Question-and-Answer Session
Operator
Thank you. We will now begin the question-and-answer session. (Operator instructions) One moment please for our first question. And our fist question comes from the line of Bob McAdoo with Avondale Partners. Please go ahead.
Bob McAdoo – Avondale Partners
Hi, guys.
Peter Ingram
Hello.
Bob McAdoo – Avondale Partners
Can you give me an easy way to think about the fact that – if I’m reading this right, the RASM growth in the second quarter, excuse me, in this recent quarter, was less than the RASM growth in the prior – in the second quarter. Is there an easy was to think about why that happened? What was going on? I think when we’ve talked in the past that a lot of the tickets in that April, May, June quarter had already been sold when the competitors disappeared. Maybe I’m not reading this right, but it certainly looks like your RASM actually didn’t grow as much in this most recent quarter.
Mark Dunkerley
I think what happened in the third quarter relative to the second quarter is that our load factor – I don’t think it was so much a yield phenomenon as it was a load phenomenon. And as we’ve mentioned in our prepared comments just a little while ago, the combination of high fuel prices that led to high fares and high hotel costs in Hawaii had a dampening effect in the middle of the summer on overall demand that hit Hawaii. As I’ve said, looking forward, I think, both the effects of high fuel prices and the effects of high hotel prices, again, to be mitigated substantially, which is a good thing because we have to contend with the effects of the economic turmoil we see at the moment. But that the main reason why there was a difference between the second quarter and the third quarter.
Peter Ingram
And just to echo that a little, Bob. I think if you look at the yield numbers are generally better if you compare year-over-year. If you look year-over-year third quarter compared to year-over-year second quarter, you see a higher yield. And that’s reflective of the fact that we sold more of those tickets in the more recent environment. But as Mark said, that is offset on the load factor side, particularly in Transpac. And you’ll remember, in April and May on Transpac in the immediate aftermath of the shutdown, we were pretty much chalk of block full on just about every flight as people had already committed to vacations. And we’re re-accommodating at the last minute on whatever seat is available.
- To read the full transcript on Seeking Alpha, click here »
