Hawaiian Q3 PRASM guidance worsens

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Hawaiian Airlines anticipates that passenger unit revenue will decrease by between 5.2% and 6.2% in the third quarter compared to a year earlier, due to competitive pricing on certain routes.

The Honolulu-based carrier previously anticipated that passenger revenue per available seat mile (PRASM) would decrease by between 1.5% and 4.5% during the period. It has warned investors that lower than expected yields, especially on routes between Hawaii and North America, are driving the lower unit revenue guidance since early September.

Low-cost carrier Allegiant Air and Alaska Airlines have both added new routes and frequencies to Hawaii in recent months, increasing capacity between the US mainland and the islands.

Cost per available seat mile excluding fuel is expected to drop by 6.3% to 7.3% during the third quarter, which is an improvement from the 2% to 5% drop in prior guidance. Hawaiian attributes the improvement to a decreased load factor, lower than expected maintenance expenses and revenue-driven expense savings.

Capacity is anticipated to increase by 28% and the load factor decrease by 1.9 percentage points to 85.2% during the three months that ended 30 September.