STAR-BULLETIN / 2001 Hawaiian Airlines yesterday said it is creating a holding company and moving its incorporation from the isles to Delaware. The company's headquarters and offices will remain here, but the airline can take advantage of Delaware business laws.

Hawaiian changes
corporate structure

The airline creates a holding
company and moves incorporation
from isles to Delaware

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By Russ Lynch
rlynch@starbulletin.com

Hawaiian Airlines Inc. plans to change itself into a holding company and to shift its incorporation from Hawaii to Delaware.

A holding-company structure is generally used to make acquisitions and spread into operations aside from a company's core operations, but Hawaiian said it is merely positioning itself for the future.

Stockholders will be asked at their annual meeting June 14 to vote to form a new company called Hawaiian Holdings Inc. Shareholders of Hawaiian Airlines will become shareholders of Hawaiian Airlines, swapping their old shares for an equal number of shares in the new company.

Its ticker symbol on the American Stock Exchange will remain HA.

"The holding-company structure will provide us with strategic and operational flexibility that is not currently available to us," said John W. Adams, board chairman.

As for reincorporating in Delaware, Adams said that state "is widely known for the predictability and flexibility of its corporate law."

Keoni Wagner, a company spokesman, said there are no plans to do anything differently and the object is to structure the company, which is in a growth mode, for the future.

The company's headquarters will remain in Honolulu. It will still be subject to Hawaii taxes.

But it is joining a number of prominent Hawaii-connected companies incorporated in Delaware.

They include Bank of Hawaii Corp. (until last week, Pacific Century Financial Corp.) and ML Macadamia Orchards.

Publicly traded Hawaii companies that have not merged with others and are still incorporated in Hawaii include Alexander & Baldwin Inc., Hawaiian Electric Industries, CB Bancshares, CPB Inc. and Maui Land & Pineapple.

Among the advantages that businesses see in a Delaware incorporation is that it has a Court of Chancery specifically to handle business matters. The court has a long case history of business litigation that allows problems to be quickly resolved.

Incorporating there will help Hawaiian to "realize the potential benefits that the holding company structure has to offer," Adams said.