Hawaiian Air exec:
We didn’t react fast enough
Chairman John Adams calls the
By Russ Lynch
carrier's losses a 'splash of water in our face'
Star-BulletinHawaiian Airlines Inc. didn't act decisively when tourism turned down last summer and jet fuel prices soared, according to the airline's board chairman, John W. Adams. "Our company didn't react adequately enough or quickly enough," Adams told shareholders yesterday at the airline's annual meeting in the Royal Hawaiian Hotel.
But he said Hawaiian has been moving quickly since, and is now working on changes that will set the company on the right path for the future.
"I think this splash of water in our face, this dash of realism, was what we needed," he said.
Hawaiian earlier this month reported a first-quarter loss of $2.4 million, after a 1996 fourth-quarter loss of $3.9 million. In the first quarter of this year alone, Hawaiian's fuel costs rose 20 percent and the airline says it has been hurt by soft tourist arrivals.
Adams, who became chairman after he led a group of investors that pumped capital into the airline in January 1996, recalled his "fairly optimistic" comments to stockholders a year ago and said there was reason for optimism at that time.
Tourism was robust. The company had been successfully reorganized under the leadership of then-president Bruce R. Nobles. Employees had shown a willingness to forgo pay increases.
"The rose started to wilt in the summer," he said. Adams said there is a sense of urgency in actions now being taken.
An important step has been establishing a management-employee task force to redirect and stimulate the company, he said.
Adams praised Nobles for his work in restructuring the company.
He said steps that have been taken to put the airline on track include code-sharing agreements on the mainland which give Hawaiian access to other markets than its West Coast gateways and a code-sharing deal with Northwest Airlines in which Hawaiian provides interisland service for Northwest passengers.
Hawaiian is also negotiating with two major airlines toward establishing marketing agreements, Adams said.
Paul J. Casey, the former Hawaii Visitors & Convention Bureau president and longtime airline executive who became president and chief executive officer of Hawaiian six weeks ago after Nobles left, said he is solidly committed to the "re-engineering" process at the company.
Casey also praised code-sharing agreements, in which a passenger booked on one airline is ticketed all the way to the destination as that airline's customer but may fly on one or more other airlines in other locations on the way.
"These are ways you can avoid the capital cost of flying yourself," Casey said. Hawaiian gets the sharing airlines' customers into its services instead of those of competitors, he said.
Casey said Asia is very important to Hawaiian's future and within a few weeks the airline will have developed a strategy for marketing in Asia, which holds the key to future tourism growth.
Nobles, who has moved to the mainland but was present at the meeting as a shareholder, said he is doing some consulting work and weighing some job offers but has been busy moving and hasn't made a decision on his future.
He said he will likely take on another turnaround task like the one he accepted when he joined Hawaiian in mid-1993 and it is likely to be in transportation but not necessarily an airline.
