Hawaiian spends $15m on turboprops

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Hawaiian Airlines will spend $15 million to buy two ATR 42 turboprops during the fourth quarter, as the airline moves to fill the gaps in its inter-island route network.

The Honolulu-based carrier is buying the first aircraft from ASL Aviation Group. It is registration N801HC (MSN 629) and previously flew for CSA Czech Airlines under registration OK-JFL, according to Flightglobal's Ascend Online database.

"The new turboprop operation will complete our Hawaii product offering and cement our position as the flight carrier of our island home," says Mark Dunkerley, chief executive of Hawaiian, during an earnings call on 23 October. The airline plans to launch flights to Moloka'i and Lana'i with the aircraft in the second half of 2013.

The turboprops will bring Hawaiian into direct competition with Island Air, which recently leased five ATR 42s and three ATR 72s, Mesa's Go!, Mokulele Airlines and Pacific Wings on thinner routes within the Hawaiian islands.

Asked why Hawaiian did not opt to sign a feeder agreement with an established regional carrier, for example SkyWest Airlines or Republic Airways, Dunkerley says: "It's an aircraft type, [that's] not broadly represented amongst some of the very carriers that you were talking about and given the small nature of the operation and the fact that ATR 42s aren't actually pick on the ground in the US that kind of leads us into acquiring the use of those aircraft."

The carrier says that it could acquire up to six turboprops over the medium term.

Hawaiian's capital expenditure is anticipated to increase to be between $380 million to $390 million for the year, says Scott Topping, chief financial officer of the carrier. This is up from previous guidance due to the turboprop deal.

Fourth quarter capital expenditure is expected to be between $55 million and $60 million, he says.

Hawaiian had $433.5 million in unrestricted cash and cash equivalents and $674 million in outstanding debt and capital lease obligations at the end of September. This is down from $446.6 million in cash and $686.8 million in debt three months earlier.