Hawaiian Holdings, Inc.

Greetings and welcome to the Hawaiian Holidays Third Quarter 2023 Financial Results Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Marcie Moretta, Managing Director, Investor Relations. Please go ahead.

Thank you, Ryan. Hello, everyone, and welcome to Hawaiian Holdings' third quarter 2023 results conference call. Here with me in Honolulu are Peter Ingram, President and Chief Executive Officer, Brent Overbeek, Chief Revenue Officer, and Shannon Okinaka, Chief Financial Officer. We also have several other members of our management team in attendance for the Q&A. Peter will provide an overview of our performance, Brett will discuss revenue, and Shannon will discuss cost and the balance sheet. At the end of the prepared remarks, we will open the call up for questions. By now, everyone should have access to the press release that went out at about 4 o'clock Eastern time today. If you have not received the release, it is available on the Best of Relations page on our website, hawaiianairlines.com. During our call today, we referred at times to adjusted or non-GAAP numbers and metrics. A detailed reconciliation of GAAP to non-GAAP numbers and metrics can be found at the end of today's press release posted on the Investor Relations page of our website. As a reminder, the following prepared remarks contain forward-looking statements, include statements about our future plans and potential future financial and operating performance. Management may also make additional forward-looking statements in response to your questions. These statements are subject to risk and uncertainties and do not guarantee future performance, and therefore, undue reliance should not be placed upon them. We refer you to the Hawaiian Holdings' recent filings with the SEC for a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statement. These include the most recent annual report filed in Form 10-K, as well as subsequent reports filed on Forms 10-Q and 8-K. I will now turn the call over to Peter.

Mahalo, Marcie. Aloha, everyone, and thank you for joining us today. I want to start off by thanking our dedicated and compassionate team members who continue to deliver outstanding hospitality to our guests in an ever-changing external environment. This quarter, as tragic wildfires destroyed parts of Maui, my colleagues once again rose to the occasion and answered the call for our guests and the communities we serve. And even as we face more than our fair share of challenges, our team remains focused on important initiatives that make us a better airline, including the debut of Amazon freighter flights early this month, the unveiling of our 787 interiors, and the successful first of type installation of Starlink Wi-Fi on an A321 aircraft. I'll talk more in a few moments about each of these initiatives. Before that, I'll delve a bit more deeply into the events in Maui. While today we will necessarily address the economic consequences, we must not lose sight of the enormous human cost of the tragedy. We're a Pai'nik community, and everybody at Hawaiian knows someone whose life was touched by this tragedy. For the first three days following the fires, we had a very focused mission with three essential elements. As the largest provider of passenger transportation to the islands, we took the lead in the evacuation of displaced visitors and residents and getting first responders to where they needed to be. We made sure that we supported our team on the ground in Maui Airport with whatever resources they needed. And we confirmed that each of our 500 plus teammates who live or work on Maui was safe. Each of these objectives was achieved in the 72 hours following the fires, and we continue to support what will be a long recovery for the community through charitable giving and the volunteer activities of our team. In the immediate aftermath of the tragedy, new bookings to Maui slowed to a trickle, and we saw large volumes of close-in cancellations for Maui trips. A portion of this close-in business shifted to other islands, notably Kauai. Booking trends stabilized in the weeks that followed, and cancellations have abated. But it will be a while yet before demand fully returns to the robust levels we saw earlier in the summer. Load factors, both on our North America and neighbor island flights to and from Maui, remain below typical levels, but are improving. October will be better than September, which had a low point in load factors. And the trajectory we're seeing is encouraging. In the current environment, accommodations inventory has not been a constraint. Rather, it has been the hesitation of travelers about coming to Maui in the wake of the fires. It is important to note that almost all of West Maui's hotels were physically unaffected by the fire and the phased reopening of properties nearest to the wildfire area began earlier this month. Yesterday, Maui County announced that this phased reopening will be extended to all of the key West Maui resort areas on November 1st. On September 5th, we updated our guidance to incorporate the impact from the wildfires to revenue for what we knew at the time. And later in this call, Brent will provide more details on the current outlook. The other significant near-term challenge we've been navigating is the availability of our A321 fleet. Just before our last quarterly call, we learned of new inspection requirements for the Pratt & Whitney engines that power these aircraft. The impact, as understood at the time, was incorporated in our September 5th investor update. Since then, in addition to receiving more details about inspection requirements beyond the end of this year, we have also seen a number of engine removals not associated with the powder metal inspection issued. These removals contributed to an elevated cancellation rate in the early days of the current quarter. We currently have two aircraft grounded, which is an improvement over the earlier part of this month, and expect to have between two and four aircraft out of service at any point in time over the next few months. In response to the most recent engine removals, we have adjusted our schedules to accommodate up to four out of service aircraft through 4Q, and into the beginning of next year. We expect the situation for 2024 will improve as our engine inventory will be bolstered by the return of several engines that are already in the MRO pipeline. We have reached terms with Pratt & Whitney on short-term compensation for their failure to provide required engine spares over the course of the past several months, but this interim agreement will expire later this quarter. We're in ongoing discussions with Pratt on further compensation beyond the scope of this short-term agreement, and most importantly, to provide more certainty about engine availability so that we can plan more effectively for the medium and long term. After some external challenges to reliability in the first half of the year, our on-time performance steadily improved from July to August to September. The latest published DOT report for July showed us reclaiming the number one spot in the industry on time performance. And I expect our August and September results to be at or near to the top of the pack. In October, as I noted earlier, we have experienced a bout of cancellations primarily driven by the A321 fleet. That underscores the importance of getting more certainty about the availability of engines. We are encouraged by the improved performance in the third quarter and will not be satisfied until we are once again consistently at the top of the industry for operational performance. I'll now touch on a few highlights of our commercial performance that Brent will address in more detail. Up until the wildfires on Maui, our revenue was tracking ahead of the expectations we had entering the quarter. With particular strength, from the U.S. mainland to Hawaii. Sydney and Inchon continue to produce strong results. International performance was not materially affected by the Maui wildfires. On the neighbor island front, we continue to comprehensively outperform Southwest by wide margins in terms of load factor and unit revenue. These facts reinforce our conviction that the way we take care of our guests and deliver authentic Hawaiian hospitality makes us the clear carrier of choice for travel between the islands. In Japan, the encouraging trends we noted during last quarter's call continued through the summer. Since May, we have seen a sustained recovery of Japan point of sale bookings on top of the ongoing high level of U.S. point of sale demand. In the coming quarters, we'll see an increase in supply in the Japan to Hawaii market as relief from use it or lose it requirements for slots and route authorities expire at the end of this month. We'll need to see continued recovery in Japan point of sale demand to keep pace with this increasing supply. But the trend is encouraging and certainly a welcome change from where things stood at the beginning of the year. We also aren't slowing down on our execution of initiatives as we take important projects across the finish line and achieve major milestones on others. On October 2nd, we flew our first A330-300 freighter revenue flight from Cincinnati to San Bernardino. As a reminder, this is the beginning of a contractual relationship that envisions initial growth to a 10 aircraft fleet in the months ahead. The first flight this month was a significant milestone as we embark on this new venture to provide important diversified growth for our business. Continuing on a positive note, we announced the initial route deployments for our new Boeing 787 Dreamliner. The aircraft will debut on our April 15th flight from Honolulu to San Francisco before transitioning to flights between Honolulu and Los Angeles, as well as Maui and Los Angeles in May. We have firm orders for 12 787 scheduled between early next year and 2027. We also have several A330 passenger aircraft leases ending in this timeframe, giving us options to balance growth and replacement. We're excited to get this fleet in the air next year. It's not only the vehicle of growth for our passenger business for the next few years, but the larger 34 seat premium cabin allows us to expand this high performing margin enhancing element of the business. Earlier this month, we completed the installation of Starlink connectivity on an A321. The installation and testing was successful, and we are currently completing the FAA solidification process before installing the technology on the rest of the A321 fleet. We'll go through the same process with the A330 fleet next year. As a reminder, We're the first major airline to deploy this product, and it will be the fastest, most capable Wi-Fi available. Our award-winning hospitality already makes us the preferred carrier in the markets we serve. Complementing this with an unparalleled Wi-Fi experience will further set the Hawaiian experience apart and grow our revenue premium. I'm immensely proud of what our team is accomplishing and the dedication of our employees. They're aloha for one another, and their unmatched hospitality they extend to our guests and the communities we serve will ensure Hawaiian success in the years ahead. In a few weeks, we will celebrate 94 years of service to Hawaii. As I reflect on this 94th year, which has had its share of challenges, I know that all of those challenges, whether engine issues or market issues or otherwise, are near term and transient. the core strength of our brand and business model, and the effect of the major investments we are making now will be durable and create value into the future. Now let me turn it over to Brent to go over our commercial performance and outlook in more detail. Thank you, Peter.