Hawaiian Holdings (NASDAQ: HA) shares plunged Friday after the parent company of Hawaiian Airlines warned Thursday that foreign exchange rates and lower fuel surcharges would hit a key revenue figure.
The carrier said Q1 operating revenue per available seat mile (RASM) would fall 3.5% to 6.5% vs. a year ago, after climbing 6.1% in Q4.
"The U.S. dollar is stronger and fuel surcharges on some of our international routes will be substantially lower," COO Peter Ingram said on a conference call Thursday. "These two items alone combine for a 3-percentage-point reduction in RASM performance for the system in the first quarter."
Shares sank 26% to 19.70 on the stock market today, falling below its 50-day line and hitting a two-month low.
Fuel surcharges, which are added to tickets in South Korea and Japan and help boost profit, will likely be near zero next quarter as oil prices fall.
Oil is now down 60% since June. But some airlines, including Hawaiian, haven't been able to see the full benefit of lower prices due to hedging contracts.
The airline paid $2.84 per gallon of fuel in Q4, lower than a year ago, but still well above the $2.52 per gallon that American Airlines (NASDAQ: AAL), which doesn't hedge, paid.
American shares fell 3% to 50.68.
The stronger dollar hit Hawaiian's tickets to Asian customers, but it said demand for travel to Hawaii is still strong and that it would add flights. But analysts worry a quick jump in capacity could sink fares and hit profit.
The carrier reported an 82% jump in earnings to 40 cents per share, in line with analyst estimates. Revenue rose 2.6% to $574.84 million, slightly above views for $574.08 million.
Last week, United Continental (NYSE: UAL), Southwest Airlines (NYSE: LUV) and Delta Air Lines (NYSE: DAL) all reported strong Q4 results, helped by lower oil prices.
But shares of all three were down over 2% on Friday.
Follow Gillian Rich on Twitter: @IBD_GRich.
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