives these as expect steady-state ramp continue year, to to incremental this commercial towards of drive their they values. $XX

prior had business variants. be ready well that we’re trajectory road once has international of on Domestically, recovery some are policy our encouraged positioned our Internationally Omicron to impact as than temporary We’re and an bookings on we of recovery travel upward see less we’ll allows. we despite the for setbacks.

exceptional that, the success. have strong to With Shannon. and We I’ll formula turn product, great call a winning team a brand, over for

Shannon Okinaka

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

adjusted of $XX.X share. For we $X.XX an quarter, or loss million per the net fourth recorded

$XX.XX $XXX the year reflects rebuilding or of million continued full the share demand per the while pandemic. our loss of recovery, business, our challenges in the ongoing adjusted robust to the Hawaii. travel spots for of bright navigating volatility domestic There been While specifically net have

strong in where $X domestic closed ended investments full with holidays, undrawn and we cash fact, service. we resumption XXXX the and In the the profit our without of billion liquidity, saw international for of quarter revolver. December, month short-term busy billion $X.X the in with seasonally including demand even We for a

payment. about In $XXX end XX Our of savings future lease expense week forward. And $XXX for $XXX last debt million million adjusted important tranche million highest principle pre-pandemic levels debt year and $XXX debt And the million, going opportunistically prepaid December lower for million the B repaid of of XXXX. as and $XX the we scheduled bearing we net our made full fourth final our debt. of the for quarter, interest obligations, of of scheduled than we payment $XX debt XXXX partial completed was the EETC we at EETC providing notes pay-down million interest of

sustained in our enough navigate we of the continue work business. we to have the crisis strengthening remainder we ensure back and cash to As way will cash generation, will invest our to

profile to and use debt current look returns. near-term produce And to we’ll economic future our how XXXs for other While investments. our our delever prudent more be to capital fund provide about we we’ll doesn’t cash opportunities significant positive excess opportunities

collective be full-year X.X% XXXX. deliveries assumption results as impact agreements bargaining this and the change XXX in agreements year. costs, of timing will reduction fourth to some December, about ramp-up will excluding variety special favorability X.X% business we pushing Our In our expectation cost fuel a non-fuel our came of items quarter. other the the into our an due unit of delay the to in compared in for the spoke our unit amendable excluding tentative costs excludes increase our that better we our first IAM about across to expenses a quarter This XXXX those the expected ASMs expectations international little of with categories of the from of and costs. our that with than The now and

IAM to expect add increased technology by ratified. over expect productivity agreements and to to the investments new the benefits. three-year increase year-over these to operational our through agility be another through when offset years; work contracts range partially other the recent We point-and-a-half we few We point wage and increases next

of through the some unit you compared walk specific me our XXXX. Let to to changes as XXXX expectations cost

first With now from incremental XXXs the the of dates to the of preparing we headwind two XXXX, dates that of two these and first of end entry to into of of further the delivery half-point of shift may some we see beyond for XXXX not related costs firm shift XXX half the the the first are first expect service. expense XXXs if a half the Delivery XXXX. pushed XXXX assumption out

pushed about discussed we also prior headwind and million fees, the expect we benefits, now and beyond depreciation unit headwinds $X.X and of of half-a-point also of labor of May, in relatively We April. resumption cost half-point our due through in expect recovery some a in tailwinds will The international expectation. delay our stay month. of an headwind landing rentals ASMs and the up our If per wages year. back which as This near-term in an we additional our international and for the magnitude is is we expect which to the staffing of impacts headwind cost ASMs as fixed international from reduction service, rent the aircraft in January four-points we from reduce will the additional second service on resumption result target net in half and from the remain network December, of the amortization, excess

capacity quarter on mentioned, first quarter, to first quarter sequential the purchases I’ll costs same explain first fourth some The of as in quarter decrease to events, cost primarily sequential expected from the more magnitude. were increases items capacity expect from increase first the costs we year headwinds XXXX our unit but previously increase fourth the and in of the be that number XX% increase about are related the special quarter full up equipment excluding with compared is by to XXXX of quarter XXXX, to pushed project line fuel heavy an incurrence the in a For XX% is the and in OpEx. XXXX of the maintenance The of quarter-over-quarter. flat of from to the driven to

$X.XX; fuel XX% our for X.X% first price XXXX and respectively. gallon per XX% quarter first to expect year to forecasting our to We we for to down quarter year and consumption $X.XX. the the for And and fuel the be compared full full are be to to as X.X% be

revised capital XXXX reflect for also have aircraft to with remaining third for to XXXX We our spend. our capital million expenditures forecast delay of We and the non-aircraft in XXXs. total the million two-thirds for $XXX two to our expenditure $XXX delivery expect about now

to On or improve our continue flexibility us the non-aircraft also in the invest and operational commercial facilities we our guests our for employees. We’ll make investments provide to side continue technology in that experience efficiencies. with both to

Our expected first million $XXX million. quarter of outlook an to EBITDA $XX negative results in

result back we’re business to Omicron with of disappointed the we up of the will now for our of And negative that open a months, we couple the questions. in the travel of have model and our over demand can coupled that, pushed for While team with headwinds Hawaii timeline strengths long-term. call success the recovery our believe resilience

Operator

with be Instructions] Bank. your Thank Deutsche proceed [Operator this we Mike Our question. time Linenberg Please session. question-and-answer comes you. line conducting the from question At first a with of will

Mike Linenberg

point. to the just headwind, to Hey. delays in said and want four-point costs because I of guess X, previously I X.X it that? want context have and a Good now around everyone. Shannon, some Hey was the get back I you go you afternoon, international, on pushback aircraft the what

Shannon Okinaka

might Mike. a have numbers. lot That We of gave Sorry, been confusing.

So and up the up previous to was X% the for be now to to to guidance is X%; year the X.X% X.X%. guidance be full

from in half-a-point four-points add we the another and have categories result is December, XXX then other four-point all But some other And of headwind. changes half-a-point of but in takes And the the things. what then the international. ASMs, wages and so reduced from and from to from there and other the you schedule give basically those pushback have benefits. those now that the delay, the primarily the for those talked things And are had do about of it’s we specifics

Mike Linenberg

Okay.

previous like but right. when look just unit And perspective, I not by capacity guidance unit cost cost me a I pulling down you’re I that less. from to your it’s and your pickup realized relative capacity, hear So, about at now three-points, out see is a totally here bit linear though, your

And that I of a with linear of of and sort I that so actually it’s type pullback realizing capacity that wasn’t increase bad looked not at would’ve that as anticipated an thought, that relationship.

And so I – it? the that’s why just I and wasn’t – I’m – to at think it maybe looking I the that way didn’t isn’t maybe right follow about way

Shannon Okinaka

No.

exactly I it. to think that’s the think right way about

We and as our are adjustments to we aggressive [indiscernible] on Yes. our business make changes. things cost

about thinking you’re think Mike. right, I So it,

Mike Linenberg

Okay. the encouraged. were ramping you That’s where the up It Jumping able month cost did you talking it Brisbane if some to I route either that and other looked And Australia reading just much because areas it’s up too you. going get be weren’t A delayed you Australia it? get international see picked most Thank sort if to is from ago, like. of pull on or into the guys Am didn’t seemed XXXs I question; wasn’t would airplanes looked marginal the it could maybe on Brisbane, about somewhat you the well was some to to maybe you just this and were of your to capture get cut international. my had saw you Brent number. this schedule. like ramping it’s as up And the for that of benefit like the year, know I what out. you schedule second you in entire

Brent Overbeek

particularly kind we through Mike, kind – We pace Brisbane, looked in the we at had back. our we where enjoy going to the to international exist pandemic, the marketplace, the thought were don’t the And which we short-term coming conditions we that looking ready of while way serve. think move sense in we We we at the were conditions on. working flying certainly that, going that as the the to been international point was to make marketplaces We have were of were for us. at are at like

Those read I anything things in move so we changes. pondering and as that wouldn’t way it that. short-term sense into our to And of were made in we forward moved terms were XXXX, that with

Peter Ingram

just And any that, level started was a with before point to really something Brisbane how we of resume we’ve going is perhaps to It a up the finer service put decision in Mike, we disappointment reflection of not had evaluating Sydney. – that on Australia. back there’s been

Mike Linenberg

That’s Thank helpful. Thanks. guys. really you. Thanks,

Operator

Thank you.

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

Helane Becker

Thank $XXX to first you very much time. positive $XX clarifying negative you Thank minus you question When much minus for very is that everybody. operator. million million, said the $XXX said million? Hi, just you minus for or I $XXX have for Shannon. a minus EBITDA quarter, to million million $XX

Shannon Okinaka

you. Thank Helane. million, $XX minus to million $XXX Minus

Helane Becker

Thank the other using consider Council – tomorrow for Airbnb. is the bill City question Peter. Honolulu then holding is is XX a morning, guess for There’s I Bill that CDX, which people to probably you. my And a limits their houses meeting

you about about to at places all? business or your is from think think how should for you as of traffic there anywhere if hotel business to stay is resumption so, that And about impactful as as a a or people Hawaii of impacting your there we are rooms shortage that thinking to of shortage or

Peter Ingram

many that transient it to is it private operate subject we have Oahu many would lot having It’s something increased non-hotel the been with or in to as a to Hawaiian our pandemic little Bill some referred of to what’s residents just the residential people visitors on of party. a and use rentals has the certainly. bit of counties of here have certified from vacation throughout hotel where legislation experience is something series accommodations. with has to in do demand be that the seen Airbnb space piece units is legally rental prohibit increasing think, the has the about over community created And different really restrictions years like relative that recent as can of in other a a it hotel. XX I enjoy much particularly these cases think see latest debate stays course that of their neighborhoods. A Yes, like And state. to own traveling the more of for Islands of throughout there and I vacation we in and VRBO, accommodations, them as In candidly think

that for We it’s I options the vacation advantage we of available of have go actively we that the are that process. various discussion as at that place suit and balance we’ll do a on rentals. through important to hope state And up are this looking think visitors, this that appropriate legislative maintain strike governments it move and is county think that seeing for the end restrictions we in to forward. monitor take the as some them right

Helane Becker

And That’s everybody helpful. your time. Okay. Peter. very for thanks Thanks,

Operator

you. Thank

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

Conor Cunningham

mark everyone. is. and first to of quarter. Hey high-water be out to I’m Thank North Brent, what the trying going schedule America your parse your you. in flying mentioned Hey you that’s just that XXX%

there a being flying where just of added? Just international? potentially have percentage be markets? what thing Is then And just that frequency help is in is you. great. been domestic that stronger any that should that flights So, Thank would

Brent Overbeek

a really it’s in how XXXX. XXXX and we grew Conor, Yes. function of

XQ, in was a XXXX. of of lot of So, kind XQ our XQ, growth

year, in XQ a comparing back bit particular, looks that odd. as So, to little we base keep

For the second of quarter until Boston didn’t start XXXX. example, like

growth this basis. like it relative So, looks on

that compare change break, material of there the a back We’ve of base the year. not just is it lot select added than really being So, lot but the different XXXX the few the trips spring a XQ bit during a to of network rest and we a is in of there.

Conor Cunningham

Okay.

Brent Overbeek

– And think I think if you another of pretty thing kind is flat. about thing another sequentially we’re quarter-over-quarter,

So, from to XXXX XQ of XXXX. of XQ

that XXXX So, in it, base anything of it’s about if movement quarter change material of first the really you doing the really think we’re more things than to XXXX. in

Conor Cunningham

Right.

adding like from should a not just is somewhere you this that base. So, been it’s have flights else, were assets

Brent Overbeek

Yes.

Conor Cunningham

of permanence and of rise leisure that other And cool. have potential of Okay, some customer. then new about the talked airlines premium the the

of just like just and if if general fall thing that because think this it’s premium customer? to and sticky just you they could your think market. you that is I interesting the am I curious person, of right through that I your your how kind an into a it performed view would speak products guys, would pandemic for

you if on that? curious just So Thank have any thoughts you.

Brent Overbeek

seen Yes, premium here I certainly kind doing our are a fantastic. think, pandemic quarter even And products have into it it’s Conor. we and throughout the observation, fourth of the great

the the we I fourth in cabin think despite quarter. had PRASM-positive front we the some domestically, in were of headwinds

some in there and pricing demand seen strong. Extra strong We’ve power remain performance continue really Comfort to really, So, well. as

in that into of so well. product. that price have done And some has seeing more sell-up improvements been to able there a power terms the pricing little We’ve in average

leisure and premium think, well I Hawaii. we quite is a yes, So well, be that doing in positioned to winner are really from

Peter Ingram

It’s just and main with actually coincident cabin occurred cabin. I’d premium do Conor. the that, the the performance phenomenon our in XXXX in those XXXX, look you not if outperforming typically, that pandemic. is or back to think because this were of trends and at I add go that a

And some the I marketing commercial in terms products those the of generally it some an Brent’s is, of was team of team our better, that of efforts but because think, more demand. great evolution of of and

gone pandemic. so, as continue we’ve the we’re And that through just seeing

Conor Cunningham

Thank Great, you. appreciate.

Operator

Thank you.

from comes your question line with Catherine O’Brien of the with Sachs. next proceed Goldman question. Please Our

Catherine O’Brien

point much international. quarter. The Can head just is worsening to into if decel also in season make the it to have closer guidance versus first of to to other we pointing Or it as first we’re capacity versus just obviously, Hey, Is switching quarter on good fourth trends February Is pressure and changing? XXXX compared on had what’s lingering as time. January afternoon, the performance that through you to XXXX, a XXXX around to versus the make me. And so on pricing quarter versus you RASM your airlines environment the assumptions walk for put everyone. that? XXXX XXXX seeing earnings you follow RASM impact? RASM. us the Thanks One, some this in Omicron changes driving in you’ve

how on pricing some about Just the would Thanks. the puts demand. you’re takes and love and thinking to of hear

Brent Overbeek

Yes.

pronounced It’s particularly the January in think of XQ. decent I So February. hits Omicron of chunk timing and a

we’ve that bit the of hole in We’re a the in trends, encouraged a in got terms booking we’ve to got continuing of out terms of kind bottom but we’ve move to of seen of dig spring break.

in the softened passenger the Internationally, fourth still our progress, XQ So being most had some Still to terms think around a in the seen is we’re think, of a to expectations strengthen. small continue bit. positive revenue. material I on as our We material in we obviously at a our demand slowdown. international of has in waned XQ. able And cargo remarks, We’ve quarter, portion timing it, real steady said into have but quite there’s a what in revenue of seen network quite impact. pretty we XQ, impact our of going that network. generate terms end while prepared the And of

a in And the so fourth had we’ve in while that in side, enjoyed I quarter, of pronounced. generating particularly And place. we November some periods the a results profit holiday passenger Korea, still has and as geographies, and finally, and in that a Japan that in in around mentioned then good prepared her think normally, Shannon has the the as certainly not will holidays good strong But couple slowed been continue on terms of more bit December. to revenue support got of as little Thanksgiving the down that maybe and remarks, schedule in we and

seen January on So February there. of and in from move we’ve kind things lot that of without a that

Catherine O’Brien

crystal even days find days, international sense. but opportunities long-haul any peak Thanks. body know relatively Austin a Asia there you policies other year, make took less continue don’t geographies makes this those about stricter or Omicron, other capacity? then that over way want in That in wide one into just perhaps reallocate you ultra-peak a COVID Okay. of with just little surprising, Maybe to, all through a some could Or domestic are the other it, who to sense. other their Maybe the much you like to not how fewer knows ball, question. have I pandemic? and of XXXX. maybe markets you look parts would and that think Japan bit If medium-term

Brent Overbeek

Yes.

I locales. both international of it’s to other where a side, think say little on the regulations, at Japan we’re in in hard going terms to be and

available summer we’ve I other balance those that really how forward manage destinations, into really middle and we long-haul with and XXXX. planning going we the we will of got cycle to we’ve – as North resources be feel think got opportunities other but like in grow America to move the we’re the that important some into

Catherine O’Brien

all be impact? Okay, difference yes, to new question it. TA. points agreement, the could quick I it’s agreements, I a that so And tentative mid-Feb, the sneak X be much on super will right? X.X sure. only Shannon. sure impact ratified the that given to I IAM is make Thanks for want the XXXX impact? just Got annualized an for want it then to modeling one to one know XXXX The for And labor the or is I small then just that’s time.

Shannon Okinaka

IAM Yes, X.X X impact the impacts, but That TA. XXXX is Cathy. it refers is TA. the And the for year the Thanks, just you’re right. to of to versus the XXXX full Yes.

Catherine O’Brien

Okay, you. great. Thank

Operator

Thank you.

question comes line question. proceed of your from with with Hunter Please Our the Keay next Wolfe Research.

Noah Chase

or split set domestic? passenger competing do and that for international you don’t added roughly how at actually is actually breakdown, in case think to XX%, your marginal as a Peter, pull capacity structure come network Noah recovery? on out the for Hawaii This markets you we the Hunter. see in Thank the airlines time. you international actually your revenue pre-COVID shapes of And between evolving how XX% do the Chase

Peter Ingram

Yes.

at chime this he and in Brent I well, if I’ll wants. as point, let think

are recover. that We going we’re to Japan confident see

we We we into a a so that to of had add than domestic would move couple and expect, And latter going the as see year, this we’ve domestically. forward part between flights before. international of similar we’re balance did

our may percentage to And happen for long-haul radical serving it over think over coming the but of think, I a mirror are as network where Hawaii. it’s move a decade, evolved from points, the shift. likely couple visitors what going is I the Hawaii envisioning have we’re last So we longer-term, capacity to that largely most don’t is frankly,

And other, would over the mix visitor saw you one shift our similarly. that we think broader network time, likely so I shift if direction or

Noah Chase

and sneak could is in the apparent than expect impacting might it I are pilot in. And efforts more That’s more that Got pressures U.S.? super current of you just how Are seeing it. Thanks. one helpful. then And if negotiations? affect parts you other that hiring inflationary will Hawaii

Peter Ingram

nothing in inflationary And say of into terms split in it about non-labor. pressures, of that’s we’re what on labor particularly So unique there’s the versus sort I experiencing non-labor would Hawaii. I side, really

of But I part I of a investments seeing is our are a over several in think less where structure. perspective, airports in last from economy an is made the airline stimulus-driven more years. the more inflation and think, function airport up cost we broader the that, function costs that go on been have

all seen some So coming we’ve for that time. headwind that’s a

unique think particularly labor side, don’t the On it’s again, to Hawaii. I

experiencing cargo for functions and are some particularly like in and the our one tighter maintenance we job organizations. think airports, I markets, labor

that are increases to our in the welcome provided our new that are so deal And actually of IAM competitiveness terms attracting part. retaining in improve and

negotiations, your interesting opened for some that time. significant opened specific question have but becoming industry of significantly the fact recently our the fact either amendable the pilot been or up almost the is an to colored just up negotiating is of As about a percentage, throughout – period a the and all by contracts one it not year, picture pilot this for that that’s consider, contract

So likely to there uncertainty. think months. And our the over that we I coming is forward fair shape of move a is as bit negotiations

Noah Chase

time. for the Thanks it. Got

Operator

you. Thank

Global. with Seaport question with comes your Please next of McKenzie line proceed Our Dan question. from the

Dan McKenzie

thanks. Hi,

revenue of one the a other questions, outlook? is couple what is new of of system first and First but on, the first just on day? you just I included in that remind quarter benefit the you’ve the the revenue like is And turned what management when have one. us house timing Can cleaning,

Brent Overbeek

latter given be kind way booking and implementation. of the the we are in And just first middle We’ll working for on quarter. zero that we the through into of where the the turn of dollars with the will it prescribed curve our curve. Dan, the well So have part the and booking quarter,

more to And it’s so going term part for the latter year, that, of not latter in value of as out get be – we the the the the work than and XQ. medium to in summer

Dan McKenzie

see. I

demand. grind above summer on I bookings, not Brent, as you trending question pent-up inflections Okay. spring for just the of looking they I have seen you And and searches XXXX? recently? are and then I’m through searches, what what to kind And Omicron you’ve how travel XXXX? at just a while you, wondering comparing So guess, have are seen

Brent Overbeek

Yes.

that. would I characterize there’s pretty around summer, flat. context in think of been I it lot interest out a there the – as We’ve certainly of

down probably – And of that’s so we in spring we’re parity at terms searches, came close break, but up And we’re Omicron in function XXXX. really just are say little I’d bookings, on I a us. with where we’re when bit of of pretty probably kind think of timing the a

Dan McKenzie

could guys you mentioned just kind are aircraft. script, you seats you mix? remind number compete as had one squeeze this guess, looked optimally percent you going at business in. configured premium scheduled from more that going of with And Just that of Can in increasing I’m another as have question an question, us think I the premium well. to And just given then, and more seats where Extra And you Okay. kind success earlier Comfort? have of the the the on I with Southwest, of if back the and more on I revenue

Brent Overbeek

using that. periodically the on look Ashlee in of have cabin is me our board We follow estate on look terms something aircraft. real split. we we’re front It of at, I up exact that don’t can best at have percentages in we you with the how and

XXXX we of reconfigurations that. As investments Peter more look continue first-class expensive. back Real cabin our terms at for had in related in pretty earlier, are XXXX and estate We’ll mentioned making were products. to strides in premium

that sharp go hire on of existing keep be So fair certainly, there. But amount as we’ll there it’s the products. eye might continue be It a existing to hurdle for look aircraft. make to to forward, we might something a some changes

Peter Ingram

follow And underscore the but there that, are on I’d term. that trends to long I’d just

a laying think that’s with next of premium revenue-generating where And the airplane XXX cabin section. of entering in we evolution designed And certainly you our time perspective. out we’re so thinking our have opportunity from how actually larger the airplane with is about reflects our terms that on that’s if fleet, a our over

Dan McKenzie

Yes. Very good.

Thanks Okay. you for the time guys.

Operator

Thank you.

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

Chris Stathoulopoulos

question Hey, afternoon. just Dan’s want to good back go to here for Thanks taking my before. questions. I

So he’s give a more searching, or could actual he little bookings. but asked looking about at with if to it you bit color respect

slightly just said down. think that I they’re you

or you and so XXXX to pace bookings? are of of beyond, March absolute then relative And seasonality? bookings seeing terms the And in typical for what

Brent Overbeek

December Chris, a improvements. worked slow acceleration to seen So seen as that kind pace. abate, as and a that. get We’ve see of – And anticipate see we down early latter to of going material we we’re slower the things much we part January, to cases a through we and had to will way continue off that continuing forward around bottoms, our those

Peter Ingram

as context the had we – behind bookings. And just to us we through little were that Chris, put in came bit, a variant that in Delta

subsequently, in, Omicron acceleration. an was there saw slowdown that, we came from declining started cases As And again. a then

real relationship is to there cases. a So

last to very the the curve of average hard setting counts up the we’re because it’s another. the I think the of on going in the and starting that’s early days good better case go to forward. down trailing now, a side us for seven-day environment Omicron see even, one do period different reflect the last look two-week so And to from may from trends from month trends month extrapolate And

Chris Stathoulopoulos

Okay. And then for my follow-up.

reason. whatever the Japan in out revenue December, initiatives take outlined contribution? should any or think the you initiatives staging the we in of markets the the outlined other commercial of that terms in for that about to longer or you So or whether region impact How recover Thanks.

Brent Overbeek

marketplace. obviously think correlated those to we’re are the in how Yes. of I mean I doing all highly

of benefit goes in when our system up line with more the So demand is revenue supply. management

might all there don’t that, I that material. think to it’s so be And erosion a but slight

Chris Stathoulopoulos

Okay. Thank you.

Operator

and reached gentlemen, over closing we now turn the Thank remarks. the to you. will Ladies have Peter call I the for session. Ingram of end question-and-answer

Peter Ingram

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

Operator

for and you time. your wonderful at participation, Thank today’s this disconnect and day. lines have concludes This conference, may your a you

Hawaiian (HA) 26 Jan 222021 Q4 Earnings call transcript