Hawaiian Airlines' earnings soar, but don't expect lower fares - Hawaii News Now - KGMB and KHNL

Hawaiian Airlines' earnings soar, but don't expect lower fares

HONOLULU (HawaiiNewsNow) -

Hawaiian Airlines posted record fourth quarter profits thanks to plunging fuel prices. But some interisland passengers said the airline should pass on its savings in the form of lower fares.

The state's largest carrier today reported net income of $37.9 million or 66 cents per share, a 41.4 percent jump from the year-earlier quarter. Hawaiian said its fuel costs tumbled from $150.8 million in fourth quarter 2014 to $88.4 million in the latest three-month period.

"Our fourth quarter results finished off a great year for Hawaiian," said Mark Dunkerley, Hawaiian's CEO. "Looking forward, our outlook is for these positive trends to continue ... giving us a measure of confidence that 2016 will be an even better year for our business."

Interisland passengers, who pay up to $250 round-trip, believe the company should pass on some its good fortune. They believe fares are too high for flights that last less than an hour.

"It's very expensive. The Hawaiian prices to the mainland I think are quite reasonable. But interisland is a lot," said Nancy Fritzen of Haiku.

Emerson Amorin of Lihue said passenger feel stuck paying high prices since there's little competition in the interisland market.

"We came out here for a funeral this weekend. No matter what the prices were, we had to pay," he said. "It's actually cheaper to fly to the mainland sometimes with the prices."

But the airline experts said record profits and lower fuel costs don't translate into lower fares.

"Seldom if ever do airlines lower their fares because of fuel price decreases. What they do is lower their prices because they have too many empty seats or because competitive pressures are going to cause them to have too many empty seats," said aviation industry historian Peter Forman.

Hawaiian said it used most of the windfall to pay down its debt, which soared from about $189 million in 2010 to about $1 billion today. Much of that debt was used to finance Hawaiian's expansion of its Airbus A330-200 fleet.

"You can think of it in many ways like we took out a massive mortgage, or better said 22 massive mortgages, and we've used the cash we've earned during this period to start paying those off and restore our balance sheet to position us better for the future," said Peter Ingram, Hawaiian's chief commercial officer.

Although unpopular with consumers, the move was applauded by Wall Street. The company's stock rose 73 cents today.

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