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Hawaiian Airlines Posts $97m Net Loss And Confirms 787 Deferrals

Hawaiian Airlines has posted a net loss of $97 million for the third quarter of 2020. As the airline navigates the ongoing crisis, the carrier is looking ahead to the fourth quarter and beyond as Hawaii officially reopens for more mainland US tourists. Also, the carrier did officially confirm Boeing 787 deferrals to 2022 and beyond.

Hawaiian Airlines had a slightly better third quarter in terms of net results. Photo: Vincenzo Pace | JFKJets.com

Hawaiian Airlines posts $97m net loss

In the third quarter of 2020, Hawaiian Airlines faced barriers that some of its other network peers did not have to face. For all of the third quarter, the state of Hawaii mandated a 14-day self-quarantine for all incoming travel, and, for part of the third quarter, also mandated it for inter-island travel. This had an outsized impact on Hawaiian, which operated a reduced network across the state.

For the airline’s liquidity position, the carrier closed on $421 million in new financing during the quarter raised from the following:

  • $114 million from sale-and-leaseback transactions involving two Airbus A321neos
  • $262 million through the issuance of Enhanced Equipment Trust Certificates (EETC) secured using two Airbus A330s and six Airbus A321neos
  • Drew on $45 million of the $240 million in loans offered under the United States government

The airline still has access to additional financing. In relation to the last bullet points in loans from the US government, the airline has $577 million of undrawn funds available through March 2021.

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The carrier took steps to improve its liquidity position. Photo: Vincenzo Pace | JFKJets.com

The airline is capping capacity onboard its aircraft at 70% through December 15th, 2020.

Furloughs

On October 1st, Hawaiian Airlines bid adieu to over 2,000 employees across both permanent and extended voluntary leave programs with each of its workgroups. The airline reduced its workforce by approximately 2,400 employees, which is about a 32% reduction in the airline’s workforce—almost 2,100 of those left voluntarily, reducing the number of involuntary furloughs.

However, the involuntary furloughs triggered a clause in Hawaiian’s contract with pilots that requires the airline to suspend ‘Ohana interisland turboprop services.

Looking ahead to the fourth quarter

With Hawaii opening to tourists who get a pre-departure virus test, and with Hawaiian launching a program offering a pre-departure virus testing program through the mail, the carrier has hopes that things are starting to look up. In fact, the airline is going back to being bold with the resumption of the longest scheduled domestic flight in the United States.

Hawaiian is resuming its nonstop Honolulu to Boston flight. Photo: Vincenzo Pace | JFKJets.com

Nevertheless, the airline expects capacity in the fourth quarter to be 70% lower year-over-year. Some of the stronger periods for Hawaiian this quarter should be the late-December winter holidays and the late-November Thanksgiving holiday.

Deferring the Boeing 787s

In the airline’s second-quarter results, the carrier stated it was in discussions with Boeing to defer its order for 10 787-9 Dreamliners. Now, the airline has confirmed the deferrals for the 10 Dreamliners.

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Hawaiian Boeing 787
Hawaiian Airlines has deferred its 787 deliveries. Photo: Hawaiian Airlines

Deferring aircraft delivery helps reduce capital expenditures. Like JetBlue, Hawaiian does not need these jets right now. When it does, it will be a time when the industry is beyond recovery.

With the first 787-9s coming in September 2022 and the remainder coming through 2026, Hawaiian Airlines is clearly targeting a post-vaccine demand market. With some expecting a vaccine to become widely available by the end of 2021, by 2022, Hawaiian expects to be in a place where it can adequately use and pay for the 787s.

Are you sad to see Hawaiian defer its Boeing 787s to 2022? Let us know in the comments!

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