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October 25 2010 October 25, 2010 Hawaiian Airlines Investor Day

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  • 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.

  • The Hawaiian Airlines Story

    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

  • The Hawaiian Airlines Story

    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

  • The Hawaiian Airlines Story

    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

  • The Hawaiian Airlines Story

    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

  • The Hawaiian Airlines Story

    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

  • The Hawaiian Airlines Story

    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

  • The Hawaiian Airlines Story

    …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%

    HA CO US/HP AS DL/NW UA AA

    Source:Form 41

  • The Hawaiian Airlines Story

    Growing fast and profitable

    30% ASM Growth 2009 Over 2005

    ‐10%0%10%20%30%

    ‐20%

    HA CO US/HP AS DL/NW UA AA

    Operating Margin 2005 and 2009

    ‐3%

    2%

    7%+7.4

    ‐0.9 +4.3

    +7.3

    +6.9

    +2.9

    ‐4 1‐8%

    HA CO US/HP AS DL/NW UA AA

    4.1

    Sources:Form 41 and Companies’ 10-K

  • The Hawaiian Airlines Story

    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

  • The Hawaiian Airlines Story

    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

  • The Hawaiian Airlines Story

    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 scheduleStrongest 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

  • The Hawaiian Airlines Story

    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 Growth Plan

    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

  • 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 Growth Plan

    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

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

    InterislandHawaii 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 Growth Plan

    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

  • Hawaiian Airlines Growth Plan

    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

  • Hawaiian Airlines Growth Plan

    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

  • Hawaiian Airlines Growth Plan

    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

    3 Years with Hawaiian

    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

    25 Years with Hawaiian

    Previous Experience:

    Chief Financial Officer

    5 Years with Hawaiian

    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

    2 Years with Hawaiian

    Previous Experience:

    & Chief InformationOfficer

    5 Years with Hawaiian

    Previous Experience:

    Human Resources

    5 Years with Hawaiian

    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

    3 Years with Hawaiian

    Previous Experience:• Hawaii Business

    44 Years with Hawaiian

    Previous Experience:• Hawaiian Airlines• Mid-Pacific Air