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Hawaiian Holdings' (HA) Arm Inks SAF-Related Deal With Gevo

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Hawaiian Holdings, Inc. (HA - Free Report) subsidiary, Hawaiian Airlines, announced that it entered a sustainable aviation fuel (SAF) sales agreement with biofuel company Gevo, Inc. Per the deal, Hawaiian Airlines will purchase 50 million gallons of SAF over five years. Gevo is anticipated to supply SAF from a facility to be constructed in the Midwestern United States and shall start deliveries to Hawaiian Holdings’ gateway cities in California in 2029.

This deal is subject to certain conditions, which include Gevo developing, financing and constructing the facility to produce SAF (as mentioned in the deal).

Gevo will generate SAF with the help of residual starch from inedible field corn (grown using regenerative farming practices). The production process will use renewable electricity and renewable natural gas, resulting in low-carbon fuels with substantially reduced carbon intensity. 

Notably, Gevo aims to work in a way that maximizes value and reduces waste generation. It is done using the same portion of farmland to produce both animal feed and renewable fuels, while sequestering atmospheric carbon through photosynthesis.

Peter Ingram, Hawaiian Holdings' president and chief executive officer, stated, "This offtake agreement gets us one step closer to achieving our goal of net-zero carbon emissions by 2050." He further added, "We intend to continue to invest in SAF, which will be pivotal in reducing our impact on the environment."

The reopening of the global economy and no travel-related restrictions post COVID-19 led to the buoyancy in air-travel demand. Hence, the fuel sales agreement to decarbonize the aviation industry through the SAF advancement should boost Hawaiian Holdings’ competitive position in the aviation industry.

Currently, Hawaiian Holdings carries a Zacks Rank #3 (Hold).

Investors interested in better-ranked stocks from the Zacks Transportation – Airline industry can consider Copa Holdings, S.A. (CPA - Free Report) , Alaska Air Group, Inc. (ALK - Free Report) and American Airlines (AAL - Free Report) . Copa Holdings presently sports a Zacks Rank #1 (Strong Buy), whereas Alaska Air and American Airlines carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Copa Holdings has an expected earnings growth rate of 39.83% for the current year. CPA delivered a trailing four-quarter earnings surprise of 33.35%, on average.

The Zacks Consensus Estimate for CPA’s current-year earnings has improved 21.1% over the past 90 days. Shares of CPA have jumped 32.6% over the past six months.

Alaska Air has an expected earnings growth rate of 32.64% for the current year. ALK delivered a trailing four-quarter earnings surprise of 8.98%, on average.

The Zacks Consensus Estimate for ALK’s current-year earnings has improved 11.4% over the past 90 days.

American Airlines has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 7.79%, on average.

The Zacks Consensus Estimate for AAL’s current-year earnings has improved 31.1% over the past 90 days. Shares of AAL have gained 13.8% over the past six months.

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