Shares of Hawaiian Holdings (NASDAQ: HA) have been stuck in a downtrend for nearly three years, falling from a high above $60 in late 2016 to around $25 recently. Rising fuel prices and nonfuel unit cost inflation began to put pressure on the airline's profitability in 2017 and 2018. Increased competition in the West Coast-Hawaii market and on interisland flights within Hawaii have inflicted further pain since the beginning of last year.
Hawaiian Airlines suffered another blow last week, as the Department of Transportation tentatively rejected its request for antitrust immunity for its planned joint venture with Japan Airlines (JAL). However, investors received some much better news this week, as Hawaiian raised its third-quarter forecast.
Over the past decade or so, international joint ventures with antitrust immunity have become a widespread feature of the U.S. airline industry. Numerous pairs (or larger groups) of carriers have convinced federal regulators that by coordinating scheduling and pricing, they can offer more efficient and more frequent service on international routes. The DOT believes that in many cases, granting antitrust immunity can lead to lower fares on average by promoting capacity growth, even though the joint venture partners are no longer competing against one another.