Q2 KŪPONO WINNERS FINANCIAL & SCORECARD RESULTS HNDAUGUSTRESTART2022 with MovingInclusivityForward
Ha‘aheo, our LGBTQ+ Employee Resource Group, provided important insight supporting this change. “Ha‘aheo, as an ERG, is really delighted with the policy update. Bringing that positive and inclusive environment is exciting for us to see, and I think it allows our employees to make that choice with their uniforms,” said Director of Strategic Talent Leaders and Ha‘aheo Co-chair Chris “WeSalazar.want our employees to feel comfortable and wear a uniform that meets the needs of their jobs and also makes them feel comfortable with who they are,” said Vice President of Airport Operations Jeff Helfrick. “I think this is another example of how Hawaiian Airlines is starting to embrace diversity.”
“This is a living program that we are going to keep working on, and we want to keep having these conversations of inclusivity,” said Senior Director of Brand and Community Alisa Onishi. ■ You can view the updated Uniform Guidelines on HApeople.
On August 1, we modified our Uniform Guidelines to reflect a more gender-fluid approach by removing gender categories from our uniform policy. With this change, we aim to lead with Aloha and step toward inclusion for our transgender, non-binary, or non-conforming
2 Uniform Guidlines Update
“It is going to be more inclusive for everybody, and people who identify as another gender won’t have to worry about complying with a specific gender policy. We can do the best of both worlds,” said Guest Service Agent and Uniform Committee Member Tuiatua Tuiasosopo.
“We wanted to include everyone in these changes. We brought focus groups together to listen to their input and figure out how everyone can feel authentic when coming into work,” said Brand Management Specialist Cassidee Owens.
3 Takaya Talks Travel Restoration
Two of our pre-pandemic routes are not returning anytime soon. What’s happening to Chitose and Fukuoka? Are we in a position to explore other Japan markets? We have received many comments from our customers in Chitose and Fukuoka requesting the resumption of flights, but we believe that the minimum requirement for the resumption of flights in those cities is the removal of arrival passenger caps and predeparture testing requirements. Even through this pandemic, we have reaffirmed that Hawai‘i is a special travel destination for Japanese guests, and we understand that pent-up demand will be strong once the situation improves.
How have the Japan teams been coping with two-and-a-half years of severe border restrictions? For several months after the pandemic began, we were busy dealing with cancellations by groups and individuals who had reservations and tickets in hand. After that, we focused on engaging with the various authorities to stay abreast of the multiple restrictions and requirements, and keeping our Corporate Headquarters updated about the evolving situation in Japan to help prepare an environment in which Japanese guests could travel to Hawai‘i as soon as possible. Our colleagues at the airport were working to operate scheduled flights and U.S. military charters. Since the market is expected to change drastically post pandemic, the Sales team spent this period preparing for all potential scenarios. In addition to all that, we were honored to conduct various Team Kōkua activities including a beach cleanup at Waikiki’s sister beach, Shirarahama Beach in Wakayama Prefecture, and a tour of our A330 aircraft parked at Kansai Airport for children living nearby. Unlike Australia and New Zealand, we could at least operate Japan services during the pandemic. What were we able to do differently? The key difference is that Australia and New Zealand had their borders completely closed. Japan suspended visa-free access to foreigners, but residents and Japanese citizens were still able to travel, even despite the entry restrictions. In addition, the Hawaii Safe Travels program was expanded in November 2020 to include travelers from Japan, which also made a difference. And then, the United States eliminated all pre-departure testing requirements last June. How have we prepared for service restoration? We have been working to strengthen our brand and take various steps to become the airline of choice for our Japanese customers. For example, the in-flight meals departing from Japan are supervised by Executive Chef Otsuka of The Kahala Hotel and Resort Yokohama. We have also launched the Boarding Pass Campaign, in which passengers can receive special offers by presenting their HA boarding passes from Japan to our partner stores in Hawai‘i. And, for a limited time, Yamazaki Baking Co., Ltd, a major bread manufacturer and retailer, partnered with us to launch a Loco Moco and Haupia style lunch pack (white bread with filling) at supermarkets and convenience stores nationwide in Japan. We are also continuing to closely monitor consumer trends and behaviors which indicate a shift to direct sales. We are adapting our sales and distribution strategy to adjust to this evolving environment.
Japan is relaxing border restrictions at a considerably slower pace than many nations and now there are economic pressures. How are these issues affecting demand? While it is true that the weak yen and high fuel surcharges have put a greater burden on customers than they did before the pandemic, we believe that a major factor in customers’ lack of confidence in international travel is their fear that they will not be able to return home if they test positive for COVID-19 before returning. Once the arrival passenger cap and the pre-departure testing requirements are eliminated, we will have greater flexibility to increase our capacity and we are confident that this will result in greater demand for our product.
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After more than two years of pandemic-induced service reductions, we have restored our Haneda service and increased frequencies on our Kansai and Narita routes. Japan Country Director Takaya Shishido has helped us navigate the country’s ever-evolving entry regulations as we welcome back more guests.
Since becoming Material Support Lead, MALIA O’HARA’s charismatic attitude, professionalism, and aloha spirit have made a huge impact to the OGG Maintenance team.
Q2 Kūpono Award Winners
“Malia has a unique way of communicating her expectations, influencing others around her to act in a professional and uplifting manner,” noted Aircraft Mechanic Don Gerber in his nomination. “Her attention to detail and focus on a continuous improvement process, that enhances our parts and equipment supply for our everchanging requirements, goes above and beyond standard operating procedures.”
“ HUNTER PRAYWELL has been one of the best leaders I’ve had the opportunity to work with at HA and beyond,” noted his nominator and former colleague Sara Yamamoto. “He’s a leader who lives our values each and every day.”
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“Diane embodies, lives, and breathes our core values of Mālama, Ho‘okipa, Lōkahi, and Po‘okela,” said Diane’s nominator, Director of IT Field Services John Kim.
As a Senior Executive Assistant, DIANE CROUCH executes her job duties with precision and grace as she supports our Chief Operating Officer, Jon Snook. While that keeps her busy, she can often be found exhibiting our core values in other areas of our Dianecompany.isanactive member of our Sustainability Employee Resource Group (ERG) –consistently coming up with ways our ‘ohana can help protect our precious and fragile natural resources. She frequently takes the lead in motivating our teammates to play their part and works with our Corporate Communications team to help spread the word. As if that isn’t enough, Diane is involved in many of our Team Kōkua initiatives. This past quarter, she spearheaded the “Toiletries for the Troops” campaign that benefited active duty and National Guard personnel who had fallen on hard times. She also helped orchestrate the first ever IT e-waste initiative, donating more than 150 used Microsoft Surface and Dell tablets to assist Hawai‘i keiki in their school work.
Sara recalled how Hunter had enthusiastically taken on two company initiatives that lacked Project Managers, established appropriate teams and processes for each, and shepherded them until permanent PMs came onboard. He has a wealth of experience which he openly shares with anyone who wants to learn more. If a PM is taking on a new project or is about to encounter an especially complex situation, he always makes time to listen and provide guidance. His coaching style often comes down to a phrase he uses: “I have an idea. But I’d love to hear what you think about this.”
Malia and her teammate recently re-organized the OGG Maintenance Supply area to make it more user friendly and reinforced our supply chain to ensure a constant state of readiness. She is known for using her technical and communication skills to support our internal and external customers.
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THOMAS LEISY not only brings a high degree of skill to ongoing needs with HApeople. com, working with our SharePoint vendor to maximize our capabilities through PowerApps, forms, lists and libraries, he carefully thinks through the user experience, comes up with creative user interfaces, considers feedback thoughtfully –often with clever interpretation – and genuinely enjoys solving Someproblems.ofthe applications Thomas has helped develop include: Mahalograms, Alumni Ambassadors, Daily Operational Update, Photo of the Day submissions, as well as the forms to submit nominations for the Kūpono Program. A simple and intuitive user experience on the front end masks the complex work that Thomas has performed in the background to ensure the application works beyond expectations.
Concourse has no Wi-Fi and she needed the Hawaiian Airlines app to access the in-flight entertainment on the A321neo, Chris stepped forward to assist. Ensuring a safe on-time departure takes tremendous effort from our Guest Service Agents, but he wasn’t about to knowingly let a guest board a five-hour flight without anything to watch. Chris took out his personal phone and turned on its hotspot feature to allow the guest access to the Internet and install our app. “It takes only a few minutes to make someone’s day,” noted Senior People Relations Manager and Chris’ nominator, Lianne Villaro, who observed this kind gesture while traveling for business. “With little effort, he went above and beyond the call of duty to make a guest happy.”
Associate IT Analyst
“Thomas is like the Harry Potter of SharePoint – a real wizard,” said his nominator, Director of Internal Communications Christine Strobel. “But it’s his ho’okipa that makes him a standout. He’s always positive and anticipates your needs and acts on them. He exudes aloha and represents IT and Hawaiian Airlines well.” ■
The term “Kūpono” is used to describe someone who stands tall and represents what is right or pono. The Hawaiian Airlines Kūpono Awards Program recognizes individuals who are committed to our company purpose and embody our values on a daily basis. They show Mālama, Ho‘okipa, Lōkahi, and Po‘okela through how they act, lead, and make decisions. They help connect people with aloha by going above and beyond while excelling in their role at Hawaiian.
JON: I’m very thankful for the way our teams managed through this year and, really, since we’ve been building our operation back from near dormancy a few months prior. It’s an incredible thing to go all the way from flying just a fraction of capacity during the statewide travel shutdown to 115% of 2019 North American capacity last quarter. It’s a boomerang. Our on-time performance compared with other airlines continues to be strong and we’re making up ground with our baggage irregularity numbers after a difficult start to the year during the Omicron surge. We need to be extra careful about sticking to our procedures and we’re emphasizing that in our training and safety reviews. It’s good to be on time, but we must always keep the safety of our people, guests, and equipment top of mind.”
We spoke with our Chief Financial Officer Shannon Okinaka and Chief Operating Officer Jon Snook to get their perspectives on how we’re doing at the halfway point of the year following the release of the company’s second quarter results. View the full interview on HApeople.com.
Q2 Operational Capacity (vs. 2019) During the second quarter of 2022, we operated at 87% of our 2019 second quarter system capacity.
SHANNON: Overall, the company is making progress. We have a healthy cash balance and we have begun generating cash from our operations. While we continue to make key investments that will improve the employee and guest experience, such as our Passenger Service System with Amadeus that’s coming next spring and numerous facilities projects, there are still obstacles in returning to sustainable financial health. We’re going to maintain a higher cash balance for now while we continue to ride out persistent areas of market uncertainty, such as fuel prices and a fuller return of the Japanese market. While our domestic business has returned to healthy levels, so has our competitors’ and they’re taking full advantage. They have the size and reach to better capitalize on that domestic rebound. For us, that means we must be laser-focused on our value proposition: Delivering our one-of-a-kind service at every touchpoint.
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115% 80% 31%
It’s been an incredibly busy year as we’ve ramped up operations through a sustained surge in leisure travel demand from North America. And through that, we’ve been trying to balance giving teams what they need to succeed while being judicious about our spending. How would you summarize our recovery progress through the operational and financial lenses?
Q2 2022 Financial Results
We have sharply reduced our losses compared with the first quarter, posting an adjusted net loss of $46.1 million. Strong domestic revenue, as well as the performance of our Premium Cabin and Extra Comfort products, helped offset rising operational costs, primarily due to wages and benefits and airport rent. Such unit costs (those excluding fuel and special items) are up 16% compared with prepandemic 2019. Our overall operating revenue in the second quarter was down 2.9% from second quarter 2019 as our international network slowly rebuilds.
“Strong demand in our domestic markets has been joined by an encouraging recovery from our international gateways,” said President & CEO Peter Ingram. “I am extremely proud of our team and their commitment to deliver an outstanding guest experience.”
NORTH AMERICA NEIGHBOR ISLAND INTERNATIONAL Company Scorecard Update: Q2 2022 We saw solid improvement following the challenges of the first quarter. Our operational, financial, and customer metrics are tracking positively, though we still have ground to make up with baggage irregularity and costs per available seat mile (CASM), which continues to be buffeted by capacity changes. The employee metric will be revealed after we conclude our annual Nā Leo survey, which will measure your familiarity with our company values and whether you see those lived at Hawaiian Airlines. The survey returns in the fall – stay tuned to HApeople for your opportunity to share your feedback. 30%20% 20%30% METRIC ON TARGET? Financial Adjusted EBITDA, 20% CASM ex fuel, special items, 10% Customer CSAT NPS, 20% Employee Nā Leo Survery, Employee Sentiment 20% N/A Operational Relative OTP, 15% Baggage Irregularity, 15% OVERALL SCORE PAYOUT ELIGIBILITY Total Operating Revenue Total Operating Expenses, Less Special Items Adjusted Net Income (Loss) Adjusted Earnings Per Share Q2 2022 ($46.1M)$718.0M$691.9M($0.90) Q2 2021 ($73.8M)$383.3M$410.8M($1.44) Q2 2019 $623.3M$712.2M$58.9M$1.23 Focused on Recovery
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Mike acknowledges that the PSS project comes with a combination of excitement about new capabilities and nerves about the many challenges of implementing and learning a new system. The team is working hard to ensure that there’s more to be excited than nervous about. Mike noted that it’s unlikely that everything will work to perfection immediately; however, it will take collective effort to work through issues.
“Unlike our current platform, Altea is a series of applications that communicate with each other, so it’s important that anything we do on the pricing and inventory side of the house is reflected across all components of the system,” explained Director of International Pricing & Revenue Management Mike Kedzie. “For example, the Altea Inventory product syncs with the rules in Altea Customer Management and Altea Flight Management systems as well as feeds into many external systems. A lot of the business rules need to be configured correctly to ensure that the systems communicate with each other properly and changes in one are reflected in the other. The way that we’ve been doing things for so many years doesn’t always transfer into the Altea platform. We need to completely rethink the way we do some things.”
To get our new passenger service system to work when we go live in April, we must marry what we do with what the system expects. For the Pricing and Revenue Management Teams, that means ensuring our fare rules are correctly reflected in the Amadeus Altea platform and we adjust our processes to deliver that information across its synced systems.
A key part of that process involves consolidating into one tool many business functions that have been fragmented across various departments and applications. For example, Network Planning might have been responsible for some rules, while the Distribution team might have had oversight of others. Compounding the challenge is that our current system has been configured over decades, so at times, our teammates involved in the project are having to dig deep into the rationale behind current processes and system settings. “In many cases, we are having to configure an airline’s technology from scratch,” Mike noted. “The Business Process Testing phase is especially important because it has allowed us to identify some of these issues and find ways to make them work.”
“While so many of us are comfortable with the system that we’ve been using for decades, it’s important to remember that the processes it employs weren’t developed overnight,” he said. “Only a collaborative effort will make this project successful in the long term.”
■ INVENTORYALTEA RESERVATIONS MANAGEMENTFLIGHT MANAGEMENTCUSTOMER PSS Coming Together
EXTERNALSYSTEMS
Our team of interns recently volunteered at Maunalua Bay where they removed invasive algae (limu) to allow native species to thrive once again. Led by local non-profit organization Mālama Maunalua, they removed 540 pounds of limu. The State of Hawai‘i has declared 2022 “The Year of the Limu,” so we were especially thrilled to contribute to this project.
No nā i‘a noho i ka lae kahakai o lākou ke ‘ai i ka limu, a inā e pau ka limu i ke moku ‘ia i mea hānai i ka pua‘a pehea e loa‘a ai ka ‘ai ka For those fish that reside near the shore, limu is their diet, and if the limu is taken and just fed to the pigs, then how will the Pēlā nō inā e hele kekahi po‘e e ki‘i i ka ‘ulu a hā‘awi na ka pua‘a, a pehea ihola ho‘i ka ‘ōpū o ke kanaka. The same could be said if someone gathered breadfruit and gave it to the pigs, then humans Malia paha ua maopopo nō i kēia kanaka kāna mea i hana ai a malia ua ‘ike maka nō i ka mea i hana ‘ia, a ‘o ia nō kona mea i ho‘okomo ai i ka pila i wahi e koe ai ka limu. Ua lilo nō ho‘i ka hana lawai‘a i mea le‘ale‘a i kekahi po‘e i kēia manawa. Inā e pau ka limu pehea e loa‘a ai ka i‘a pehea ho‘i e loa‘a ai ka mea ho‘ohala manawa a kekahi po‘e i ka hele ‘ana i ka lawai‘a a ho‘opau moloā. It would seem this person knew what they were doing and witnessed these trespasses, and that’s why they added this bill so that some limu could be saved. Fishing is a favored pastime. If the limu disappears, how will there be fish to catch, and those who like fishing will have nothing to do
Communications@HawaiianAir.com.
The Year of the Limu I kīnohi o ka mahina nei i naue nui aku ai nā hu‘ea‘o o kākou ma ka Hui Mokulele ‘o Hawaiian nei i ke awa o Maunalua e hana kaiāulu ai. ‘O kā lākou hana o ka lā, ‘o ka ‘ohi limu noho hewa i hiki i nā limu kama‘āina ke ulu hou ma Maunalua. Ma lalo kā mākou hana o ka malu o Mālama Maunalua, he ‘oihana kū i ka ‘auhau ‘ole, i lawelawe ai i ka hana a ua huki ‘ia he 540 paona o ka limu noho hewa. Ua kūkala ‘ia kēia makahiki ‘o ia ka makahiki o ka limu ma ke kānāwai o Hawai‘i nei, no laila, ua nui ko mākou hau‘oli i ke kāko‘o i ia pāhana o kākou. Eia ma lalo nei he mo‘olelo mai loko mai o ka nūpepa kahiko (Lā 17 o Malaki 1939, Ka Hoku o Hawaii), e hō‘ike ana i ka mana‘o o kekahi ka‘aka no Hawai‘i mai e pili ana i ke kānāwai o ia wā, ‘o ia ho‘i ua pāpā ‘ia ka ‘ohi limu Hawai‘i ‘ana no ka hānai wale ‘ana i nā hānaiahūhū a i ‘ole no ke kū‘ai ‘ana aku paha. E ho‘oheno kākou i ka limu Hawai‘i.
Anei?HawawaHe—1939May173,NumberXXXIV,VolumeHawaii,oHokuKa
Below is a Hawaiian language newspaper article from the March 17, 1939 edition of Ka Hoku o Hawaii that shares a citizen’s thoughts on banning limu harvesting for commercial use and People are not different from fish: we can not live without food, and neither can fish. If there is no limu, what will fish eat? Perhaps some will say that large fish do not eat limu. That is true as large fish live in the deep oceans, but their food source is different.
