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“Our industry leading margins and strong operational performance are proof points that we are making the right investments to differentiate ourselves from our domestic-focused peers,” he said. “Today’s results reinforce we are on the right path for the future.”
Aviation historian Peter Forman said Alaska’s high pretax margins indicate it’s “really a well-run company right now. If you can get those kinds of profit margins, you are really doing something fantastic.”
“I remember years ago that the low-single-digit profit margins were considered reasonably good in the airline industry, so 13% is great,” he said. “Hawaiian has teamed up with a very strong company that is doing a good job, so it looks like they’ve really got a great parent company here.”
Forman also noted that back in the fourth quarter of 2023, Hawaiian had a tough quarter that sank its stock price and attracted Alaska as a buyer. But since that time, he said, “Hawaiian has achieved a big improvement and is even looking at overall growth next year.”
Alaska said Hawaiian’s
financial performance for the period Sept. 18-30 represented approximately
9 cents’ earnings per share to the combined results. But Alaska’s third-quarter tax rate of about 28% represented an approximately 7-cent headwind due to
temporary merger-related impacts.
Alaska said that as of October, “Hawaiian’s profitability continues to recover as temporary challenges including impacts from the Maui wildfires and many one-time cost headwinds like the A321neo engine grounding and A330F and 787 startup costs have largely resolved,” totaling some $130 million in profit-and-loss drag.
Alaska said it expects continued improvement across Hawaiian’s network with North America passenger revenue per available seat mile up midsingle digits and international passenger revenue per available seat
mile flat year over year. The airline added that neighbor island results also are showing material year-over-year
improvement.
Forman said, “I just see a lot of positives: both Hawaiian’s performance and Alaska doing really well as a parent company,” which bodes well for consumers.
“Because Hawaiian is improving so well, there’s not going to be any need to change things too much, which is good, because I
really think they have the best in-flight experience of any airline in the United States, particularly with the addition of the high-speed Starlink internet,” he said.
Keith Vieira, principal of KV &Associates, Hospitality Consulting, said he expects the merger will prove positive for Hawaii as a destination, too.
“When you have a concentrated effort on trying to improve something, stepping into some of the
benefits that Hawaiian has as a brand, I think we’re going to see the benefits,” Vieira said. “(The combined airline) is going to be more aggressive; they are going to be leaner so perhaps able to provide more promotions and offers in the marketplace.”
He said he expects Alaska will want to establish its presence overseeing the two airlines, “so I think that there will be a lot of positive messaging that they are going to put forth in the market, and I think Hawaii will see the benefit. “
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Publish date : 2024-10-31 23:11:00
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