Hawaiian Holdings, Inc.

Greetings. Welcome to the Hawaiian Holdings, Inc. Fourth Quarter and Full Year 2023 Financial Results Call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I'll now turn the conference over to your host, Marci Morita. You may begin.

Thank you, Shamali. Hello, everyone, and welcome to Hawaiian Holdings' Fourth Quarter and Full Year 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, Brent 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 investor relations page of our website, hawaiianairlines.com. During our call today, we refer 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, including statements about our future plans and potential future financial operating performance. Management may also make additional forward-looking statements in response to your questions. These statements are subject to risk uncertainties and do not guarantee future performance, and therefore, undue reliance should not be placed upon them. We refer you to Hawaiian Florida's recent filings of 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 on 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. While 2023 certainly had its challenges, we accomplished an extraordinary amount, including the realization of foundational investments in the business. I want to give a big mahalo to all our team members. Through their dedication, compassion, and hard work, We continue to deliver to our guests the hospitality that is the hallmark of our brand. We wrapped up the year with FAA approval of Starlink on the A321 and are kicking off 2024 by taking delivery of our first 787 in the next few days. I'll talk more about each of these milestones in a few moments. Before that, I want to touch on the merger announced at the end of the year. We've provided exhaustive detail on this topic in public filing, so we're not going to dwell on it on this call. On December 3rd, we announced that we'll be joining Alaska Airlines in a new kind of combination for the U.S. industry, becoming a single airline with two distinct brands. We are confident that this combination is the best way to help us meet the needs of Hawaii and the other communities we serve. We strongly believe that this merger is pro-consumer and pro-competitive. Over the next several months, as we proceed through the regulatory review process, we're staying focused on the task at hand, running an outstanding airline and advancing our priorities, which are delivering industry-leading operational performance and enhancing the guest experience, fully integrating recent investments into our business, focusing on long-term financial sustainability, and taking care of the people and places we serve. We have immense confidence that we can compete on our own, but the acquisition by Alaska is an even better outcome for consumers, employees, and the communities of our home state of Hawaii. I'll go over a few highlights of our 2023 results and 2024 outlook, on which Brent and Shannon will expand in more detail. On last quarter's call, we spoke extensively about the impact of the Maui wildfires. In spite of this tragic event and the ensuing reduction in travel to Maui, our total revenue for 2023 was up year over year due to the strength in our non-Maui domestic markets and the continuing recovery of international travel to Hawaii. The return of visitors to Maui remained steady and consistent with our expectations, which is important. Maui is not only our second largest hub, but it is home to many of our employees, and we remain committed to supporting the island and its residents in the ongoing recovery. On the U.S. mainland to Hawaii network, revenue performance from our non-Maui routes remains solid. Our international markets ex-Japan continue to perform well. in spite of unfavorable exchange rates for visitors to the U.S. In particular, our flight to Incheon has been producing strong results. Japan traffic is improving, albeit more gradually than we would like. As we mentioned on our last call, there's been a snapback of industry capacity in the Japan-Hawaii market as slot usage requirements were reinstated, and that has taken load factors off the highs recorded in August. On the neighbor island front, we continue to see overwhelming consumer preference for our brand over Southwest, as indicated by our substantially higher load factor and RASM. We faced a number of challenges outside of our control in 2023 that affected our on-time performance, which we know is incredibly important to our guests. With many of those issues, like the Honolulu runway closure now behind us, we're focusing on getting back to our traditional place as the industry's on-time performance leader. I'm proud that we were back at number one for on-time performance for July, August, and September, and ended the year at 83.5% for the busy month of December. Although we're not immune to additional challenges, we're moving into a period of relative stability. This includes A321 NEO engine supply, which we expect to improve by the middle of the second quarter when we get back engines that have been undergoing overhaul. This adds to my confidence that we are going to be able to consistently provide the high standard of operational performance that our guests expect. As we kick off 2024, we're delivering on several very important initiatives and integrating them into everyday practice. We're deploying technology enhancements for our guests using the capabilities of our new Amadeus PSS. We received FAA approval of the Starlink system on the A321 in December and are working with SpaceX to complete the installation across our A321 fleet. The industry's best Wi-Fi connectivity will be available for our guests very soon. Our plan is to finish deployment across the A321 fleet by early in 2Q, and work is also underway to prepare for the expansion of this service to our A330s. And we're excited about receiving our first 787, which is scheduled for delivery in a few days. In about three months, we'll be welcoming guests aboard this aircraft with the operation of our first commercial 787 flight. We faced enormous external pressure in 2023 with Honolulu runway closures, Pratt & Whitney engine inspections, the Maui wildfires, intense competition in our core markets, and through it all, accomplished a lot. Our employees remain focused on caring for our guests and representing our brand as only they can with authentic hospitality and aloha. What we have not done yet is return to consistent profitability. And we will not be satisfied until we accomplish this goal as well. I'm confident that 2024 will be a year of further progress towards sustained profitability as the significant investments we've made in the business begin to deliver results. We will mark an important anniversary this year, celebrating 95 years of continuous service as Hawaii's airline. We are confident in the core strength of our brand and business model, believe that our investments will make us an even stronger airline. Let me now turn it over to Brent to go over our commercial performance and outlook in more detail.