How Hawaiian Airlines flew in the black

Hawaiian Airlines made a $7 million profit in 2007, on revenue that grew 11% to $983 million. That's only one dollar profit on every 140 dollars of revenue, but still. With a fare war bleeding all profit and then some from interisland service, and jet fuel bills soaring, the amazing thing that Hawaiian didn't end the year in the red. This breakdown of 2007 revenue (with 2006 revenue for comparison) shows that the lion's share of the revenue came from Hawaiian's regular long-haul service to the mainland:

• Passengers: $889 million. ($797 million.)
• Cargo: $31 million. ($32 million.)
• Charter: $12 million. ($10 million.)
• Other: $51 million. ($50 million.)

This breakdown of 2007 costs (with 2006 costs for comparison) shows that the fuel bill is now one third bigger than payroll:

• Wages/benefits: $222 million. ($228 million.)
• Fuel and lubrication bills: $292 million. ($242 million.)
• Aircraft rent: $98 million. ($110 million.)
• Maintenance and materials: $93 million. ($70 million.)
• Jet and passenger servicing: $54 million. ($53 million.)
• Commissions and sales costs: $54 million. ($49 million.)
• Depreciation/amortization: $46 million. ($29 million.)
• Landing fees/other rentals: $28 million. ($26 million.)

Hawaiian CEO Mark Dunkerley says it's gotten really hard to fly profitably and the key is to target even the smallest incremental cost adjustments. By adding capacity and selling most of the extra seats, Hawaiian brought its fourth quarter operating cost per available seat mile down 1.5% from year-before levels -- 13.4% if you leave out jet fuel, which Dunkerley would dearly love to do. (Inventors: get cracking on a wind-powered jet.) Hawaiian's jet fuel costs are running 45% higher than last year and account for more than a third of all its expenses. Buying three jets about a year ago led to lower aircraft rent costs and higher depreciation costs. This is interesting: a favorable adjustment to workers comp liabilities cut a few million dollars from expenses. Repeat after me, bean counters everywhere: "Safety first!"