Hawaiian Holdings, Inc.’s (HA - Free Report) wholly owned subsidiary Hawaiian Airlines reported traffic figures for December 2019. Traffic (measured in Revenue Passenger Miles or RPMs) increased 7.7% to 1.57 billion in the month. Available Seat Miles (ASMs) climbed 5.4% to 1.83 billion in the period. With traffic growth outpacing capacity expansion, load factor (percentage of seats filled by passengers) improved 190 basis points (bps) to 85.9%.
During 2019, the carrier recorded a 3.6% rise in RPMs while ASMs inched up 2.1%. As a result, load factor was up 130 bps. While passenger count slipped 0.8% in 2019, it augmented 2.2% in December.
Shares of Hawaiian Holdings have dipped 2.2% in a year’s time against the industry’s 9.9% rise. The downside is primarily due to decline in passenger revenues (which contribute more than 90% to the top line, slipped 0.8% in the first nine months of 2019) on account of pricing pressure following Southwest's entry in Hawaii, the primary market of Hawaiian Airlines.
Additionally, weakness pertaining to inter-island travel demand is hurting operating revenues per available seat miles (RASM: a key measure of unit revenues). As an evidence, RASM slid 2.3% in the first nine months of 2019. The company expects RASM to have decreased in the 0.5-3.5% range during the December quarter due to pressures related to average fares in the carrier’s domestic markets.
Zacks Rank & Key Picks
Hawaiian Holdings carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS - Free Report) , Delta Air Lines, Inc. (DAL - Free Report) and SkyWest, Inc. (SKYW - Free Report) . While Controladora Vuela sports a Zacks Rank #1 (Strong Buy), Delta and SkyWest carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Controladora Vuela, Delta and SkyWest have rallied more than 58%, 20% and 31%, respectively, in a year’s time.
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