In the news release, Hawaiian Holdings Reports 2009 Second Quarter Financial Results, issued 27-Jul-2009 by Hawaiian Holdings, Inc. over PR Newswire, we are advised by the Company that in the 'Nonoperating Income (Expense)' section of Table 1, the line item 'Capitalized interest' should read 'Unrealized loss on securities.' The second sentence of the fifth paragraph, originally transmitted as 'The total shares purchased under the program were 217,390.' should read, 'The total shares purchased under the program were 201,651.' The complete, corrected release follows:

Hawaiian Holdings Reports 2009 Second Quarter Financial Results

- Net income of $27.5 million, or $0.53 per diluted share

- Operating income of $31.7 million, compared to $48.5 million in the second quarter of 2008, which included the benefit of a $52.5 million litigation settlement

- Operating revenue decreased 8.5% to $292.0 million

- Unrestricted cash, cash equivalents and short-term investments of $282.6 million at June 30, 2009

HONOLULU, July 27 /PRNewswire-FirstCall/ -- Hawaiian Holdings, Inc. (Nasdaq: HA) ("Holdings" or the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported consolidated net income for the three months ended June 30, 2009 of $27.5 million, or $0.53 per diluted share, on total operating revenue of $292.0 million. This result compares to $54.3 million, or $1.09 per diluted share, on total operating revenue of $319.2 for the three months ended June 30, 2008. The Company's operating income of $31.7 million for the three months ended June 30, 2009 compares to $48.5 million in the prior year period which included the benefit of a $52.5 million litigation settlement.

"Our second quarter results reflect another period of good financial performance for our Company in an extremely challenging macro environment," commented Mark Dunkerley, the Company's president and chief executive officer. "The core influences on our financial performance are the same as those facing our competitors - much lower fuel prices than last year offset by much lower demand resulting from the recession. Unlike most of our competitors, we have been able to strengthen our balance sheet over the course of the last six months. With the credit markets in turmoil, and recognizing that we have a number of substantial outlays in the next few years, this comparative strength is of tremendous importance.

"Higher fuel prices and lower fares suggest that the period ahead will be even more challenging, so this good start to the year is vital.

"Hawaiian's employees both in the front line and in support roles deliver a level of service to our customers that is the envy of the industry. Everything we do to position Hawaiian well for the challenges that lie ahead is for naught without the support of our employees and we are immensely fortunate to have such a wonderful team," concluded Mr. Dunkerley.

Additionally, the Company announced today that the Board of Directors determined to terminate the Company's previously announced stock purchase program in light of the substantial increase in the Company's stock price since the program was initiated in March 2009. The total shares purchased under the program were 201,651.

Second Quarter Financial Results

The Company reported operating income of $31.7 million in the second quarter of 2009 compared to $48.5 million in the prior year period, which included the benefit of a $52.5 million litigation settlement.

Second quarter 2009 operating revenue was $292.0 million, an 8.5% decrease compared to the second quarter of 2008. Capacity for the quarter increased 1.8% year-over-year to 2.4 billion available seat miles (ASMs), resulting in RASM of 11.99 cents, down 10.2% from 13.35 cents in the second quarter a year ago. Second quarter load factor decreased to 84.2% from 85.1% in the same period a year ago. Passenger yield (passenger revenue per revenue passenger mile) decreased 13.8% to 12.51 cents from 14.51 cents in the second quarter of 2008. Selected Statistical Data is included in Table 2 below.

Excluding the litigation settlement received in the prior year period, total operating expenses for the second quarter of 2009 decreased 19.5% year-over-year to $260.3 million. This resulted in an operating cost per available seat mile (CASM) of 10.69 cents, down 20.9% versus the same period a year ago excluding the litigation settlement. Excluding fuel and the prior year litigation settlement, second quarter CASM increased 1.1% to 8.45 cents versus 8.36 cents for the same period a year ago. A reconciliation of non-GAAP financial measures and the litigation settlement in the prior year period is included in Table 5.

Aircraft fuel costs decreased 55.7% year-over-year in the second quarter to $54.7 million and represented 21.0% of operating expenses. Hawaiian's average cost per gallon of jet fuel decreased 56.1% year-over-year in the second quarter to $1.59 (including taxes and delivery), while block hours increased 6.2%, primarily reflecting increased 717 operations. The financial impact of hedging activities is included in non-operating income/expenses, and as such is not reflected in fuel expense. Non-operating expenses reflect $6.5 million in net gains from Hawaiian's fuel hedging activity.

Hawaiian believes that economic fuel expense is the best measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period. Hawaiian defines economic fuel expense as GAAP fuel expense plus (gains)/losses realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period. For the three months ended June 30, 2009, economic fuel expense was $54.9 million ($1.60 per gallon), compared to $115.0 million ($3.38 per gallon) in the year earlier period. An analysis of economic fuel expense for the three months ended June 30, 2009 and 2008 is included in Table 3.

Hawaiian's year-over-year increase in Other Rentals and Landing Fees of $4.8 million reflects both the increase in its interisland operations and rate increases associated primarily with airports in the state of Hawaii. Aircraft rent increased $4.8 million compared to the second quarter of 2008 primarily as a result of the recognition of supplemental rent expenses for certain maintenance deposits paid to aircraft lessors. Commissions and Other Selling Expenses declined year-over-year by $3.9 million primarily as a result of a reduction in certain revenue-variable expenses including credit card processing fees.

Second quarter 2009 non-operating income totaled $5.6 million, compared with non-operating income of $5.9 million in the second quarter of 2008. During the current year period the Company recognized non-operating income totaling $6.5 million related to fuel hedging activities compared to non-operating income of $8.9 million during the prior year period. During the second quarter of 2009, fuel hedging expenses include $0.2 million of realized losses on derivative contracts settling in the quarter, the reversal of $3.2 million of previously recorded losses on these same contracts, and $3.5 million in unrealized gains related to fuel derivative contracts settling in future periods.

Liquidity, Capital Resources and Fuel Hedging

• As of June 30, 2009 the Company had:
  • Unrestricted cash, cash equivalents and short-term investments of $282.6 million, and $31.9 million in restricted cash.
  • $85.7 million outstanding under two term loan facilities, $104.3 million outstanding under floating rate notes issued in conjunction with the acquisition of three Boeing 767-300 ER aircraft in December 2006, and additional notes payable of $29.6 million.
  • $46.2 million of Capital Lease obligations primarily associated with four 717-200 aircraft.
• A summary of the Company's fuel derivatives contracts as of July 24, 2009 is included as Table 4.
  

Company Highlights

• Hawaiian was ranked as the nation's #1 carrier for on-time performance and second for fewest misplaced bags as reported by the U.S. Department of Transportation's (DOT) Air Travel Consumer Report for the months of April and May. Hawaiian has posted the nation's leading on-time performance numbers for seven consecutive months.
• In May, Hawaiian Airlines and Korean Airlines announced a newly-expanded code-sharing agreement that will allow Hawaiian to offer its customers nonstop service between Hawaii and Korea, as well as connecting service on flights within Korea and five other destinations in Asia.
• In celebration of its 80th anniversary of service in Hawaii, Hawaiian Airlines announced a $150,000 gift to Bishop Museum in May in support of its enduring mission to preserve the heritage and culture of Hawaii.