Hawaiian Holdings: Surviving the turmoil

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The airline industry has been among the hardest hit by spiraling oil prices, as carriers scramble to make ends meet by raising fares and levying special fees on passengers. The recent retreat of oil prices has prompted a corresponding rebound in airline stocks, and has helped support small-cap stocks in general.

Hawaiian Holdings, Inc. (Nasdaq:HA), which owns Hawaiian Airlines, stands to gain from both these trends, plus it has some silver lining of its own in the clouds over the airline industry.

At the beginning of the second quarter, Hawaiian Airlines saw its two main competitors, Aloha Airlines and ATA Airlines, both cease operations, more or less from one day to the next. Aloha had 40% of Hawaii’s inter-island traffic and Aloha and ATA together close to 20% of the traffic with the U.S. west coast.

Then at the end of April, a third competitor, Mesa Air Group (Nasdaq:MESA), ended some acrimonious litigation with Hawaiian, agreeing to pay $52.5 million to settle Hawaiian’s claims that Mesa had used confidential passenger information – obtained when it looked into investing in Hawaiian during bankruptcy proceedings – to launch its own Hawaiian business in 2006. (It didn’t help Mesa’s case when it came out that its chief financial officer had solicited information from an acquaintance about how to delete e-mails permanently from the hard drive...

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