Hawaiian Holdings Stock Plunges 45% in a Month: Here's Why
Shares of Hawaiian Holdings, Inc. HA, the parent company of Hawaiian Airlines, have plunged 44.6% compared with the industry’s 35.6% decline in the past month. Hawaiian Airlines, like most other airline stocks, has been hit hard by the sharp drop in air-travel demand due to the coronavirus outbreak that has resulted in depreciation.
COVID-19 Woes Dent Growth
Due to the coronavirus-induced sharp drop in air-travel demand, Hawaiian Airlines withdrew its first-quarter 2020 and full-year guidance.
Moreover, the airlines trimmed its schedule for Neighbor Islands from Mar 25. This was in response to the quarantine order (effective Mar 26) from the Hawaii government asking travelers, who enter the state, to undergo a mandatory self-imposed quarantine of 14 days. The carrier will, however, continue to operate a network, essential for customers traveling within the state and the Hawaiian Islands.
Thanks to travel restrictions and evaporating demand, the carrier extended its inter-island cargo services to facilitate movement of certain essentials including food and medicine. With passenger revenues dwindling, Hawaiian Airlines’ focus on offering cargo charter services are expected to boost the top line.
With increase in COVID-19 cases and government restrictions, Hawaiian Airlines reduced its flight schedule nearly by 40% in April. Notably, other carriers are also resorting to significant capacity cuts, due to the above-mentioned factors. For instance, Copa Holdings CPA suspended all its operations effective Mar 22 through Apr 21. It became the first Latin American carrier to enforce such a strict action against the outbreak.
Additionally, JetBlue Airways Corp. JBLU will carry out a large number of flight cancelations this week and operate a schedule less than 50% its normal. The airline expects to cut flights even more in the coming month. Meanwhile, United Airlines’ UAL international schedule will be reduced by approximately 90% in April.
Zacks Rank
Hawaiian Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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