How Is Hawaiian Holdings Likely To Grow In The Next 2 Years?

Hawaiian Holdings (NASDAQ: HA) has seen consistent growth in recent years, as its revenue grew at around 8% annually between 2015-2017. However, its stock price has not mirrored its string of strong performances, and instead declined by 30% in 2017 largely due to the news regarding an increase in United Continental’s Hawaii capacity and competition from the expected entry of Southwest Airlines into the region. Looking ahead, strong trends in Passenger yield in both domestic and international markets, expansion into international markets, coupled with its good performance in the cargo market, should help the carrier continue its solid growth in the near term, though Southwest does post a threat.

We expect Hawaiian Holdings’ revenue to grow at around 5% annually over the next two years. We have created an interactive dashboard which shows our forecasts and estimates; you can modify the key value drivers to see how they impact the company’s revenues.

Hawaiian Holdings Segment Revenue Growth

Passenger revenue is derived from three major geographic locations: approximately 53% comes from flights between the U.S. mainland and Hawaii, 22% comes from flights within Hawaii, and approximately 25% comes from International routes. Passenger revenues have grown at 8% annually, driven by 4% annual growth in available seat miles (ASM), 3% annual growth in load factor, and 2% passenger yield. We expect the ASM, load factor, and passenger yield trends to remain favorable in the domestic and international market, driven by a strong performance in the domestic market and expansion in the Asian markets over the next two years.