Since the beginning of last year, a growing number of U.S. airlines have taken advantage of their rising profitability to begin returning cash to long-suffering shareholders. Just a couple of years ago, Southwest Airlines was one of the few airlines with an active dividend or buyback program. By contrast, five of the top six U.S. airlines are currently paying dividends and/or buying back stock.

Leisure airline Hawaiian Holdings (NASDAQ:HA) hasn't participated in the capital-return craze thus far. In the past five years, Hawaiian Airlines has invested in significant growth while implementing a capital-intensive refleeting project. However, within a few months, it should be ready to join its peers in returning cash to its shareholders.

Profit taking off
The most important factor that will enable Hawaiian Holdings to start returning cash to shareholders is its robust profit growth. Hawaiian Airlines has generated strong mid-single-digit unit revenue growth this year, thanks to capacity cutbacks on a few routes, strong travel demand in the U.S., and rapid growth in non-ticket revenue.

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Hawaiian Airlines has been rapidly growing earnings recently.

As a result, analysts on average expect the company to post adjusted EPS of $1.58 this year, up from just $0.88 in 2013. For 2015, analysts are projecting that EPS will rise again to $1.95.

That projection may be conservative if fuel prices remain anywhere near today's level. Based on the recent jet-fuel forward price curve, Hawaiian Airlines will pay just $2.30-$2.40 per gallon for jet fuel in 2015, down more than 20% from 2014. That would represent over $100 million of cost savings year over year -- most or all of which should drop to the bottom line.

Capex scaling back
A second key factor is lower capital commitments. At the company's annual Investor Day this past week, Hawaiian Airlines executives noted that capital expenditures will be much lower in the next few years than the $450 million-$500 million level of the past two years. While the carrier added 10 wide-body aircraft to its fleet in the past two years, it is scheduled to add just three in 2015 and none in 2016.

Between Hawaiian Airlines' higher earnings and its moderating capex budget, the company should produce plenty of free cash flow in the next two years and beyond. That's cash that could potentially be distributed to shareholders through dividends or buybacks.

Balance sheet targets coming into focus
At the Investor Day this week, Hawaiian Airlines CFO Scott Topping laid out some balance sheet targets that the company aims to meet going forward. (Presumably, Hawaiian will only return cash to shareholders if it can meet these targets.)

First, the company wants to maintain liquidity at 23%-25% of trailing revenue. Second, it wants to reduce adjusted debt to less than 4 times EBITDAR (earnings before interest, taxes, depreciation, amortization, and rent).

Both objectives are well within reach. In fact, Hawaiian Airlines closed on a $175 million credit line last month, which pushed it past its liquidity target. As for the debt target, the company prepaid some debt in October, which brought its adjusted debt-to-EBITDAR ratio down from 4.5 to 4.2.

Furthermore, the company is on pace for a significant jump in pre-tax earnings next year. It also expects depreciation and rent expense to rise. The resulting increase in EBITDAR should allow Hawaiian Airlines to easily meet its debt-to-EBITDAR target next year, even if it doesn't pay down any debt at all.

Time to join the cash-return club
Hawaiian Airlines already has some excess cash and it is on pace to produce strong free cash flow going forward. Additionally, the company is poised to hit its adjusted debt-to-EBITDAR target shortly.

Thus, barring any unexpected bumps in the road, Hawaiian Airlines should be ready to return cash to shareholders next year. The company should produce quite a bit of free cash flow in the next few years relative to its market cap, allowing it to initiate a meaningful dividend and/or buyback program while still improving its balance sheet. This would be a big win for investors.

Adam Levine-Weinberg owns shares of Hawaiian Holdings. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.