We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why You Should Hold Hawaiian Holdings (HA) in Your Portfolio
Read MoreHide Full Article
Hawaiian Holdings (HA - Free Report) is benefiting from a buoyant air travel demand scenario and debt-reduction efforts. However, escalating fuel cost remains a concern.
Factors Favoring HA
Owing to robust air travel demand, HA is expanding capacity in the current scenario. Management provided an impressive view for available seat miles (ASM: a measure of capacity) for the second quarter of 2023. Betterment in load factor (percentage of seats filled by passengers) owing to improved traffic is an added positive.
Hawaiian Holdings received encouraging news on the labor front when its pilots, represented by Air Line Pilots Association, cleared a four-year deal. Following the approval, pilots of the carrier are eligible for pay-hikes that will average more than 32% over the four-year period. In the voting procedure, 93% pilots cast their votes with 65% favoring the deal.
The agreement, which took effect on Mar 2, 2023, includes industry-leading rates for HA’s future Airbus A330F cargo fleet. Pilots at HA are now eligible for an immediate 16.6% pay raise on average.
Other benefits include the presence of a $10 million ratification bonus and the creation of a new $2,500 health reimbursement account. This deal will improve the quality of life of pilots by providing more schedule flexibility apart from raising company retirement contributions.
Key Risks
The current scenario of rising fuel costs does not bode well for the airline. Evidently, average fuel cost per gallon (economic) increased 8.5% to $3.07 in first-quarter 2023. Despite coming down from the highs, the metric is still elevated. Fuel price per gallon is expected to be $2.62 in the June quarter, higher than the second-quarter 2022 levels.
Zacks Rank
HA currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Triton International Limited .
Copa Holdings, which presently flaunts a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 765.6% and 75.4% growth, respectively, on a year-over-year basis.
Triton, which currently carries a Zacks Rank #2 (Buy), is benefitting from its consistent efforts to reward shareholders through dividends and share repurchases.
Triton has an impressive liquidity position. TRTN’s current ratio (a measure of liquidity) was 3.97 at the end of first-quarter 2023. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Why You Should Hold Hawaiian Holdings (HA) in Your Portfolio
Hawaiian Holdings (HA - Free Report) is benefiting from a buoyant air travel demand scenario and debt-reduction efforts. However, escalating fuel cost remains a concern.
Factors Favoring HA
Owing to robust air travel demand, HA is expanding capacity in the current scenario. Management provided an impressive view for available seat miles (ASM: a measure of capacity) for the second quarter of 2023. Betterment in load factor (percentage of seats filled by passengers) owing to improved traffic is an added positive.
Hawaiian Holdings received encouraging news on the labor front when its pilots, represented by Air Line Pilots Association, cleared a four-year deal. Following the approval, pilots of the carrier are eligible for pay-hikes that will average more than 32% over the four-year period. In the voting procedure, 93% pilots cast their votes with 65% favoring the deal.
The agreement, which took effect on Mar 2, 2023, includes industry-leading rates for HA’s future Airbus A330F cargo fleet. Pilots at HA are now eligible for an immediate 16.6% pay raise on average.
Other benefits include the presence of a $10 million ratification bonus and the creation of a new $2,500 health reimbursement account. This deal will improve the quality of life of pilots by providing more schedule flexibility apart from raising company retirement contributions.
Key Risks
The current scenario of rising fuel costs does not bode well for the airline. Evidently, average fuel cost per gallon (economic) increased 8.5% to $3.07 in first-quarter 2023. Despite coming down from the highs, the metric is still elevated. Fuel price per gallon is expected to be $2.62 in the June quarter, higher than the second-quarter 2022 levels.
Zacks Rank
HA currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Triton International Limited .
Copa Holdings, which presently flaunts a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 765.6% and 75.4% growth, respectively, on a year-over-year basis.
Triton, which currently carries a Zacks Rank #2 (Buy), is benefitting from its consistent efforts to reward shareholders through dividends and share repurchases.
Triton has an impressive liquidity position. TRTN’s current ratio (a measure of liquidity) was 3.97 at the end of first-quarter 2023. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.