What happened

All airline stocks took it on the chin in March, as the COVID-19 pandemic brought travel to a halt and upended the industry's best laid plans. Hawaiian Holdings (NASDAQ:HA) was hit especially hard, with shares losing 50% in March, according to data provided by S&P Global Market Intelligence.

So what

Airlines have been among the hardest hit sectors during the pandemic, with planes flying empty as an increasing number of states and countries advised sheltering in place to try to contain the spread of the virus. Even when the pandemic is eventually contained, the industry might find it difficult to regain altitude, as it seems increasingly likely the U.S. economy is headed into a recession.

Hawaiian has been hit particularly hard because of its unique route network. On March 23, the company said it would suspend most of its North American and international routes due to a state quarantine, operating only a small number of inter-island connecting flights and single flights from Honolulu to Los Angeles and American Samoa to give the state some connectivity.

A Hawaiian A330 flies over DiamondHead.

Image source: Hawaiian Airlines.

The suspension sapped a significant portion of Hawaiian's revenue generating potential, but the airline was likely not generating a lot of revenue flying its schedule. Hawaiian said at the time it had been flying with its planes about half full, with service to Japan flying with planes only 20% full.

The U.S. government came through with $50 billion to support the industry late in the month, but much of that is going to be aimed at supporting the largest carriers. And whatever added liquidity Hawaiian receives in assistance might not be enough if vacation travelers do not quickly return to the islands after the pandemic is over.

Now what

Hawaiian is a well-run company, but it is the sort of niche operator that tends to be under pressure during even a garden-variety recession. Its route network, heavy with long, transpacific flights, is high cost, and Hawaii is a tough vacation sell for many tourists during a recession.

If Hawaiian can navigate through this patch, there could be some upside to a downturn. The airline was under pressure last year due to an onslaught of new competition to the islands. It's possible some of that competition will not return at previous levels due to a slowdown, giving Hawaiian more pricing power and wiggle room.

But for now, there is more unknown about Hawaiian Airlines' future than there is known. Investors tend to hate that sort of uncertainty, and in March ran for the exits as a result.