S&P ups Hawaiian Holdings, debt

S&P said it raised its corporate credit rating on Hawaiian Holdings Inc., the parent company of Hawaiian Airlines Inc., to BB- from B+.

The outlook is stable.

At the same time, the agency raised its issue-level rating on Hawaiian Airlines' 2013-1 class A pass-through trust certificates to A- (sf) from BBB+ (sf) and its issue-level rating on the class B pass-through trust certificates to BB+ (sf) from BB (sf).

"Our upgrade of Hawaiian Holdings Inc. reflects the company's improved operating performance and debt reduction, which have substantially improved its credit measures over the past year," S&P credit analyst Tatiana Kleiman said in a news release.

As of March 31, Hawaiian's trailing-12-month funds from operations (FFO)-to-debt ratio climbed to 37.9% and its debt-to-EBITDA metric dropped to 2.2 times from 24.1% and 3.3 times, respectively, as of the same time last year. Similar to its North American airline peers, the company's 2015 performance has been positively affected by declining operating costs related to the low fuel price environment.

S&P expects the company to maintain its stronger operating performance over the next year, supported by modestly higher pricing, increases in ancillary revenue, lower fuel expenses and ongoing cost-control efforts.

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