Lower costs pare
Hawaiian Air loss

It cut first-quarter red ink
despite a decline in
tourist arrivals

By Russ Lynch
Star-Bulletin

Thanks to lower fuel costs and not having to pay landing fees in Hawaii, Hawaiian Airlines Inc. cut its first-quarter losses by more than half.

The airline said today that it had a first-quarter loss of $1.1 million this year compared with a loss of $2.4 million in the first quarter of 1997. Revenues were relatively flat at $100.2 million for the latest quarter compared with $99.8 million in the 1997 quarter.

The airline said its loss from operations for the three months through March 31 was $1.9 million, a 58 percent improvement from an operating loss of $4.5 million in the year-earlier period.

Lower world oil prices allowed Hawaiian to cut its first-quarter fuel bill by $3 million and the airline also saved $1.5 million in landing fees compared with the 1997 quarter. In September, Gov. Ben Cayetano's announced a two-year waiver of airline landing fees because of a surplus in the state airports fund.

Paul J. Casey, Hawaiian Airlines' president and chief executive officer, said the airline improved its cost structure and was able to reduce losses despite a 6.3 percent decline in first-quarter tourist arrivals from Asia and a 5.4 percent decline in travel to Hawaii from the state's biggest tourist market, California.

"Despite these challenges, our yield continues in the right direction and advance bookings for the second and third quarters are building nicely," Casey said.

In the latest three months, Hawaiian had $82.2 million in revenues from passenger operations, up 1.5 percent from $81 million in the year-earlier quarter. First-quarter charter revenues of $9.4 million were down 12.1 percent from $10.7 million. Cargo revenues of $5.2 million were up 2 percent from $5.1 million.

On the expenses side, wages and benefits were unchanged at $29.5 million for the quarter. However, the airline's expenditure on aircraft fuel and fuel taxes was $18.8 million in the latest quarter, down 13.8 percent from $21.8 million in the year-earlier quarter.

Hawaiian Airlines carried 1.18 million passengers in the 1998 quarter in its scheduled (noncharter) business, down 4.1 percent from 1.23 million in the year-earlier period, but it had more seats available. The result was a decline in the airline's systemwide load factor to 66 percent, from 67.8 percent.

Hawaiian Airlines flies to the mainland and the South Pacific with DC-10 aircraft in addition to its DC-9 interisland services.