Download - Hawaiian Airlines Investor Day · Hawaiian Airlines Investor Day. ... OECD & SERI (Samsung Economic Research Institute) Hawaii Tourism Asia (HTA), 2011 ATMP. ... Hotel Hoyt Zia Senior

October 25 2010October 25, 2010

Hawaiian AirlinesInvestor Day

Safe Harbor Agreement

The following information contains certain forward-looking statements that reflect theCompany’s current views with respect to certain current and future events and financialperformance, including but not limited to the Company’s operating and competitiveperformance, including but not limited to the Company s operating and competitiveenvironments, economic conditions, transpacific capacity and the Company’s business focus.These forward-looking statements are and will be, as the case may be, subject to manyrisks, uncertainties and factors relating to the Company’s operations and businessenvironment, which may cause the Company’s actual results to be materially different fromany future results, expressed or implied, in these forward-looking statements. Theserisks, uncertainties and factors include, but are not limited to, the price and availability ofaviation fuel, competitive advantages held by network carriers in the transpacificmarket, economic conditions in the United States and abroad and increased competition inth k t i hi h th C t Th C d t k bli ti tthe markets in which the Company operates. The Company undertakes no obligation topublicly update or revise any forward-looking statements to reflect events or circumstancesthat may arise after the date hereof even if experience or future changes make it clear thatany projected results expressed or implied therein will not be realized. Additionalinformation on risk factors that could potentially affect the Company’s operations andinformation on risk factors that could potentially affect the Company s operations andfinancial results may be found in the Company’s Annual Report on Form 10-K for the fiscalyear ended December 31, 2009, and other filings with the Securities and ExchangeCommission.

Mark DunkerleyP id t & CEOPresident & CEO

SEATTLEPORTLANDSACRAMENTOOAKLANDSAN FRANCISCOSAN JOSESEOUL

HAWAI‘I

LAS VEGASLOS ANGELES

PHOENIXSAN DIEGO

SAN JOSE

TOKYO

HAWAI‘I

MANILA

PAPEETE

PAGO PAGO

SYDNEY

Today’s AgendaToday s Agenda

Hawaiian Airlines’ Vision Mark Dunkerleyy

Operations Overview Charles Nardello

Network and Marketing Strategy Avi MannisNetwork and Marketing Strategy Avi Mannis

- 15 Minute Break -

Brand Overview Blaine Miyasato

Finance and Fleet Peter IngramFinance and Fleet Peter Ingram

- Questions and Answers -

The Hawaiian Airlines Story

HA emerges from bankruptcy paying 100 cents on the dollar (March 2003 – June 2005)

• Even share of Interisland capacity

• Fractured Transpacific market

• Distribution in transition

• Thinly capitalized

• 100% leased fleet

• Modest cash balance Hawaiian Airlines, Inc. will emerge from bankruptcy today, with creditors

Hawaiian Airlines, Inc. will emerge from bankruptcy today, with creditors

Hawaiian Airlines, Inc. will emerge from bankruptcy today, with creditors y,receiving 100% of the value of their claims, most of them in cash.

y,receiving 100% of the value of their claims, most of them in cash.

y,receiving 100% of the value of their claims, most of them in cash.


Executing the strategy (2005 – 2010)

• Best brand in marketplaceBest brand in marketplace

• Industry-leading operational excellence

• Rapid focused growth with financial stabilityRapid, focused growth with financial stability


Best brand in marketplace

Lik lih d R d90%

60%

80%

Likelihood to Recommend

60%

30%

55%44%

57%

37%44%

20%20%

Very Good %

Source:Consumer research (Qmark), 2009


Operational excellence

U.S. DOT metric leader• # 1 for on-time performance for (2004 – 2009, Jan – Aug 2010)• Consistently ranked high in cancellations, baggage handling and

oversales

Industry-recognized service and quality• Conde Nast• Travel & Leisure• Travel & Leisure


Fastest growing legacy airline…

20%

30%ASM Growth 2009 Over 2005

0%

10%

20%

‐20%

‐10%

0%

20%

HA CO US/HP AS DL/NW UA AA

Source:Companies’ 10-K


…and the most profitable legacy airline

8%

10%Operating Margin 2005 and 2009

0%

2%

4%

6%

+7.4

4 3

+7.3+2.9

‐8%

‐6%

‐4%

‐2% ‐0.9 +4.3

+6.9 ‐4.1

8%


Source:Form 41


Growing fast and profitable

30% ASM Growth 2009 Over 2005

‐10%0%10%20%30%

‐20%


Operating Margin 2005 and 2009

‐3%

2%

7%+7.4

‐0.9 +4.3

+7.3

+6.9

+2.9

‐4 1‐8%


4.1

Sources:Form 41 and Companies’ 10-K


Poised for growth and profitability (2010)

• Built the best brand in the industryBuilt the best brand in the industry

• Climbed to the summit of operational performance

• Strengthened our balance sheet revenue base and cost baseStrengthened our balance sheet, revenue base and cost base

• Expanding our fleet…and began renewal

• Starting the next phase of our Asian expansion strategy• Starting the next phase of our Asian expansion strategy


Transpacific seat share

20102005 2010 (Total Seats = 10.7M)2005 (Total Seats = 10.9M)

7%8%

2% 2%

10%4% 7%7%

21%28%

15%

13%12%

4%

8%10%

28%28%25%

AQ DL HA NW TZUA AA NA CO

AS DL HA UAAA CO US

Note:Transpacific is defined as the existing HA market

Source:apgDat (Schedule)

Transpacific is defined as the existing HA market on the U.S. West Coast (CA, OR, AZ, NV, WA)

Transpacific

#1 carrier west coastto Hawaii

• Largest seat share

• Most Mainland to Hawaii gateways (10)gateways (10)

• 58% of passenger revenue (YE September 2010)

Higher industry capacityin 2010in 2010

• Remains 12% below 2006/2007 peak


Interisland seat share

20102005 2010 (Total Seats = 8M)2005 (Total Seats = 10M)

5%2%

11%

48%

11%

47%87%

Hawaiian Aloha Island Air Hawaiian Island Air go! Mokulele

Source:apgDat (Schedule)

Interisland

Unmatched presence• Over 85% seat share

(YTD 2010)

• Unrivaled schedule

Strongest competiti e • Strongest competitive position

• 33% of passenger revenue(YE September 2010)

Strong revenue rebound in 2010

International

Building a strong franchise with discipline

• 2004 - Sydney

• 2008 – Manila

• 2010 – Tokyo (Haneda)• 2010 – Tokyo (Haneda)

• 2011 – Seoul/Incheon

Asia / South Pacific accounts for 9% of revenue (YE Sept 2010)(YE Sept 2010)

Hawaiian Airlines Growth

Our next 5-year plan

Passenger revenue growth• Expansion into untapped visitor markets

C it di i li i t k t• Capacity discipline in mature core markets

Other revenue improvement• Exploit new cargo capabilities (fleet, systems, network)p g p ( , y , )• Tap non-ticket revenue opportunities of leisure-based

customers

Cost competitivenessCost competitiveness• Sourcing• Productivity• Fleet advantage


5-year strategy – grow profitably

C i T d B C

12,000,000

16,000,000

+ 277%

Capacity Trend Base Case

8,000,000

ASM

s (0

00)

+ 13%

0

4,000,000+ 13%

0%

2010 2015

Interisland Hawaii to Western U.S. Int'l/New N. America

Hawaiian Airlines Growth Plan

Building upon success (2010 - 2015)

• Leverages economies of scaleLeverages economies of scale

• Protects shareholder investment through diversification

• Grows where the market is growing – take advantage of Grows where the market is growing take advantage of

geography


Hawaiian Airlines’ cost per passenger, 2005 - 2009

20%

25%

30%

35%

5%

10%

15%

20%

‐10%

‐5%

0%

AS DL US AA UA CO HA

Note:T l O i E ( F l) P 2009 2005Source:Form 41

Total Operating Expense (ex Fuel) per Passenger – 2009 over 2005






geography


Growing outside our traditional markets will diversifythe airline

2015 Passenger Revenue Mix2010 Passenger Revenue Mix

32%

10%24%28%32%

10%

58% 47%58%

InterislandHawaii to Western U.S.Int'l/New N. America








geography


Building the momentum – growth strategy (2011 – 2015)

Citi ithCiti ithPer capita income

($)GDP (2000 $B)

Population (M)

Cities with pop. > 1M

Cities with pop. > 1M and non‐stop air service

to Hawaii

2008 CAGR 2008 CAGR 2008

Per capita income ($)

GDP (2000 $B)Population

(M)Cities with pop. > 1M

Cities with pop. > 1M and non‐stop air service

to Hawaii

2008 CAGR 2008 CAGR 20082008 CAGR 2008 CAGR 2008Australia 40,240 9% 522 3% 21 5 2China 2,940 15% 2,603 10% 1,325 44 0Hong Kong 31,420 2% 241 5% 7 1 0Indonesia 1,880 16% 247 5% 227 9 0Japan 38 130 1% 5 166 1% 128 12 4

2008 CAGR 2008 CAGR 2008Australia 40,240 9% 522 3% 21 5 2China 2,940 15% 2,603 10% 1,325 44 0Hong Kong 31,420 2% 241 5% 7 1 0Indonesia 1,880 16% 247 5% 227 9 0Japan 38 130 1% 5 166 1% 128 12 4Japan 38,130 1% 5,166 1% 128 12 4Korea, Rep. 21,530 10% 751 4% 49 8 1Malaysia 7,250 10% 139 5% 27 3 0New Zealand 27,830 10% 64 3% 4 1 1Philippines 1,890 8% 111 5% 90 2 1Si 34 760 5% 135 5% 5 1 0

Japan 38,130 1% 5,166 1% 128 12 4Korea, Rep. 21,530 10% 751 4% 49 8 1Malaysia 7,250 10% 139 5% 27 3 0New Zealand 27,830 10% 64 3% 4 1 1Philippines 1,890 8% 111 5% 90 2 1Si 34 760 5% 135 5% 5 1 0Singapore 34,760 5% 135 5% 5 1 0Thailand 3,670 8% 178 5% 67 1 0Vietnam 890 11% 56 8% 86 3 0

United States 47,930 4% 11,514 2% 304 37 16

Singapore 34,760 5% 135 5% 5 1 0Thailand 3,670 8% 178 5% 67 1 0Vietnam 890 11% 56 8% 86 3 0

United States 47,930 4% 11,514 2% 304 37 16

Note: Growth rates shown are compounded annual growth, 2003-2008Source: World Bank world development indicators


Asia to lead in world traffic by 2028

R P K (billi )0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Asia 2008 Traffic 2009-2028 Growth

Revenue Passenger Kms (billions)

North America

Europe

Latin America

Middle East

Africa

CIS

Source:Airbus


Travel to Hawaii from Japan –

• Arrivals trending up in 2010 from 2009, while capacity is trending down

• “Hawaii continues to be the most desired overseas destination for the 13th consecutive year”destination for the 13 consecutive year

– JTB Report, 2010

Source:Hawaii Tourism Japan (HTA), 2011 ATMP


Travel to Hawaii from other Asian countries –

Korea• GDP growth forecast of 4%

and 4 5% for 2010 and

China• GDP growth forecasted 10%

for 2010 and 2011and 4.5% for 2010 and 2011, respectively

• Visitors to Hawaii up 97% in

for 2010 and 2011

• Visitors to Hawaii up 47.6% in 2010 f 15% h i • Visitors to Hawaii up 97% in

1H2010; forecast 85% for full year 2010

2010; forecast 15% growth in 2011

• Forecast 17% increase in visitors to Hawaii in 2011

Sources:OECD & SERI (Samsung Economic Research Institute)Hawaii Tourism Asia (HTA), 2011 ATMP

Our Focus On Hawaii Gives Us The Opportunity To Grow Profitablypp y y

Air Passenger Forecasts - % Change 2010 – 2013

North North AmericaAmerica

+4%+4%

North North AmericaAmerica

+4%+4%Asia/Asia/Asia/Asia/HawaiiHawaiiHawaiiHawaii

PacificPacific+22%+22%

PacificPacific+22%+22%

HawaiiHawaiiHawaiiHawaii

Source:Air4casts – region forecast 2010 - 2013

Today’s Presenters

Charles NardelloSenior Vice-President,Operations

Avi MannisVice-President,Revenue Management & Operations

6 Years with Hawaiian

Revenue Management & Schedule Planning


Previous Experience:• US Airways• United States Air Force

Previous Experience:• Boston Consulting Group• Christie’s Auction House

Blaine MiyasatoVice-President,Product Development

Peter IngramExecutive Vice-President &Chief Financial OfficerProduct Development


Previous Experience:

Chief Financial Officer


Previous Experience:• Hawaiian Airlines • American Airlines/

American Eagle

Hawaiian Airlines SeniorManagement Team

Al HoffmanSenior Vice-President,

g

David OsborneExecutive Vice-President

Barbara FalveySenior Vice-President,

Corporate Communications



& Chief InformationOfficer



Human Resources


Previous Experience:p• KHON• Communications

Pacific

ev ous pe e ce:• Bank of New York

p• Ameristar Casino &

Hotel

Hoyt ZiaSenior Vice-President,General Counsel &Corporate Secretary

Glenn TaniguchiSenior Vice-President,Marketing and Sales


Previous Experience:• Hawaii Business


Previous Experience:• Hawaiian Airlines• Mid-Pacific Air

Download - Hawaiian Airlines Investor Day · Hawaiian Airlines Investor Day. ... OECD & SERI (Samsung Economic Research Institute) Hawaii Tourism Asia (HTA), 2011 ATMP. ... Hotel Hoyt Zia Senior

Top Related