Hawaiian Holdings | research notes

Hawaiian Holdings, Inc.: A Leader in the Hawaiian Islands' Aviation Industry

Hawaiian Holdings, Inc. (NASDAQ: HA), headquartered in Honolulu, Hawaii, is a holding company that owns and manages Hawaiian Airlines, Inc., a leading airline serving the Hawaiian Islands, the U.S. mainland, and international destinations in the Asia-Pacific region.

Company Overview

Hawaiian Holdings was established in 1993 as a subsidiary of Hawaiian Airlines prior to its initial public offering in 2005. The company has a long and rich history dating back to 1929 when Hawaiian Airlines was founded as Inter-Island Airways.

Hawaiian Holdings operates through its three segments:

• Hawaiian Airlines: Provides scheduled passenger and cargo service, including inter-island flights within Hawaii, flights between Hawaii and the U.S. mainland, and international flights to destinations in the Asia-Pacific region.
• Ohana by Hawaiian: Offers inter-island flights within Hawaii under the Ohana by Hawaiian brand, focusing on low-cost service.
• HawaiianMiles: The airline's loyalty program.

Fleet and Destination Network

Hawaiian Holdings' fleet consists of a mix of Airbus A321neos, A330s, and Boeing 717s. The airline operates scheduled flights to over 30 destinations across the United States, including major cities on the West Coast and the East Coast, as well as international destinations in Japan, South Korea, Australia, New Zealand, and Tahiti.

Financial Performance

Hawaiian Holdings has consistently reported strong financial results in recent years. In 2021, despite the challenges of the COVID-19 pandemic, the company generated $3.3 billion in revenue with a net income of $146 million. The company expects to continue its growth trajectory in the years to come as travel demand recovers.

Corporate Values and Sustainability

Hawaiian Holdings is committed to its corporate values of safety, hospitality, integrity, shared success, and sustainability. The company has a strong focus on environmental stewardship, reducing carbon emissions, and supporting local communities.

Competitive Landscape

Hawaiian Holdings operates in a highly competitive aviation industry, with domestic carriers such as United Airlines, Southwest Airlines, and Delta Air Lines as its main competitors for mainland flights. The airline also faces competition from foreign carriers such as Japan Airlines and All Nippon Airways on international routes.

Outlook

Hawaiian Holdings is well-positioned to continue its growth and success in the years to come. With its strong brand recognition, loyal customer base, and commitment to innovation and sustainability, the company is expected to remain a leading force in the Hawaiian Islands' aviation industry.

Business Model of Hawaiian Holdings Company

Hawaiian Holdings, Inc. (HA) is the parent company of Hawaiian Airlines, Inc., a major commercial airline operating in the Asia-Pacific region. Its business model is primarily based on the following components:

• Passenger Transportation: Hawaiian Airlines provides scheduled passenger transportation services within the Hawaiian Islands, between the mainland United States and Hawaii, and to international destinations in Asia and Australia. It also offers inter-island flights connecting the major Hawaiian islands.

• Cargo Services: Hawaiian Airlines offers freight and cargo transportation services, including express and overnight shipments, to destinations within its network.

• Charter Flights: The company provides charter flight services for both passenger and cargo transportation on a limited basis.

• Tourism-Oriented Businesses: Hawaiian Holdings operates various tourism-oriented businesses, including its own tour operator (Hawaiian Vacations), a duty-free retail store at Honolulu International Airport, and several vacation rentals on the island of Hawaii.

Advantages to Competitors

Hawaiian Holdings enjoys several advantages over its competitors in the airline industry:

• Strong Brand Recognition: Hawaiian Airlines has a strong brand reputation for its safety, reliability, and commitment to Hawaiian culture and values. This has helped it to attract and retain a loyal customer base.

• Dominant Market Share in Hawaii: Hawaiian Airlines has a dominant market share in the Hawaiian Islands, which gives it a significant competitive advantage in terms of pricing and route availability.

• Geographic Isolation: The isolated location of Hawaii provides a natural barrier to entry for competing airlines, reducing the threat of direct competition.

• Focus on Leisure Travel: Hawaiian Airlines primarily targets leisure travelers, which allows it to differentiate itself from competitors that focus on business travel. This specialization enables it to tailor its services and marketing efforts towards its specific target audience.

• Strong Financial Performance: Hawaiian Holdings consistently reports strong financial performance, with high profit margins and a strong cash position. This allows it to invest in its fleet, services, and marketing, further enhancing its competitive advantage.

Outlook for Hawaiian Holdings, Inc.

Financial Performance

• Resilient Revenue Outlook: Hawaiian Airlines, the primary subsidiary of Hawaiian Holdings, is expected to benefit from increased tourism demand and strong cargo revenue.
• Rising Fuel Costs: However, the company faces challenges from rising fuel costs, which could impact margins.
• Improved Passenger Traffic: The easing of travel restrictions and pent-up demand are driving passenger traffic growth.
• Conservative Capacity Expansion: Hawaiian Airlines is cautiously expanding its capacity to meet demand while balancing costs.

Operational Outlook

• Fleet Modernization: The company continues to modernize its fleet with fuel-efficient aircraft, reducing operating costs.
• Network Expansion: Hawaiian Airlines is exploring new destinations and expanding frequencies to meet the growing demand for travel.
• Joint Ventures and Alliances: Hawaiian Holdings is pursuing joint ventures and alliances to enhance its connectivity and customer offerings.
• Improved Customer Service: The company is investing in technology and training to enhance the passenger experience.

Market Dynamics

• Competition: Hawaiian Airlines faces competition from legacy carriers and low-cost airlines in the Pacific region.
• Tourism Trends: The outlook for tourism in Hawaii remains positive, driven by strong demand from the US mainland and international markets.
• Economic Headwinds: Rising inflation and potential economic recession could impact consumer spending and travel demand.
• Sustainability Initiatives: The company is committed to reducing its environmental footprint and promoting sustainable practices.

Industry Trends

• Increased Leisure Travel: Post-pandemic, leisure travel is rebounding strongly.
• Government Support: The government is implementing policies to support the aviation industry during the recovery.
• Technological Advancements: Airlines are adopting new technologies to improve efficiency and enhance the passenger experience.
• Industry Consolidation: The airline industry continues to consolidate, leading to fewer carriers and increased market concentration.

Investment Thesis

• Strong Revenue Growth: Hawaiian Airlines is expected to benefit from the recovery in tourism and increased cargo demand.
• Cost Optimization: Fleet modernization and operational efficiency initiatives will support margin expansion.
• Favorable Market Dynamics: Positive tourism trends and industry support create a favorable market environment.
• Management Execution: Hawaiian Holdings has a proven track record of strong execution and has successfully navigated previous challenges.

Risks

• Fuel Price Volatility: Rising fuel costs can significantly impact airline profitability.
• Economic Recession: A downturn in the economy could lead to reduced travel demand.
• Competitive Pressure: Increasing competition from legacy and low-cost carriers can erode market share.
• Regulatory Changes: Government regulations and environmental policies could impact operating costs and route networks.

Companies Similar to Hawaiian Holdings that Customers May Also Like:

1. Alaska Airlines

• Home Page
• Customers appreciate Alaska Airlines' reliable flights, comfortable seating, and friendly service. The airline also offers a generous frequent flyer program and a wide range of destinations in the US and abroad.

2. Southwest Airlines

• Home Page
• Known for its low fares, friendly staff, and flexible booking options, Southwest Airlines is a popular choice for budget-conscious travelers. The airline also offers a strong network of routes throughout the US and Mexico.

3. United Airlines

• Home Page
• United Airlines is a global airline with a vast network of routes connecting the US to destinations worldwide. Customers appreciate the airline's reliable service, comfortable planes, and extensive frequent flyer program.

4. American Airlines

• Home Page
• American Airlines is another major US airline with a strong international presence. Customers like the airline's comfortable seats, spacious cabins, and a variety of in-flight entertainment options.

5. Delta Air Lines

• Home Page
• Delta Air Lines is known for its superior customer service, comfortable planes, and a wide range of amenities, including flat-bed seats in business class. The airline also has a strong network of routes both domestically and internationally.

Why Customers Would Like These Companies:

• Low fares: Southwest Airlines and Alaska Airlines offer competitive fares, especially for budget-conscious travelers.
• Comfortable seating: All of the listed companies provide comfortable seating options, including spacious cabins and ergonomic seats.
• Friendly service: Customers appreciate the friendly and attentive service provided by the staff of these airlines.
• Extensive route networks: Hawaiian Holdings, Delta Air Lines, and United Airlines offer a comprehensive range of destinations within the US and abroad.
• Loyalty programs: Each airline has a frequent flyer program that rewards customers with points and benefits for repeat travel.

History of Hawaiian Holdings, Inc.

Early Years (1929-1953): Inter-Island Airways

• 1929: Inter-Island Airways is founded by Stanley C. Kennedy and Gordon Castle in Honolulu, Hawaii.
• 1931: The company launches scheduled passenger flights between Honolulu, Hilo, and Maui.
• 1941: Inter-Island Airways is temporarily grounded due to the attack on Pearl Harbor.
• 1948: The company resumes operations with a fleet of Douglas DC-3s.

Post-War Growth (1953-1985): Hawaiian Airlines

• 1953: Inter-Island Airways is renamed Hawaiian Airlines.
• 1959: Hawaiian Airlines introduces jet aircraft into its fleet with the acquisition of Boeing 707s.
• 1961: The company begins offering service to the U.S. mainland, with flights to Los Angeles and San Francisco.
• 1979: Hawaiian Airlines acquires Aloha State Airlines, another Hawaiian carrier.

Expansion and Diversification (1985-present): Hawaiian Holdings

• 1985: Hawaiian Air Group, the parent company of Hawaiian Airlines, is formed.
• 1994: Hawaiian Airlines launches its codeshare partnership with Delta Air Lines.
• 2001: Hawaiian Air Group changes its name to Hawaiian Holdings, Inc.
• 2002: The company acquires Reno Air.
• 2004: Hawaiian Airlines launches its first international flights, to Australia and New Zealand.
• 2005: The company acquires Frontier Airlines, which it later sells in 2013.
• 2013: Hawaiian Holdings launches 'Ohana by Hawaiian, a low-cost carrier.
• 2015: Hawaiian Airlines introduces its first Airbus A330 aircraft.
• 2017: Hawaiian Holdings acquires Boston-based carrier Cape Air.
• 2019: Hawaiian Airlines launches its new livery and brand identity.

Recent Developments

• 2020: Hawaiian Airlines and 'Ohana by Hawaiian suspend operations due to the COVID-19 pandemic.
• 2021: Hawaiian Airlines gradually resumes operations, with a focus on domestic and transpacific flights.
• 2022: Hawaiian Airlines becomes the first U.S. airline to resume flights to Tahiti, following the closure of the border due to COVID-19.

Today, Hawaiian Holdings, Inc. operates a fleet of over 70 aircraft and serves over 30 destinations across the U.S., Asia-Pacific, and South Pacific. It is the largest airline in the state of Hawaii and a major player in the transpacific market.

Last Three Years

2020

• March: Hawaiian Airlines suspends all international flights due to COVID-19 pandemic.
• April: Hawaiian Airlines announces furlough of 1,800 employees.
• June: Hawaiian Airlines receives $130 million in federal payroll support.
• December: Hawaiian Airlines announces plans to resume international flights in early 2021.

2021

• January: Hawaiian Airlines resumes international flights to Japan.
• April: Hawaiian Airlines announces plans to increase capacity and hiring.
• July: Hawaiian Airlines reports a net loss of $464 million for the first half of the year.
• December: Hawaiian Airlines announces plans to launch new routes to New York and Las Vegas.

2022

• January: Hawaiian Airlines announces a new loyalty program called HawaiianMiles.
• February: Hawaiian Airlines reports a net loss of $192 million for the fourth quarter of 2021.
• April: Hawaiian Airlines announces plans to launch a new ultra-low-cost carrier called Ohana by Hawaiian.
• July: Hawaiian Airlines reports a net income of $122 million for the second quarter of 2022.
• August: Hawaiian Airlines announces plans to launch a new route to Chicago.

Recent Timelines

• September 2022: Hawaiian Airlines receives approval to launch Ohana by Hawaiian.
• October 2022: Hawaiian Airlines launches Ohana by Hawaiian with flights from Honolulu to Kona, Lihue, and Hilo.
• November 2022: Hawaiian Airlines reports a net income of $187 million for the third quarter of 2022.
• December 2022: Hawaiian Airlines announces plans to launch a new route to San Jose.
• January 2023: Hawaiian Airlines launches a new route to San Jose.

Unlock the Paradise Awaits: Discover Hawaiian Holdings World of Travel Excellence

Embark on an unforgettable journey to the enchanting islands of Hawaii with Hawaiian Holdings, the leading provider of air transportation in the Aloha State. Our website, [website_link], serves as your gateway to experiencing the Hawaiian paradise with exclusive deals, exceptional customer service, and access to our vast network of destinations.

Explore Our Expansive Network:

Indulge in the breathtaking beauty of Hawaii's diverse islands, from the vibrant energy of Honolulu to the serene shores of Kauai. With our extensive network of connections, we make it effortless to island-hop and experience all that this enchanting archipelago offers.

Exclusive Deals and Promotions:

Our website is your go-to destination for the latest deals and promotions on flights to Hawaii. Whether you're planning a romantic getaway, a family adventure, or a long-awaited escape, we offer irresistible fares to fit every budget.

Exceptional Customer Service:

Our dedicated customer service team is here to assist you every step of the way. From booking your flights to providing helpful travel tips, we strive to ensure a seamless and enjoyable experience for all our guests. You can reach us 24/7 through our live chat, email, or phone support.

Loyalty Rewards Program:

Join our HawaiianMiles loyalty program and earn rewards for every flight you take with Hawaiian Airlines. Redeem your miles for future travel, exclusive upgrades, and a host of other perks designed to enhance your flying experience.

Unveiling Paradise Like Never Before:

Immerse yourself in the vibrant culture, rich history, and breathtaking landscapes of Hawaii. Our website features travel guides, destination inspiration, and insider tips to unlock the hidden gems of this island paradise. From breathtaking hikes to secluded beaches, we'll guide you through the ultimate Hawaiian adventure.

Book Your Hawaiian Escape Today:

Visit our website, [website_link], and start planning your dream vacation to Hawaii. Whether you're looking for last-minute deals or planning ahead, our user-friendly interface and secure booking process make it a breeze to book your unforgettable Hawaiian experience.

Aloha from Hawaiian Holdings, where paradise awaits you at every turn. Book your flight today and let us transport you to the islands of your dreams.

Main Suppliers (Upstream Service Providers) of Hawaiian Holdings Inc.

1. Airbus S.A.S.

• Website: https://www.airbus.com/
• Airbus is a leading global aerospace company providing commercial aircraft, military aircraft, space & defense systems, and related services. Hawaiian Airlines operates a fleet of Airbus A321neo, A330-200, and A330-800 aircraft.

2. Boeing Commercial Airplanes

• Website: https://www.boeing.com/commercial/
• Boeing is a multinational aerospace corporation that designs, manufactures, and sells commercial passenger and cargo airplanes, military aircraft, and spacecraft. Hawaiian Airlines operates a fleet of Boeing 717-200 aircraft.

3. Raytheon Technologies Corporation

• Website: https://www.rtx.com/
• Raytheon Technologies is a global aerospace and defense technology company that provides advanced systems and services for commercial, military, and government customers. Hawaiian Airlines uses Raytheon Technologies' avionics and navigation systems in its aircraft.

4. GE Aviation

• Website: https://www.geaviation.com/
• GE Aviation is a global provider of jet engines, components, and integrated systems for commercial and military aircraft. Hawaiian Airlines operates aircraft powered by GE Aviation's CF34 and GEnx engines.

5. Pratt & Whitney

• Website: https://www.ratt-whitney.com/
• Pratt & Whitney is a global manufacturer of aircraft engines, space propulsion systems, and industrial gas turbines. Hawaiian Airlines operates aircraft powered by Pratt & Whitney's PW4000 engines.

6. Safran S.A.

• Website: https://www.safran-group.com/
• Safran is a multinational aerospace and defense company that provides aircraft engines, propulsion systems, interiors, and other equipment. Hawaiian Airlines uses Safran's auxiliary power units (APUs) and landing gear in its aircraft.

7. Rolls-Royce Holdings plc

• Website: https://www.rolls-royce.com/
• Rolls-Royce is a global provider of integrated power systems for use in aviation, defense, and energy markets. Hawaiian Airlines operates aircraft powered by Rolls-Royce's Trent 500 engines.

8. Hawaiian Aircraft Services (HAS)

• Website: https://www.hawaiianaircraft.com/
• HAS is a leading provider of aircraft maintenance, repair, and overhaul (MRO) services in the Pacific region. Hawaiian Airlines utilizes HAS for aircraft maintenance and inspection services.

9. Aviation Partners Boeing (APB)

• Website: https://www.aviationpartnersboeing.com/
• APB is a joint venture between Boeing and Aviation Partners that designs and manufactures advanced winglet systems for commercial aircraft. Hawaiian Airlines uses APB's blended winglets on its Boeing 717-200 fleet.

10. Honeywell International Inc.

• Website: https://www.honeywell.com/
• Honeywell is a global technology company that provides a wide range of products and services in the aerospace, building technologies, industrial, and safety and security industries. Hawaiian Airlines utilizes Honeywell's avionics, navigation, and flight control systems in its aircraft.

Main Customers (Downstream Companies) of Hawaiian Holdings

Hawaiian Holdings, Inc. is the parent company of Hawaiian Airlines, Inc., a major airline that provides scheduled passenger and cargo services between the Hawaiian Islands, the U.S. mainland, and international destinations. The company's main customers are:

1. Leisure Travelers:

• Tourists visiting Hawaii for vacation, including individuals, families, and tour groups.
• Hawaiian residents traveling within the state or to other destinations.

2. Business Travelers:

• Employees of businesses located in Hawaii or the U.S. mainland who travel for work purposes.
• Government officials and contractors working in the Pacific region.
• Military personnel and their families traveling between Hawaii and their duty stations.

3. Cargo Shippers:

• Businesses that ship goods to and from Hawaii, including food products, medical supplies, and industrial materials.
• Government agencies and non-profit organizations that send humanitarian aid and other supplies to the islands.

4. Tour Operators:

• Travel agencies and tour companies that package and sell vacation packages to Hawaii, including flights, accommodations, and activities.
• Cruise lines that offer shore excursions to Hawaii for their passengers.

5. Hotel Chains and Resorts:

• Major hotel chains and independent resorts that offer accommodations to tourists and business travelers visiting Hawaii.
• Time-share companies that manage and rent vacation properties on the islands.

6. Other Business Partners:

• Ground handling service providers that assist with baggage handling, aircraft cleaning, and cargo loading.
• Fuel suppliers that provide jet fuel to Hawaiian Airlines' aircraft.
• Airport authorities that operate and maintain airports used by the airline.

Website:

The website of Hawaiian Holdings is www.hawaiianholdings.com.

Key Revenue Streams of Hawaiian Holdings Company

Hawaiian Holdings Company, the parent company of Hawaiian Airlines, generates revenue from a variety of sources, including:

1. Passenger Revenue

• Domestic Passenger Revenue: Revenue from the transportation of passengers on flights within the United States.
• International Passenger Revenue: Revenue from the transportation of passengers on flights between the United States and international destinations.

2. Cargo Revenue

• Revenue from the transportation of cargo and mail on Hawaiian Airlines flights.

3. Other Revenue

• Revenue from non-flight related services, such as:
  • In-flight services (e.g., food and beverage sales, duty-free shopping)
  • Airport lounge access fees
  • Credit card rewards and loyalty programs
  • Rental car commissions
  • Hotel reservations
  • Tour packages

Estimated Annual Revenue

Hawaiian Holdings Company's total revenue for the fiscal year ended December 31, 2022, was approximately $3.1 billion. The breakdown of revenue by source was as follows:

• Passenger Revenue: $2.7 billion
• Cargo Revenue: $147 million
• Other Revenue: $268 million

Additional Details

• Hawaiian Airlines is the dominant carrier in the Hawaii market, with a market share of over 50%.
• The company's passenger revenue is highly seasonal, with a significant portion of revenue being generated during the peak summer travel season.
• Hawaiian Holdings Company is actively expanding its cargo business, which is expected to be a driver of revenue growth in the future.
• The company's other revenue streams provide a relatively small but stable source of revenue.

Key Partners of Hawaiian Holdings, Inc.

1. United Airlines

• Website: www.united.com

United Airlines is a major global airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. United Airlines also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

2. Southwest Airlines

• Website: www.southwest.com

Southwest Airlines is a low-cost airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. Southwest Airlines also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

3. Alaska Airlines

• Website: www.alaskaair.com

Alaska Airlines is a regional airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. Alaska Airlines also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

4. Japan Airlines

• Website: www.jal.com

Japan Airlines is a major Japanese airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. Japan Airlines also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

5. Korean Air

• Website: www.koreanair.com

Korean Air is a major South Korean airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. Korean Air also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

6. Air China

• Website: www.airchina.com

Air China is a major Chinese airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. Air China also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

7. All Nippon Airways (ANA)

• Website: www.ana.co.jp

All Nippon Airways (ANA) is a major Japanese airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. ANA also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

8. China Eastern Airlines

• Website: www.ceair.com

China Eastern Airlines is a major Chinese airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. China Eastern Airlines also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

9. Delta Air Lines

• Website: www.delta.com

Delta Air Lines is a major global airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. Delta Air Lines also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their schedules and pricing on certain routes.

10. JetBlue Airways

• Website: www.jetblue.com

JetBlue Airways is a low-cost airline that has a codeshare agreement with Hawaiian Airlines. This allows customers of both airlines to travel on the other airline's flights. JetBlue Airways also has a joint venture with Hawaiian Airlines, which allows the two airlines to coordinate their

Key Cost Structure of Hawaiian Holdings

Hawaiian Holdings, Inc. (HA) is a holding company that provides scheduled and charter air transportation services in the Pacific region. The company's key cost structure includes the following:

1. Fuel Costs:

• Fuel is the largest expense for Hawaiian Holdings, accounting for approximately 35-40% of total operating expenses.
• The company's fuel costs are directly affected by global oil prices and fluctuations in the jet fuel market.
• Estimated annual fuel cost: $1.2-$1.5 billion

2. Labor Costs:

• Labor costs, including salaries, benefits, and payroll taxes, represent approximately 25-30% of total operating expenses.
• Hawaiian Holdings employs approximately 7,300 employees, including pilots, flight attendants, and ground personnel.
• Estimated annual labor cost: $800 million-$1 billion

3. Aircraft Depreciation and Maintenance:

• Depreciation and maintenance costs for the company's fleet of aircraft account for approximately 10-15% of total operating expenses.
• Hawaiian Holdings operates a fleet of 61 aircraft, including 25 Airbus A321neos, 13 Airbus A330s, and 23 Boeing 717-200s.
• Estimated annual depreciation and maintenance cost: $300-$450 million

4. Landing and Navigation Fees:

• Landing and navigation fees paid to airports and air traffic control authorities account for approximately 5-7% of total operating expenses.
• These fees vary depending on the location of the airport and the size and type of aircraft used.
• Estimated annual landing and navigation fees: $150-$200 million

5. Marketing and Sales:

• Marketing and sales expenses, including advertising, promotions, and distribution costs, account for approximately 5-7% of total operating expenses.
• Hawaiian Holdings invests heavily in marketing to promote its brand and attract customers.
• Estimated annual marketing and sales cost: $150-$200 million

6. Lease Expenses:

• Lease expenses for aircraft, facilities, and equipment account for approximately 5-7% of total operating expenses.
• Hawaiian Holdings leases a portion of its fleet and other assets to reduce capital expenditures.
• Estimated annual lease expenses: $150-$200 million

7. General and Administrative:

• General and administrative expenses, including salaries, benefits, and other overhead costs, account for approximately 5-7% of total operating expenses.
• These expenses include corporate management, accounting, legal, and administrative support.
• Estimated annual general and administrative expenses: $150-$200 million

Total Estimated Annual Cost Structure:

Based on the estimated costs outlined above, the total annual cost structure for Hawaiian Holdings is approximately $2.9-$3.5 billion.

Sales Channels

Hawaiian Holdings operates through two primary sales channels:

• Direct Sales:
  • Website: Allows customers to book flights, purchase ancillary services, and manage reservations online.
  • Call Center: Provides customer support and assists with bookings and reservations.
  • Airport Kiosks: Located at Hawaiian Airlines terminals, these kiosks enable passengers to self-check in, print boarding passes, and make flight changes.
  • Interline Agreements: Partnerships with other airlines to sell Hawaiian Airlines flights through their distribution channels.
• Indirect Sales:
  • Travel Agencies: Collaborations with travel agents and online booking platforms to provide access to Hawaiian Airlines flights and ancillary services.
  • Corporate Sales: Direct relationships with businesses to negotiate contracts and facilitate bookings for travel management programs.
  • Codeshare Agreements: Partnerships with other airlines to offer connecting flights and joint fare arrangements.
  • Loyalty Programs: HawaiianMiles loyalty program incentivizes customers to book flights, ancillary services, and earn redeemable miles for future travel.

Estimated Annual Sales

The estimated annual sales of Hawaiian Holdings are not publicly disclosed in detail. However, based on available financial data and industry analysis, an approximate estimation is provided below:

• Total Revenue for 2022 (as of Q3 2022): $2.4 billion
• Estimated Annual Sales for 2023: $3.0 - $3.5 billion (projected)

Distribution of Sales by Channel

The distribution of sales by channel is not broken down in the company's financial reports. However, based on industry trends and the company's focus on both direct and indirect sales, it is estimated that:

• Direct Sales: 60-70% of total sales
• Indirect Sales: 30-40% of total sales

Customer Segments of Hawaiian Holdings, Inc.

Hawaiian Holdings, Inc. is the parent company of Hawaiian Airlines, a passenger airline that operates scheduled inter-island and international flights within Hawaii, the Western United States, and the Asia-Pacific region. Hawaiian Airlines targets various customer segments based on their travel needs and preferences.

1. Leisure Travelers (Estimated Annual Sales: $1.5 billion)

• Families: Families traveling for vacations or visiting relatives in Hawaii, the mainland, or international destinations.
• Couples: Couples seeking romantic getaways or honeymoons.
• Individuals: Individuals traveling for personal leisure, including beach vacations, sightseeing, and cultural experiences.

2. Business Travelers (Estimated Annual Sales: $500 million)

• Corporate Executives: Executives traveling for business meetings, conferences, and site visits.
• Government Employees: Government officials and employees traveling on official business.
• Small Business Owners: Owners and employees of small businesses traveling for meetings, exhibitions, and expansion opportunities.

3. Mileage Program Members (Estimated Annual Sales: $200 million)

• Frequent Flyers: Members of HawaiianMiles, the airline's loyalty program, who accumulate miles and redeem them for flights, upgrades, and other benefits.
• Partners: Members of Hawaiian Airlines' partner loyalty programs, including American Airlines' AAdvantage and United Airlines' MileagePlus.

4. Cargo Shippers (Estimated Annual Sales: $100 million)

• Businesses: Companies shipping goods between Hawaii and the mainland, Asia, and other international destinations.
• Individuals: Individuals shipping personal belongings, gifts, or other items.

5. Military Personnel (Estimated Annual Sales: $50 million)

• Active Duty: Military personnel traveling for duty assignments, deployments, and training.
• Veterans: Veterans traveling for medical appointments, reunions, or other personal reasons.
• Military Dependents: Family members of military personnel traveling on official orders or for personal visits.

Estimated Annual Sales:

Based on the estimated percentage of revenue generated from each customer segment, the approximate annual sales for each segment are as follows:

• Leisure Travelers: $1.5 billion
• Business Travelers: $500 million
• Mileage Program Members: $200 million
• Cargo Shippers: $100 million
• Military Personnel: $50 million

It's important to note that these estimates are based on publicly available information and may vary depending on factors such as economic conditions, competitive dynamics, and changes in travel patterns.

Value Proposition of Hawaiian Holdings Company

Hawaiian Holdings, Inc. is the parent company of Hawaiian Airlines, Inc., a leading provider of air transportation services in the Asia-Pacific region. The company's value proposition is based on the following key elements:

1. Strong Brand Recognition:

• Hawaiian Airlines is one of the most recognized and respected airlines in the Asia-Pacific region.
• The company has a long history of providing safe, reliable, and affordable air travel.
• Hawaiian Airlines is known for its friendly and welcoming service, which has earned it a loyal customer base.

2. Extensive Network:

• Hawaiian Airlines operates a comprehensive network of routes that connects the Hawaiian Islands to destinations in the United States, Asia, and Oceania.
• The company's network provides convenient and affordable travel options for both leisure and business travelers.

3. Competitive Pricing:

• Hawaiian Airlines offers competitive pricing on its flights, making it affordable for travelers to explore the Hawaiian Islands and beyond.
• The company also provides a variety of discounts and promotions to help travelers save money on their airfare.

4. Premium Service:

• Hawaiian Airlines provides a premium service that includes comfortable seating, complimentary meals and beverages, and in-flight entertainment.
• The company's flight attendants are known for their friendly and attentive service, which makes flying with Hawaiian Airlines a more enjoyable experience.

5. Strategic Partnerships:

• Hawaiian Airlines has strategic partnerships with a number of major airlines, including American Airlines, Japan Airlines, and Qantas.
• These partnerships allow Hawaiian Airlines to offer its customers a wider range of travel options and benefits.

6. Sustainability:

• Hawaiian Airlines is committed to sustainability and reducing its environmental impact.
• The company has invested in fuel-efficient aircraft and implemented a number of initiatives to reduce its carbon footprint.

Target Market:

Hawaiian Holdings Company's target market includes the following:

• Leisure travelers who are looking for a comfortable and affordable way to explore the Hawaiian Islands and beyond.
• Business travelers who need to travel to Hawaii for work.
• Residents of Hawaii who need to travel to other destinations.
• Cargo shippers who need to transport goods to and from Hawaii.

Competitive Landscape:

Hawaiian Holdings Company competes with a number of other airlines that provide air transportation services in the Asia-Pacific region, including:

• Delta Air Lines
• United Airlines
• American Airlines
• Southwest Airlines
• JetBlue Airways
• Alaska Airlines
• Korean Air
• China Airlines
• Japan Airlines
• ANA Holdings
• Qantas Airways

Risks Associated with Hawaiian Holdings, Inc.

Financial Risks:

• Volatile fuel prices: Hawaiian Holdings is heavily reliant on jet fuel, which accounts for a significant portion of its operating expenses. Fluctuations in fuel prices can impact profitability and cash flow.
• Currency exchange rate fluctuations: The company generates a substantial portion of its revenue from international operations. Changes in exchange rates can affect revenue and expenses.
• Economic downturns: The travel industry is cyclical and susceptible to economic fluctuations. Downturns can lead to decreased demand for flights and lower ticket prices.
• Competition: Hawaiian Holdings faces competition from major airlines, low-cost carriers, and other forms of transportation. Intense competition can squeeze margins and reduce profitability.
• Debt burden: The company has a significant amount of debt outstanding, which increases its financial leverage and exposes it to interest rate risk.

Operational Risks:

• Weather disruptions: Volcanic eruptions, hurricanes, and other weather events can disrupt flight schedules and impact operations.
• Labor relations: Hawaiian Holdings' labor costs are a major expense. Tensions with unions or employee strikes could increase costs or disrupt operations.
• Technological failures: The company relies heavily on technology for reservations, flight operations, and customer service. System failures or cyberattacks could disrupt business and harm reputation.
• Maintenance and regulatory compliance: Aircraft maintenance and regulatory compliance are critical for safety and operational efficiency. Failure to meet these requirements could lead to penalties or grounding of flights.
• Natural disasters: The company's operations are located in Hawaii, which is vulnerable to natural disasters such as earthquakes, tsunamis, and volcanic eruptions. These events could cause disruptions, damage infrastructure, and impact tourism.

Environmental Risks:

• Climate change: The airline industry contributes to greenhouse gas emissions, which can impact the environment and lead to regulation or carbon taxes.
• Sustainable aviation fuels: The availability and cost of sustainable aviation fuels (SAFs) could affect profitability and compliance with environmental regulations.
• Waste management: Hawaiian Holdings generates waste from aircraft operations and other business activities. Improper waste management can damage the environment and impact the company's reputation.

Other Risks:

• Political instability: Political instability in foreign destinations can affect travel demand and pose risks to operations.
• Government regulations: The airline industry is heavily regulated by government agencies. Changes in regulations could impact costs, operations, or profitability.
• Regulatory uncertainty: Uncertainty surrounding future government regulations, such as those related to carbon emissions or labor relations, can create challenges for planning and investment.
• Reputation risk: Negative events such as accidents, customer complaints, or environmental incidents can damage the company's reputation and impact demand for flights.