This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Hawaiian Air's Routes, Margins Grow but Flat Share Price Bugs CEO

Stocks in this article: ALK HA JBLU UAL

HONOLULU -- ( TheStreet) -- You wouldn't know it from the share price but 2012 has been a big year for Hawaiian (HA).

The carrier expanded capacity 25%, including the addition of a daily Honolulu-New York flight, opened a new hub in Maui, and increased its net income margin to 3.8% from 2.2%. A week ago, CEO Mark Dunkerley signed a three-year contract extension with the carrier and next Monday he will seek to lay out the case for the company's stock at an investor day in New York.

Additionally, Dunkerley made a brief appearance in September on the TV show "Hawaii Five-O," an indication of Hawaiian's importance to the state and its tourist economy.

The share price, which began the year at $5.91, closed Friday at $5.94.

"Clearly it's a source of some frustration," Durkerley said, in an interview. "The business has had a pretty good year, the company continues to execute its strategy, and margins are expanding. We've seen good demand across all of the segments of our business, and while fuel prices are up, we have recaptured that with increases in revenue."

Perhaps the biggest negative for Hawaiian this year has been the buildup of competitors' Hawaii flying, particularly in the San Francisco Bay Area. Alaska (ALK) now operates 27 daily flights to four Hawaii airports from seven mainland cities. It competes with Hawaiian in Oakland, Calif., San Francisco, San Jose, Sacramento, Seattle and Portland, Ore. Meanwhile, low-fare Allegiant (ALGT) serves Hawaii from smaller cities including California's Fresno, Stockton and Monterrey and Bellingham, Wash.

In an October report, following Hawaiian's third-quarter earnings release, Imperial Capital analyst Bob McAdoo wrote that Hawaiian faces "swelling capacity in a few Hawaiian markets, stifling revenue growth." McAdoo said industry capacity between Hawaii and North America is up 13% this year, including 25% growth in the Bay Area and 15% growth in Southern California. He also said that "competitors added capacity on two of Hawaiian's eight international routes." In both mainland and international markets, Hawaiian saw declines in revenue per available seat mile. In the third quarter, RASM fell 5.7% from the same period a year earlier.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs