Hawaiian Air earnings
fall 20 percent

More long-haul flights
boost fuel and other expenses

By Russ Lynch
Star-Bulletin

Hawaiian Airlines Inc. today reported a profit of $1.2 million, or 3 cents a share, for its second quarter, down 20 percent from a profit of $1.5 million, or 5 cents a share, in the second quarter of last year.

Part of the difference was due to a one-time gain of $340,000 in the 1996 quarter from an early payoff of the company's debt. There was no one-time gain in the latest quarter.

The company's earnings from operations dipped to just under $2 million in the latest quarter compared with $3.1 million in the year-earlier period.

Paul J. Casey, president and chief executive, said the airline made some aggressive moves to boost its long-haul business during a period of continued weakness in Hawaii tourism.

Competitive pricing attracted more passengers but more long-haul flights, including the use of an additional DC-10 widebody jet, pushed up fuel and maintenance expenses, he said.

In the quarter ended June 30, Hawaiian spent $19.3 million on fuel, a 7.8 percent increase from $17.9 million in the 1996 quarter.

Operating revenues of $103.9 million in the latest quarter were up 8.2 percent from $96 million in the year-earlier period.

Operating expenses, however, rose 9.7 percent to $101.9 million, from $92.9 million a year earlier.

If the one-time extra profit from 1996 is excluded from the calculations, Hawaiian's profit for the latest quarter was up slightly from last year.

However, Hawaiian had a loss of $2.4 million in the first quarter of this year, due mostly to slow business in January and February, so the first-half figures are below last year's.

For the six months ended June 30, Hawaiian had a net loss of $1.2 million, compared with a net profit of $956,000 in the first half of 1996.

In the latest quarter, passenger revenues on scheduled flights were $84.5 million, up 3.8 percent compared with $81.4 million a year earlier. Casey said the majority of the increase came from the mainland-Hawaii DC-10 flights, offset to some extent by lower interisland business.

Hawaiian picked up some additional business in charter flights between Honolulu and Las Vegas and Honolulu-Anchorage, reporting second-quarter revenues of $9.9 million from charters, up 41.4 percent from $7 million in the 1996 quarter.