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Hawaiian Holdings (HA) Tweaks View on Wildfire, Engine Woes
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Hawaiian Holdings (HA - Free Report) revised its outlook for key metrics due to certain factors. The devastation caused by a wildfire to Lahaina town in West Maui is expected to result in reduced travel demand to Maui from the U.S. Mainland and Neighbor Islands. Also, issues with RTX's Pratt & Whitney engines that power Airbus' popular A320neo jets added to the woes. We note that HA’s fleet includes A320neo jets with engines, which need to be inspected following problems identified by Pratt & Whitney.
Updated Outlook
For the third quarter of 2023, available seat miles or ASM are now projected to increase 4-5.5% from third-quarter 2022 levels (earlier guidance: 4.5-7.5% rise). Total revenues per available seat miles are now anticipated to decrease 4-7% from third-quarter 2022 levels (prior projection: 2-5% decline).
Cost per ASM (excluding fuel & non-recurring items) is still expected to improve 7-10% from third-quarter 2022 numbers. Gallons of jet fuel consumed are now envisioned to jump 7.5-9.5% from third-quarter 2022 level (earlier anticipation: 8-11% increase). Fuel price per gallon is now suggested to be $2.91 in third-quarter 2023 (earlier view was $2.67). The effective tax rate is still anticipated to be 21% in the third quarter.
ASMs are now projected to climb in the 8-10% band for full-year 2023 (earlier guidance: 8.5-10.5% jump). Cost per ASM (excluding fuel & non-recurring items) for 2023 is still expected to rise 3-5% from 2022 actuals. Fuel price per gallon is now suggested to be $2.81 in the current year compared with $2.70 expected earlier.
Gallons of jet fuel consumed are now estimated to increase 12.5-14.5% from the 2022 level (previous guidance: 13-15%). Capex for the current year is still expected in the $265-$295 million band.
Due to the West Maui wildfire induced reduced travel demand, HA shares have plunged 26.3% in a month’s time, compared with its industry’s 6.7% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Hawaiian Holdings currently carries a Zacks Rank #3 (Hold).
United Airlines is seeing steady recovery in domestic and international air-travel demand. Owing to this, UAL expects revenues for the September quarter to grow 10-13% year over year. Our projection for third-quarter total revenues hints at an increase of 11.4% year over year.
For third-quarter 2023, United Airlines anticipates capacity to improve 16% from the year-ago reported figure. The Zacks Consensus Estimate for UAL’s current-year earnings has been revised 14.2% upward over the past 60 days.
An uptrend with respect to e-commerce even in the post-pandemic scenario is a huge positive for Air Transport Services. It is the primary driver behind an uptick in demand for midsize air freighters.
Driven by the upbeat demand, ATSG has delivered a record six converted freighters under lease in a month to its customers worldwide. The Zacks Consensus Estimate for ATSG’s current-year earnings has been revised 11.2% upward over the past 60 days.
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Hawaiian Holdings (HA) Tweaks View on Wildfire, Engine Woes
Hawaiian Holdings (HA - Free Report) revised its outlook for key metrics due to certain factors. The devastation caused by a wildfire to Lahaina town in West Maui is expected to result in reduced travel demand to Maui from the U.S. Mainland and Neighbor Islands. Also, issues with RTX's Pratt & Whitney engines that power Airbus' popular A320neo jets added to the woes. We note that HA’s fleet includes A320neo jets with engines, which need to be inspected following problems identified by Pratt & Whitney.
Updated Outlook
For the third quarter of 2023, available seat miles or ASM are now projected to increase 4-5.5% from third-quarter 2022 levels (earlier guidance: 4.5-7.5% rise). Total revenues per available seat miles are now anticipated to decrease 4-7% from third-quarter 2022 levels (prior projection: 2-5% decline).
Cost per ASM (excluding fuel & non-recurring items) is still expected to improve 7-10% from third-quarter 2022 numbers. Gallons of jet fuel consumed are now envisioned to jump 7.5-9.5% from third-quarter 2022 level (earlier anticipation: 8-11% increase). Fuel price per gallon is now suggested to be $2.91 in third-quarter 2023 (earlier view was $2.67). The effective tax rate is still anticipated to be 21% in the third quarter.
ASMs are now projected to climb in the 8-10% band for full-year 2023 (earlier guidance: 8.5-10.5% jump). Cost per ASM (excluding fuel & non-recurring items) for 2023 is still expected to rise 3-5% from 2022 actuals. Fuel price per gallon is now suggested to be $2.81 in the current year compared with $2.70 expected earlier.
Gallons of jet fuel consumed are now estimated to increase 12.5-14.5% from the 2022 level (previous guidance: 13-15%). Capex for the current year is still expected in the $265-$295 million band.
Due to the West Maui wildfire induced reduced travel demand, HA shares have plunged 26.3% in a month’s time, compared with its industry’s 6.7% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Hawaiian Holdings currently carries a Zacks Rank #3 (Hold).
Investors interested in the Zacks Transportation sector may consider stocks like United Airlines (UAL - Free Report) and Air Transport Services (ATSG - Free Report) .UAL and ATSG currently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Airlines is seeing steady recovery in domestic and international air-travel demand. Owing to this, UAL expects revenues for the September quarter to grow 10-13% year over year. Our projection for third-quarter total revenues hints at an increase of 11.4% year over year.
For third-quarter 2023, United Airlines anticipates capacity to improve 16% from the year-ago reported figure. The Zacks Consensus Estimate for UAL’s current-year earnings has been revised 14.2% upward over the past 60 days.
An uptrend with respect to e-commerce even in the post-pandemic scenario is a huge positive for Air Transport Services. It is the primary driver behind an uptick in demand for midsize air freighters.
Driven by the upbeat demand, ATSG has delivered a record six converted freighters under lease in a month to its customers worldwide. The Zacks Consensus Estimate for ATSG’s current-year earnings has been revised 11.2% upward over the past 60 days.