Hawaiian Holdings, Inc. (NASDAQ:HA) Q4 2022 Earnings Call Transcript

And do we have as many airplanes as we want to fly our flight and server demand, particularly in the peak time of the year and the summer and if we can — we’re going to continue to work with our partners at Pratt, who have been a good partner with us over the year to see if we can get a little bit more certainty and hopefully a little bit more aircraft availability in the summer which would allow us to get some of the revenue back that we’re leaving on the table if we don’t have aircrafts flying.

Dan McKenzie: I see. Okay, thanks for the time guys.

Peter Ingram: Yeah. Thanks, Dan.

Operator: Our next question comes from the line of Andrew Didora with Bank of America. Please proceed with your question.

Andrew Didora: Hey, good afternoon, everyone. Brent, first question for you. In your prepared remarks you spoke a bit about some modest softness in Mainland to Hawaii, I believe. Why do you think that is? And how are you seeing — what are you seeing out of your competitors? How are they behaving on that route as everyone tries to vie for the strong leisure consumer?

Brent Overbeek: Yes. I think we clearly saw some real strength in the fall last year. We started to see as we came in the holidays. Things were slowing down a little bit for 4Q, but we hit that in our forecast. The front part of 1Q, I will say, we saw bookings slow a little bit. Early on in the year, we saw some promotional fares that got a little more aggressive than what we had seen in some of the shoulder periods for the fall. However, since we’ve really come back from the New Year, I am pretty encouraged with some of the progress we’ve seen on the traffic front and we’ve seen some real positive builds. We’ve seen some of the levels of discounting abate versus where they were early on the year. So I think we’re trending in the right direction.

Andrew Didora: Got it. Thank you. And then Shannon, I think you said that you include the pilot contract as of March 1. Did I hear that correctly? And given that it’s partial quarter, could you just give us a sense of what the quarterly labor impact is through 2023?

Shannon Okinaka: Sure. Thanks, Andrew. Yes, you did hear that correct. If the pilots do ratify the agreement, it’ll be effective — the rates will be effective March 1, which is why we’ve included it from there. So the effect of the contract, which is more than just rates. But for the first quarter, I think we’ve added a little over half a point for the impact to the first quarter, I think for the full year, it’s a little over 1.5 points from the ALPA contract. And again, that’s 10 months of the year, not 12.

Andrew Didora: Right. Okay. Look, I know it’s hard to forecast an exact inflection in earnings power here, but until you get there, how should we think about potential cash burn here over the next several quarters?

Shannon Okinaka: Yeah. I think it is a little difficult just to forecast, given we’re hopeful that Japan comes back quicker. I think in the short term, we are just going to be more conservative about how we use our cash. So we’ve got — we’re not — we’re still missing absolutely. I think that’s very important for our future. But we’re looking at ways to reduce costs, which then conserve cash. But we’re not — I don’t have any major program planned to conserve cash. We still have quite a bit of cash in our bank that we’re going to use to invest in long term initiatives.