Hawaiian Airlines posts profit; so do Delta, US Airways

HONOLULU, ATLANTA and PHOENIX (HawaiiNewsNow) – Hawaiian Airlines, Delta Air Lines and US Airways are all posting profits for the first quarter, despite each one being squeezed by soaring jet fuel bills.

Rapidly expanding Hawaiian Airlines reported a $7 million profit on $435 million revenue. Revenue grew 19 percent but fuel costs rose 28 percent and accounted for a third of all expenses. Hawaiian said fuel hedging produced part of the profit, though without it the airline would still have made about $3 million.

Delta Air Lines, the world's second largest air carrier after the combined operations of United and Continental, posted Wednesday a $124 million Q1 profit, citing fuel hedging but also noting that revenue per passenger mile was running 8 percent better than last year. Delta has kept capacity below year-before levels both to control fuel use and support higher fares.

US Airways said Wednesday it lost money flying in the first quarter but made money on a landing rights trade with Delta, affecting gates in New York and Washington D.C., leading to net income of $48 million.

Fuel hedging is a form of gambling, where buyer and seller lock in a price well in advance of actual consumption, each one guessing at what spot market prices will be at that time. When  hedging is successful from the airline's point of view, it pays less for the fuel than it would have paid without hedging.

Hawaiian's profit may be the most impressive, since it was achieving while adding service to new cities, with significant start-up costs. Hawaiian has hired more than 400 employees including hundreds of flight attendants and more than 50 pilots during the past year or so.

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