What happened

After the closing bell Tuesday, Hawaiian Holdings (HA -0.31%) -- parent company of Hawaiian Airlines -- reported second-quarter results that basically met expectations. However, uncertainty remains about when flights on some of the airline's key international routes will be fully restored. Investors reacted to the report by heading for the exits, sending Hawaiian shares down by as much as 11.3% Wednesday morning. As of 12:40 p.m. ET, shares were still off by 6.6%.

So what

Airline investors have faced a difficult few years due to the pandemic, and Hawaiian has had to navigate through more turbulence than most of its peers. The industry's recovery has been primarily fueled by domestic traffic as restrictions continued to limit more lucrative international travel.

That creates some unique issues for Hawaiian. Airline competitors that reduced the number of flights they were sending to Europe and Asia have redirected some of those planes to trans-Pacific flights to the islands, creating a difficult competitive environment. Hawaiian has historically compensated for the issues created by domestic competition by leaning heavily on its own flights to Asia, but with restrictions in place, it doesn't have that option.

All things considered, Hawaiian's second quarter wasn't as bad as it could have been. The airline lost $0.90 per share on revenue of  $617.46 million. The analysts' consensus estimates had been for an $0.89 per share loss on revenue of $669.87 million. As with other airlines, Hawaiian's demand and pricing are strong, but those factors are being partially offset by higher fuel costs.

During the second quarter, Hawaiian operated at 87% of its Q2 2019 capacity. Focusing in, North American capacity was 115% compared to the same three months of 2019, prior to the pandemic, while its neighbor island service operated at 80% of 2019 capacity and international at 31%.

"Strong demand in our domestic markets has been joined by an encouraging recovery from our international gateways in the second quarter," CEO Peter Ingram said in the press release. "As we move into the summer travel peak, every indication suggests a continuation of these positive trends."

Now what

The good news is that international routes are slowly being brought back online. In April, Hawaiian announced plans to restart service to New Zealand and increase its flight frequencies to Seoul, South Korea. And on Aug. 1, Hawaiian will resume limited flights on its all-important Honolulu-to-Tokyo route. The company also hopes to turn a profit on an adjusted basis in the third quarter.

The question remains how quickly will Japanese service ramp up, and what demand trends will look like with so much of the world fighting inflation and looking to avoid recessions.

Hawaiian is well-positioned to weather this uncertainty, with $1.8 billion in liquidity on its balance sheet. The issue isn't whether Hawaiian can survive but how long until it will thrive. Investors on Wednesday appeared unwilling to sit on the tarmac waiting for that recovery.