This Day On The Street
Continue to site
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

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

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

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 - Get Report) 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ALK $64.64 0.00%
HA $24.22 0.00%
JBLU $20.16 0.00%
UAL $54.59 0.00%
AAPL $130.28 0.00%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs