What happened

Shares of Hawaiian Holdings (NASDAQ:HA) fell as much as 10% on Thursday morning following the company's second-quarter earnings release. The entire airline industry is hurting due to the COVID-19 pandemic, but Hawaiian's niche network is leaving it particularly vulnerable during the crisis.

So what

After markets closed Wednesday, Hawaiian reported a second-quarter loss of $3.81 per share, below the $3.48 per share consensus. Revenue from the quarter came in at $60 million, down 91.6% year over year but in line with consensus.

A Hawaiian Airlines plane flies over Diamond Head.

Image source: Hawaiian Holdings.

Investors came into earnings season bracing for the worst. Airlines have seen travel demand plummet due to the pandemic, and with the state of Hawaii enforcing a 14-day self-quarantine on passengers flying in, Hawaiian Airlines' business was going to be hit hard.

Hawaiian has operated an extremely limited schedule since spring. The airline has also instituted a hiring freeze and taken other actions to cut costs and preserve liquidity.

As of June 30, the airline had $761 million in cash and equivalents on its books and has reduced its cash burn to about $3 million per day.

Now what

Given all of the uncertainty, Hawaiian is not providing guidance for the third quarter or full year 2020. But it is pretty clear there will be no quick rebound. The company expects its capacity to be down 86% in July compared to a year prior and down 85% in August.

Hawaiian is a well-run airline with a healthy amount of cash and few near-term debt obligations that would wipe out that cash. It should be able to survive the pandemic crisis. But until COVID-19 is in the past and tourism is heating up again, it is going to be tough for Hawaiian to gain altitude.