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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 22, 1999
HAWAIIAN AIRLINES, INC.
(Exact name of registrant as specified in its charter)
HAWAII 1-8836 99-0042880
(State or other jurisdiction (Commission file number) (I.R.S. employer
of incorporation) identification number)
3375 KOAPAKA STREET, SUITE G350
HONOLULU, HAWAII 96819-1869 96819-1869
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (808) 835-3700
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ITEM 5. OTHER EVENTS.
On September 22, 1999, Hawaiian Airlines, Inc. issued the following press
release:
HAWAIIAN AIRLINES TO PURCHASE UP TO
20 NEW BOEING 717-200S
NEW INTERISLAND FLEET TO SAVE $200 MILLION IN CASH OPERATING COSTS
OVER 10 YEARS -
HONOLULU, HI In a historic agreement that will bring the
world's newest, most advanced short-haul commercial passenger jet to
Hawaii, Hawaiian Airlines, Inc. (AMEX and PCX: HA) and Boeing
Commercial Airplanes, Inc. (NYSE: BA) announced today that Hawaiian
has signed a letter of intent to purchase up to 20 Boeing 717-200
aircraft, with a firm order valued at more than $430 million for 13
planes, to replace its current interisland fleet. Hawaiian will take
delivery of the 13 new aircraft in 2001.
The 717s will be 25 percent more fuel-efficient and cost far less
to maintain than the company's current DC-9 fleet. As a result,
Hawaiian expects to save $200 million in cash operating expenses over
the first 10 years of their operation. Cost per available seat mile
(ASM) of the 717, including ownership, will be 1.5 cents per ASM
better than that of the DC-9 in 2002, the company's first full year of
operating the "next generation" aircraft. Based upon Hawaiian's
expected flight schedule in 2002, this translates to a $15 million
improvement in that year's pretax earnings.
The new fleet of highly fuel-efficient, environmentally friendly
and Stage 3 compliant Boeing 717s will be phased in during 2001,
replacing Hawaiian's current interisland fleet of McDonnell Douglas
DC-9 aircraft. In addition to substantially reducing operating costs,
the 717s' ability to fly with greater frequency than the DC-9s will
generate increased revenues and productivity by allowing Hawaiian to
expand its flight schedule between the Hawaiian Islands.
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In addition, the 717 has the same Type Rating as the DC-9, which
will make Hawaiian's maintenance and crew training transition much
easier than changing to a completely new aircraft type.
John W. Adams, Chairman of the Board of Hawaiian Airlines, called
the announcement a milestone in the company's 70-year history and a
reflection of Hawaiian's financial health.
"This may be the largest investment ever made in the Hawaii
interisland air travel market," he said. "It caps three years of
measured growth at Hawaiian and reflects a balance sheet strong enough
to acquire a fleet of state-of-the-art aircraft that will carry our
passengers safely, comfortably and efficiently into the 21st
Century."
Adams said the company has secured financing through Boeing for
the initial acquisition of 13 aircraft and that the multimillion-dollar
investment underscores the company's commitment to its core business
providing frequent, affordable interisland transportation in Hawaii.
"These new planes make a statement for Hawaiian that says we
steadfastly believe in the interisland market, the Hawaii economy, the
future of tourism and our own corporate strength," Adams said.
Paul J. Casey, Hawaiian's President and Chief Executive Officer,
praised Hawaiian's 3,000 employees for their contribution to the
airline's success. "This purchase reflects the partnership that exists
between our owners, employees and management to continue to enhance
Hawaiian Airlines as an invaluable asset for Hawaii. We are
determined to take interisland travel to a whole new level of customer
satisfaction.
"Seventy years ago, our company ushered in a new era in Hawaii
with the introduction of interisland air travel. Just as our
eight-passenger Sikorsky amphibians were state-of-the-art in 1929, our new
717s will be the most advanced aircraft flying in Hawaii.
"The 717 is quieter and more reliable than any other aircraft in
its class. It's got the widest aisles and seats and the largest
overhead storage bins. It's also
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the most environmentally friendly, with far lower emissions than any
comparable aircraft.
"It's the plane everyone will want to fly," he said.
Hawaiian's 717s will seat eight passengers in First Class and 115
in Coach.
The higher productivity of the 717 will allow Hawaiian to
expand its interisland flight schedule to accommodate increasing
passenger feed from the company's successful code share agreements
with American, Continental and Northwest Airlines, and from Hawaiian's
own expanded West Coast operations, Casey said.
Twin BMW Rolls-Royce BR715 engines make the 717 quieter on the
outside and inside than other planes in its class. The 717-200 not
only meets federal Stage 3 noise requirements, it in fact meets
proposed Stage 4 criteria expected to be required in future years.
The 717-200's noise levels for takeoff and approach are rated
significantly lower than any other interisland jet aircraft in
operation.
In addition, the 717's BR715 engines generate emissions that are
60 percent below federal standards.
The agreement with Boeing culminates an intensive, two-year
analysis of potential replacement aircraft to succeed the DC-9, which
has a proven track record in the industry for durability in short-haul
markets.
Doug Groseclose, Boeing Commercial Airplanes Group vice president
- South Asia/Pacific, Africa and Middle East Sales, said, "The 717 is
an ideal aircraft for Hawaiian Airlines. We're thrilled that the
airline has shown confidence in this airplane and in partnering with
Boeing. And, given the operating capabilities of this airplane and
Hawaiian's unique and demanding requirements, we expect the 717 to
deliver superior results. The acquisition of the 717 is a great way
to celebrate 70 years of doing business."
First introduced in 1995 as the MD-95, the Boeing 717 is
McDonnell Douglas' successor to the DC-9 series. Though similar in
size and shape to the
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DC-9-50, the 717-200 features "next-generation" technology, from its
"glass cockpit" flight deck to its advanced aerodynamics that contribute
to greater fuel efficiency. The design of the aircraft also allows easier
passenger loading, cargo loading and fueling than its predecessors.
Founded in 1929, Hawaiian Airlines launched the first commercial
airline service in the Islands and later introduced the first jets in
interisland service more than 30 years ago. From its Honolulu hub,
Hawaiian serves the Islands of Maui, Kauai, Lanai, Molokai and the Big
Island of Hawaii. The nation's 12th largest carrier, Hawaiian also
operates a fleet of 12 McDonnell Douglas DC-10 widebody aircraft on 14
flights a day between Hawaii and the U.S. mainland. Its DC-10 South
Pacific service links Honolulu with American Samoa and Tahiti.
Hawaiian Airlines has earned numerous international awards for
service in recent years and most recently was rated third in Travel &
Leisure magazine's 1999 ranking of the Top 10 Domestic Airlines.
Additional information on Hawaiian Airlines, including previously
issued company news releases, is available via the airline's Web site
at WWW.HAWAIIANAIR.COM.
EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS
DISCUSSED IN THIS NEWS RELEASE CONTAIN FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING
STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT
ARE NOT LIMITED TO, THE EFFECT OF CHANGING ECONOMIC CONDITIONS, TRENDS
IN THE AIRLINE INDUSTRY, THE ABILITY TO CONTROL COSTS AND EXPENSES,
AND OTHER RISKS DETAILED IN THE COMPANY'S CONTINUING REPORTS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION.
The world's largest producer of commercial jetliners, Boeing
Commercial Airplanes Group maintains its leadership with intense focus
on customers and their requirement for products and services that
deliver the highest value. Only Boeing offers 23 airplane models to
serve every passenger market from 100 seats to nearly 600 seats, as
well as the most complete line of cargo freighters.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HAWAIIAN AIRLINES, INC.
Dated: September 22, 1999 By /s/ John L. Garibaldi
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John L. Garibaldi
Executive Vice President
and Chief Financial Officer
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