Peter Ingram: Yes. Hi Dan. So, I would hesitate to use the term in the rearview mirror because clearly, there still is a global shortage of engines. I think what you’re seeing reflected in our fleet is a number of our aircraft had gone into the overhaul shop over the course of the last couple of years. And in fact, we bore the brunt of lack of A321 spare engine availability earlier in 2023, even before the powder metal problems forced a lot of inspections in the summer of last year. And so having taken some of that pain in 2023, we’re now seeing engines returning from the overhaul shop, and that has left us at Hawaiian in a relatively more enviable position than some other carriers that are — have dealt with the aftermath of engines that have had to go in for inspections a little bit later.
I will caution it’s a fluid situation. Some of the removals we can — we anticipate and we do anticipate and we have planned engine replacements for those. We know we’ve got some more engines coming back from the overhaul shop over the course of this year. But there is always the risk of an unexpected engine renewal, something that’s not in our plans that we have to account for as well. So, we’ll continue to monitor that going forward. In terms of the impact on our business, I mean, candidly, it has been challenging to deal with. We’ve had A330s deployed in — on routes that we would prefer to fly an A321 based on the level of underlying demand and that has produced a higher level of cost on those routes that is not offset by the commensurate revenue you would expect because the market is just not deep enough to absorb that.
We have underutilized some of our crew as we’ve had available crew to be able to fly 18 A321s. And if time hasn’t been flying 14 or 15 or 16 depending on what was available. So, I think all of that accrues to a benefit for us going forward if we can keep the full fleet operational.
Dan McKenzie: I see, okay. I guess we just going with that is just the path back to normalized margins and the returns that you’re targeting this next cycle. And I guess, if you just look at the key sources of revenue, so ramping up to 10 aircraft with Amazon 2025. I think ancillary upsell from NDC, you’ve got network adjustments with Starlink. Are those enough to offset the weaknesses from Inter Island, Japan and Maui, I guess? And if not, can you think — help us think about what has to happen to get back to profitability? Just going back to the script and the confidence that you guys are taking the right steps to get there?
Peter Ingram: Yes, I mean I’m confident we are taking the right steps. I think getting past the investment phase on some of the big initiatives we’ve had, like the 787 as we’re now getting into flying the aircraft and generating revenue from it like the freighter operation where we are beginning to get the aircraft in that drive the revenue, drive the flying that will make us more productive with the pilots that we have trained, and the investments that we have made preparing for that. All of those things are going to help us. We do certainly need some help from the operating environment. But even there, we’ve got some things that are moving in a positive direction. Brent talked this quarter and last quarter about some of the improvements in the Neighbor Island revenue environment.
We’ve consistently been winning competitively, but now we’re winning competitively in an improving revenue environment. I wouldn’t say it’s where we expect it to be for the long-term, but it certainly has moved in the right direction. I would say the one environmental factor that is probably even a bigger wildcard right now is Japan, where we’re disappointed where how the revenue performance has flattened out a little bit in that market. And I really think we’re well beyond the point where the Japanese travelers weren’t willing to venture out internationally. I think it is more a case of pure economics right now, where the yen at something between ¥154 and ¥155 to the dollar today is just really depreciated against the dollar, and it makes it more expensive for visitors originating in Japan to travel to the United States.
But I’m confident we’re moving in the right direction. I really think a lot of those things are starting to pay off. I don’t have a specific forecast. I’m not going to try and look into the crystal ball and tell you what the timing is of returning to profitability. But I’m really confident that we are moving a lot of things in the right direction and some of the investments and initiatives we have made over the last couple of years are starting to take hold.
Dan McKenzie: Okay, good. Thanks for the time you guys.
Peter Ingram: Thanks Dan.
Operator: Thank you. And our next question comes from the line of Chris Stathoulopoulos with Susquehanna International. Please proceed with your question.
Chris Stathoulopoulos: Thanks for taking my question. So, Peter, I appreciate all the color around your thoughts on getting back to sustained profitability. But if we could dig into the revenue environment here, put a finer point or tie what is four or five sort of outlook. So, on the U.S. piece, I think you said point-of-sale strong. If you could speak to perhaps how much of summer is booked at this point and how that fares versus typical seasonality? And then color on your other international POS markets, New Zealand, Australia, South Korea. And then on the premium contribution from the 787, should we think of that as more of a 2025 benefit or kind of a late 2024 benefit? Thank you.
