Hawaiian Airlines May Traffic Rises, Q2 RASM View Increased

Hawaiian Airlines, the wholly owned subsidiary of Hawaiian Holdings (NASDAQ:HA) , posted a impressive traffic results for May. Traffic- measured in Revenue Passenger Miles or RPMs – climbed 8% to around 1.37 billion in May 2017. Meanwhile, Available Seat Miles (ASMs: a measure of capacity) expanded 5% to 1.58 billion.

Load factor (the percentage of seats filled by passengers) increased 240 basis points (bps) to 86.7% in May 2017 as traffic growth outpaced capacity expansion. The carrier further said it attracted 966,179 passengers on its flights during the month, thereby representing a 5.1% year-over-year increase.

On a year-to-date basis, Hawaiian Airlines witnessed a 7.5% rise in RPMs to approximately 6.5 billion. Also, ASMs improved 4.1% to 7.61 billion. As a result, the load factor increased 270 bps to 84.8%. Passenger count in the first five months of 2017 grew 3.2%.

Apart from releasing its traffic report, the carrier raised its second quarter projection pertaining to operating revenue per ASM (RASM: a key measure of unit revenue) due to better-than-expected yields mainly in the domestic network among other factors. The company now expects this key metric to grow in the band of 7.5% to 10.5% (earlier projection had called for a rise in the range of 5.5% to 8.5%). The bullish RASM view pleased investors. As a result, the stock gained in after-market trading on Jun 6.

Additionally, fuel cost per gallon (economic) is now projected in the band of $1.6-$1.7 (earlier range was tuned at $1.65–$1.75) in the second quarter of 2017.

Price Performance

Shares of Hawaiian Holdings have performed well so far in the current quarter, outperforming the Zacks categorized Transportation- Airline industry. The stock has appreciated 13.8% so far in the second quarter, above the industry’s gain of 10.3%.

Zacks Rank & Other Stocks to Consider

Hawaiian Holdings sports a Zacks Rank #1 (Strong Buy). Investors interested in airline space may also consider other top-ranked stocks like United Continental Holdings (NYSE:UAL) , Deutsche Lufthansa (OTC:DLAKY) and Ryanair Holdings (NASDAQ:RYAAY) . All three flaunt the same bullish rank as the Hawaiian company. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Lufthansa, Ryanair and United Continental have expanded 61.6%, 30.7% and 11.5% respectively, on a year-to-date basis.

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