S&P ups Hawaiian Holdings

Standard & Poor's said it raised its corporate credit rating on Hawaiian Holdings Inc., the parent company of Hawaiian Airlines Inc., to B+ from B.

The outlook is stable.

The agency also raised its issue-level rating on Hawaiian Airlines Inc.'s 2013-1 class B pass-through trust certificates by one notch to BB, in conjunction with the upgrade of Hawaiian Holdings.

At the same time, S&P affirmed its issue-level rating on Hawaiian Airlines' 2013-1 class A pass-through trust certificates because it believes that their collateral protection has deteriorated, offsetting the effect of the upgrade of Hawaiian Holdings.

"Our upgrade of Hawaiian Holdings Inc. reflects the company's improved operating performance, which has strengthened its credit measures," S&P credit analyst Betsy Snyder said in a news release.

As of March 31, Hawaiian's trailing-12-months funds from operations-to-debt ratio was 24% and its debt-to-EBITDA metric was 3.3 times. The agency expects the company to maintain its stronger operating performance going forward, due in large part to its lower fuel expense, which should improve its credit metrics in 2015 before they moderate slightly in 2016.

Based on these trends, S&P now assesses Hawaiian's financial risk profile as "aggressive" (compared with "highly leveraged" previously) under the criteria.

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