HONOLULU — Hawaiian Airlines reported an "encouraging" $98 million loss in the first quarter of the year, a $35 million year-over-year improvement when the company lost $133 million in the first quarter of 2022.

What You Need To Know

  • In its first earnings call of the year, Hawaiian Airlines reported a loss of nearly $100 million 

  • The company reported $612 million in first-quarter revenue, a 28% increase from the previous year

  • While leisure demand remains strong, Japanese tourism to the islands – one of the Hawaiian Airlines' bread and butter routes pre-pandemic – remains sluggish

  • The airline announced increased flights throughout the summer in Los Angeles, Austin, Boston and Las Vegas due to expected strong demand

The company reported $612 million in first-quarter revenue, a 28% increase from the previous year, operating with a 15% higher capacity. Last year, revenue fell due to the effects of the omicron variant of the coronavirus and other pandemic-related restrictions. 

Other revenue, however, in the first quarter, fell 12.4% due to less cargo revenue, company officials said. 

"2023 is off to an encouraging start," said Peter Ingram, president of Hawaiian Holdings, the parent company of Hawaiian Airlines, during the airline's first quarterly investor call Tuesday. "Many of the challenges that we've discussed in previous calls remain, but the leisure demand in a substantial majority of our market remains strong, and we outperformed our revenue guidance in the first quarter."

Finally, operating at the start of a year with no COVID pandemic restrictions looming, the Honolulu-based airline looks to continue rebounding financially after two sluggish years. 

But Ingram said the airline continues to face challenges and still has a ways to go. 

Ingram said the ongoing runway construction at Daniel K. Inouye International Airport in Honolulu and air traffic control protocols have disrupted Hawaiian Airlines' "on-time performance, impairing its scheduling and adversely affecting its financial results."

While Hawaiian Airlines has capitalized on the post-pandemic tourism demand from much of its routes for travel to the islands, one of its biggest markets remains sluggish.

Tourism from Japan, one of the most significant demographic groups pre-pandemic, has yet to recover fully, forcing the Honolulu-based airline to alter its plans and re-route planes to other fruitful locations this summer, officials said.

"Demand recovery of outbound Japan travel remains slow," said Ingram. "We've seen some green shoots in recent weeks, but our Japan routes remain far from a complete recovery."

Japan dropped its pandemic travel restrictions last year, but tourism demand to Hawaii has not rebounded as quickly as in other parts of the world. Pre-pandemic, Hawaii is one of the top three destinations for Japanese tourists. Taiwan and South Korea are the other popular places.

Ingram said that due to the lack of demand in Japan, the company will shift flights to the "more rewarding U.S. mainland market this summer but not as much as we would prefer as we're still plagued with limitations on our A321 Neo fleet capacity."

The airline is experiencing supply chain and engine delays due to its "engine supplier's inability to meet spare engine commitment," forcing them to substitute its A321 fleet with the more gas-guzzling A330 aircraft. 

Company officials said fuel consumption for the first quarter of 2023 was up 21% compared to the first quarter of 2022 due to higher capacity and inefficiencies resulting from these challenges.

Still, company officials expect a busy summer. Anticipating strong demand, Hawaiian Airlines has already planned to increase weekly flights between Honolulu and Austin, Boston, Las Vegas, and Pago Pago and a fourth daily flight between Honolulu and Los Angeles twice per week.

Additionally, Hawaiian Airlines will resume service between Honolulu and Fukuoka beginning April 28 with thrice-weekly service.